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Celanese Corporation Reports First Quarter Earnings

Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported first quarter 2024 U.S. GAAP diluted earnings per share of $1.10 and adjusted earnings per share of $2.08. The Company generated net sales of $2.6 billion in the quarter, an increase of 2 percent from the prior quarter, reflecting a sequential increase in volume of 2 percent and neutral pricing. Celanese continued to execute against controllable actions in a demand environment that is stabilizing but has not yet returned to normalized levels. As a result, the Company largely offset the sequential impacts of first quarter seasonality as well as significantly higher expenses associated with the completion of planned turnarounds. Celanese reported first quarter operating profit of $210 million, adjusted EBIT of $407 million, and operating EBITDA of $583 million at margins of 8, 16, and 22 percent, respectively.

The difference between U.S. GAAP diluted earnings per share and adjusted earnings per share in the first quarter was primarily due to Certain Items totaling $97 million.1

"Our first quarter results demonstrate our ability to execute in a commercial environment that has stabilized but still shows limited signs of meaningful recovery," said Lori Ryerkerk, chair and chief executive officer. "We saw the realization of financial benefits from actions that were completed last year, particularly within the former M&M portfolio, and we continue to put in place further initiatives to enhance the earnings power of Celanese. I thank our teams for their dedication in executing our plan, allowing us to exceed our previous earnings expectations for the quarter."

_____________________________ 

1 Mainly driven by shutdown-related costs and M&A-related costs

First Quarter 2024 Financial Highlights:

 

Three Months Ended

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

 

(unaudited)

 

(In $ millions, except per share data)

Net Sales

 

 

 

 

 

Engineered Materials

 

1,378

 

 

 

1,406

 

 

 

1,630

 

Acetyl Chain

 

1,261

 

 

 

1,181

 

 

 

1,250

 

Intersegment Eliminations

 

(28

)

 

 

(18

)

 

 

(27

)

Total

 

2,611

 

 

 

2,569

 

 

 

2,853

 

 

 

 

 

 

 

Operating Profit (Loss)

 

 

 

 

 

Engineered Materials

 

89

 

 

 

122

 

 

 

112

 

Acetyl Chain

 

254

 

 

 

264

 

 

 

278

 

Other Activities

 

(133

)

 

 

(127

)

 

 

(139

)

Total

 

210

 

 

 

259

 

 

 

251

 

 

 

 

 

 

 

Net Earnings (Loss)

 

124

 

 

 

701

 

 

 

93

 

 

 

 

 

 

 

Adjusted EBIT(1)

 

 

 

 

 

Engineered Materials

 

201

 

 

 

199

 

 

 

215

 

Acetyl Chain

 

296

 

 

 

300

 

 

 

316

 

Other Activities

 

(90

)

 

 

(65

)

 

 

(107

)

Total

 

407

 

 

 

434

 

 

 

424

 

 

 

 

 

 

 

Equity Earnings and Dividend Income, Other Income (Expense)

 

 

 

 

 

Engineered Materials

 

50

 

 

 

45

 

 

 

10

 

Acetyl Chain

 

36

 

 

 

33

 

 

 

34

 

 

 

 

 

 

 

Operating EBITDA(1)

 

583

 

 

 

608

 

 

 

596

 

Diluted EPS - continuing operations

$

1.10

 

 

$

6.43

 

 

$

0.86

 

Diluted EPS - total

$

1.10

 

 

$

6.37

 

 

$

0.83

 

Adjusted EPS(1)

$

2.08

 

 

$

2.24

 

 

$

2.01

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

(151

)

 

 

(168

)

 

 

(178

)

Net cash provided by (used in) financing activities

 

(259

)

 

 

(240

)

 

 

(69

)

Net cash provided by (used in) operating activities

 

101

 

 

 

830

 

 

 

(96

)

Free cash flow(1)

 

(40

)

 

 

702

 

 

 

(261

)

____________________________

(1)  

See "Non-US GAAP Financial Measures" below.

Recent Highlights:

  • Completed the successful startup of a new 1.3 million ton Clear Lake acetic acid expansion unit.
  • Completed actions to enhance the flexibility of the Acetyl Chain by building out downstream capabilities, including:
    • The successful startup of a new vinyl acetate ethylene (VAE) unit in Nanjing that increases VAE capacity by 70 kt to address growing regional demand in Asia.
    • The completion of global, low-capital debottlenecking projects for downstream redispersible polymer powders (RDP) to improve the flexibility in the Acetyl Chain and further address growing demand.
  • Announced the planned closure of all operations in Mechelen, Belgium, a specialty compounding facility that was acquired as part of the M&M acquisition. This action is consistent with the Company's strategy to exit high cost facilities while driving productivity in lower cost facilities.
  • Elected Kim K.W. Rucker as the new lead independent director. Ms. Rucker, former Executive Vice President, General Counsel and Corporate Secretary for Andeavor (formerly Tesoro Corp.) and experienced corporate director, has been a member of the Celanese Board of Directors since 2018.

First Quarter Business Segment Overview

Acetyl Chain

The Acetyl Chain delivered first quarter net sales of $1.3 billion, a 7 percent increase from the prior quarter. Volume increased by 5 percent sequentially due to a modest increase in Asia demand and seasonal recovery in the Americas and Europe. First quarter pricing across the Acetyl Chain increased by 1 percent sequentially. In response to challenging commercial dynamics with acetic acid in China, the business exercised its unique optionality within its integrated value chain to capture margin through downstream derivatives such as emulsions and RDP. The Acetyl Chain delivered first quarter operating profit of $254 million, adjusted EBIT of $296 million, and operating EBITDA of $353 million at margins of 20, 23, and 28 percent, respectively. The business completed a planned seven week methanol turnaround on time and under budget. Additionally, the new acetic acid production unit at Clear Lake supported the business to drive incremental earnings across its network and partially offset the sequential increase in methanol turnaround expenses. The Acetyl Chain continued to take steps to support its foundational earnings by increasing downstream optionality through the successful addition of capacity in VAE and RDP.

Engineered Materials

Engineered Materials reported first quarter net sales of $1.4 billion, representing a sequential decrease of 2 percent. Net sales reflected a sequential volume decrease of 1 percent and a sequential pricing decrease of 1 percent. Volume was similar to the previous quarter with slight improvements in both automotive and distribution volumes partially offset by seasonal declines in medical implants. Engineered Materials delivered first quarter operating profit of $89 million, adjusted EBIT of $201 million, and operating EBITDA of $303 million, at margins of 6, 15, and 22 percent, respectively. The sequential earnings performance was mainly driven by realization of lower raw material costs flowing through inventory as well as sales mix improvements. Both dynamics were especially prominent in the nylon business, which delivered a $26 million sequential increase in gross profit contribution and the highest quarterly contribution from the former M&M product portfolio since the completion of the acquisition. Engineered Materials implemented further value enhancing initiatives to continue driving margin expansion. Among these were the closure of nylon 66 polymerization in Uentrop, Germany, the integration of the former M&M business onto the upgraded SAP S/4HANA ERP system, and the announcement of plans to cease all operations at the specialty compounding site in Mechelen, Belgium which was acquired as part of the M&M acquisition.

Cash Flow and Tax

Celanese reported first quarter operating cash flow of $101 million and free cash flow of $(40) million, representing increases of $197 million and $221 million, respectively, when compared to the same period of last year. First quarter results included a sequential increase in working capital from typical seasonality, net cash interest expense of $204 million due to timing of coupon payments, and cash capital expenditures of $137 million driven by project completion timing. Celanese returned $77 million in cash to shareholders via dividends in the quarter.

The effective U.S. GAAP income tax rate was 21 percent for the first quarter compared to 21 percent for the same quarter in 2023. The U.S. GAAP effective rate for the current year was unfavorably impacted by the tax effect of debt restructuring transactions, and the U.S. GAAP rate for the prior period was unfavorably impacted by increases in valuation allowances on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period that did not re-occur in the current period. The effective tax rate for adjusted earnings was 9 percent based on expected jurisdictional earnings mix for the full year and consideration of other non-recurring U.S. GAAP items.

Outlook

"Given the current demand environment and muted seasonal commercial lift, our focus will remain on what we can control to sustainably lift the earnings of Celanese," said Lori Ryerkerk. "Along with further improvement in the profitability of our acquired product portfolio, we expect benefits from our Clear Lake expansion, Uentrop closure, and SAP S/4HANA ERP integration to contribute in the second quarter and accelerate across the year. Because of these foundational value creation initiatives, I am confident we will deliver a ramp in earnings performance in the second quarter and into the second half of the year."

Based on the timing of major value creation projects and reflective of the current commercial environment, the Company anticipates second quarter adjusted earnings per share of $2.60 to $3.00, inclusive of approximately $0.30 per share of M&M transaction amortization.

Reconciliations of forecasted non-GAAP measures such as adjusted earnings per share, adjusted EBIT or free cash flow to the equivalent U.S. GAAP measures (diluted earnings per share, net earnings (loss) attributable to Celanese Corporation and net cash provided by (used in) operations, respectively), are not available without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, and other items is not practical. For more information, see "Non-GAAP Financial Measures" below.

The Company's prepared remarks related to the first quarter will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library on May 8, 2024. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our investor relations website under Financial Information/Non-GAAP Financial Measures. See also "Non-GAAP Financial Measures" below.

Celanese Corporation is a global leader in chemistry, producing specialty material solutions used across most major industries and consumer applications. Our businesses use our chemistry, technology and commercial expertise to create value for our customers, employees and shareholders. We support sustainability by responsibly managing the materials we create and growing our portfolio of sustainable products to meet customer and societal demand. We strive to make a positive impact in our communities and to foster inclusivity across our teams. Celanese Corporation is a Fortune 500 company that employs approximately 12,400 employees worldwide with 2023 net sales of $10.9 billion.

Forward-Looking Statements

This release may contain "forward-looking statements," which include information concerning the Company's plans, objectives, goals, strategies, future revenues, cash flow, financial performance, synergies, capital expenditures, financing needs and other information that is not historical information. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of product and industry business cycles, particularly in the automotive, electrical, textiles, electronics and construction industries; volatility or changes in the price and availability of raw materials and energy, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources; the ability to pass increases in raw material prices, logistics costs and other costs on to customers or otherwise improve margins through price increases; the possibility that we will not be able to timely or effectively continue to integrate the Mobility & Materials business (the "M&M Business") we acquired from DuPont de Nemours, Inc. (the "M&M Acquisition") in order to realize the anticipated benefits of the M&M Acquisition, including synergies and growth opportunities, whether as a result of difficulties arising from the operation of the M&M Business or other unanticipated delays, costs, inefficiencies or liabilities; increased commercial, legal or regulatory complexity of entering into, or expanding our exposure to, certain end markets and geographies; risks in the global economy and equity and credit markets and their potential impact on our ability to pay down debt in the future and/or refinance at suitable rates, in a timely manner, or at all; risks and costs associated with increased leverage from the M&M Acquisition, including increased interest expense and potential reduction of business and strategic flexibility; the ability to maintain plant utilization rates and to implement planned capacity additions, expansions and maintenance; the ability to reduce or maintain current levels of production costs and to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; the ability to identify desirable potential acquisition or divestiture opportunities and to complete such transactions, including obtaining regulatory approvals, consistent with the Company's strategy; market acceptance of our products and technology; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, transportation, logistics or supply chain disruptions, cybersecurity incidents, terrorism or political unrest, public health crises (including, but not limited to, the COVID-19 pandemic), or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the direct or indirect consequences of acts of war or conflict (such as the Russia-Ukraine conflict or the Israel-Hamas conflict) or terrorist incidents or as a result of weather, natural disasters, or other crises; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in applicable tariffs, duties and trade agreements, tax rates or legislation throughout the world including, but not limited to, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in the United States and other jurisdictions; changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property; potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change or other sustainability matters; potential liability resulting from pending or future claims or litigation, including investigations or enforcement actions, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; tax rates and changes thereto; and various other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Non-GAAP Financial Measures

Presentation

This document presents the Company's two business segments, Engineered Materials and the Acetyl Chain.

Use of Non-US GAAP Financial Information

This release uses the following Non-US GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, adjusted earnings per share and free cash flow. These measures are not recognized in accordance with US GAAP and should not be viewed as an alternative to US GAAP measures of performance or liquidity. The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin is operating margin; for operating EBITDA margin is operating margin; for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; and for free cash flow is net cash provided by (used in) operations.

Definitions of Non-US GAAP Financial Measures

  • Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 of our Non-US GAAP Financial Measures and Supplemental Information document). We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales.
  • Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. Operating EBITDA margin is defined by the Company as operating EBITDA divided by net sales.
  • Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.



    Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
  • Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for contributions from or distributions to our noncontrolling interest joint ventures. We do not provide reconciliations for free cash flow on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of items such as working capital changes, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

Reconciliation of Non-US GAAP Financial Measures

Reconciliations of the Non-US GAAP financial measures used in this press release to the comparable US GAAP financial measure, together with information about the purposes and uses of Non-US GAAP financial measures, are included in our Non-US GAAP Financial Measures and Supplemental Information document filed as an exhibit to our Current Report on Form 8-K filed with the SEC on or about May 8, 2024 and also available on our website at investors.celanese.com under Financial Information/Financial Document Library.

Results Unaudited

The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

Supplemental Information

Additional information about our prior period performance is included in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial Measures and Supplemental Information document.

Consolidated Statements of Operations - Unaudited

 

Three Months Ended

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

 

(In $ millions, except share and per share data)

Net sales

2,611

 

 

2,569

 

 

2,853

 

Cost of sales

(2,057

)

 

(1,956

)

 

(2,222

)

Gross profit

554

 

 

613

 

 

631

 

Selling, general and administrative expenses

(265

)

 

(272

)

 

(285

)

Amortization of intangible assets

(41

)

 

(40

)

 

(41

)

Research and development expenses

(34

)

 

(32

)

 

(42

)

Other (charges) gains, net

(14

)

 

(18

)

 

(23

)

Foreign exchange gain (loss), net

11

 

 

11

 

 

6

 

Gain (loss) on disposition of businesses and assets, net

(1

)

 

(3

)

 

5

 

Operating profit (loss)

210

 

 

259

 

 

251

 

Equity in net earnings (loss) of affiliates

55

 

 

52

 

 

15

 

Non-operating pension and other postretirement employee benefit (expense) income

2

 

 

(67

)

 

1

 

Interest expense

(169

)

 

(178

)

 

(182

)

Interest income

13

 

 

12

 

 

8

 

Dividend income - equity investments

34

 

 

31

 

 

34

 

Other income (expense), net

12

 

 

23

 

 

(6

)

Earnings (loss) from continuing operations before tax

157

 

 

132

 

 

121

 

Income tax (provision) benefit

(33

)

 

575

 

 

(25

)

Earnings (loss) from continuing operations

124

 

 

707

 

 

96

 

Earnings (loss) from operation of discontinued operations

 

 

(8

)

 

(3

)

Income tax (provision) benefit from discontinued operations

 

 

2

 

 

 

Earnings (loss) from discontinued operations

 

 

(6

)

 

(3

)

Net earnings (loss)

124

 

 

701

 

 

93

 

Net (earnings) loss attributable to noncontrolling interests

(3

)

 

(3

)

 

(2

)

Net earnings (loss) attributable to Celanese Corporation

121

 

 

698

 

 

91

 

Amounts attributable to Celanese Corporation

 

 

 

 

 

Earnings (loss) from continuing operations

121

 

 

704

 

 

94

 

Earnings (loss) from discontinued operations

 

 

(6

)

 

(3

)

Net earnings (loss)

121

 

 

698

 

 

91

 

Earnings (loss) per common share - basic

 

 

 

 

 

Continuing operations

1.11

 

 

6.46

 

 

0.87

 

Discontinued operations

 

 

(0.05

)

 

(0.03

)

Net earnings (loss) - basic

1.11

 

 

6.41

 

 

0.84

 

Earnings (loss) per common share - diluted

 

 

 

 

 

Continuing operations

1.10

 

 

6.43

 

 

0.86

 

Discontinued operations

 

 

(0.06

)

 

(0.03

)

Net earnings (loss) - diluted

1.10

 

 

6.37

 

 

0.83

 

Weighted average shares (in millions)

 

 

 

 

 

Basic

109.1

 

 

109.0

 

 

108.6

 

Diluted

109.5

 

 

109.5

 

 

109.2

 

Consolidated Balance Sheets - Unaudited

 

As of

March 31,

2024

 

As of

December 31,

2023

 

 

(In $ millions)

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

1,483

 

 

1,805

 

Trade receivables - third party and affiliates, net

1,289

 

 

1,243

 

Non-trade receivables, net

536

 

 

541

 

Inventories

2,354

 

 

2,357

 

Other assets

283

 

 

272

 

Total current assets

5,945

 

 

6,218

 

Investments in affiliates

1,238

 

 

1,220

 

Property, plant and equipment, net

5,471

 

 

5,584

 

Operating lease right-of-use assets

396

 

 

422

 

Deferred income taxes

1,618

 

 

1,677

 

Other assets

537

 

 

524

 

Goodwill

6,926

 

 

6,977

 

Intangible assets, net

3,902

 

 

3,975

 

Total assets

26,033

 

 

26,597

 

LIABILITIES AND EQUITY

 

 

 

Current Liabilities

 

 

 

Short-term borrowings and current installments of long-term debt - third party and affiliates

2,439

 

 

1,383

 

Trade payables - third party and affiliates

1,447

 

 

1,510

 

Other liabilities

1,011

 

 

1,154

 

Income taxes payable

28

 

 

25

 

Total current liabilities

4,925

 

 

4,072

 

Long-term debt, net of unamortized deferred financing costs

11,018

 

 

12,301

 

Deferred income taxes

1,016

 

 

999

 

Uncertain tax positions

298

 

 

300

 

Benefit obligations

444

 

 

457

 

Operating lease liabilities

296

 

 

325

 

Other liabilities

505

 

 

591

 

Commitments and Contingencies

 

 

 

Shareholders' Equity

 

 

 

Treasury stock, at cost

(5,488

)

 

(5,488

)

Additional paid-in capital

383

 

 

394

 

Retained earnings

12,973

 

 

12,929

 

Accumulated other comprehensive income (loss), net

(797

)

 

(744

)

Total Celanese Corporation shareholders' equity

7,071

 

 

7,091

 

Noncontrolling interests

460

 

 

461

 

Total equity

7,531

 

 

7,552

 

Total liabilities and equity

26,033

 

 

26,597

 

 

Non-US GAAP Financial Measures and Supplemental Information

May 8, 2024

In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.

Purpose

The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.

Presentation

This document presents the Company's two business segments, Engineered Materials and the Acetyl Chain.

Use of Non-US GAAP Financial Measures

From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.

Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Financial Information/Financial Document Library page of our website, investors.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.

Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Financial Information/Financial Document Library page of our website, investors.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.

Specific Measures Used

This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation shareholders' equity.

Definitions

  • Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8). We believe that adjusted EBIT provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of unusual, non-operational or restructuring-related activities that affect comparability. Our management recognizes that adjusted EBIT has inherent limitations because of the excluded items. Adjusted EBIT is one of the measures management uses for planning and budgeting, monitoring and evaluating financial and operating results and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. Adjusted EBIT margin has the same uses and limitations as Adjusted EBIT.
  • Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. We believe that Operating EBITDA provides transparent and useful information to investors, analysts and other parties in evaluating our operating performance relative to our peer companies. Operating EBITDA margin is defined by the Company as Operating EBITDA divided by net sales. Operating EBITDA margin has the same uses and limitations as Operating EBITDA.
  • Operating profit (loss) attributable to Celanese Corporation is defined by the Company as operating profit (loss), less earnings (loss) attributable to noncontrolling interests ("NCI"). We believe that operating profit (loss) attributable to Celanese Corporation provides transparent and useful information to management, investors, analysts and other parties in evaluating our core operational performance. Operating margin attributable to Celanese Corporation is defined by the Company as operating profit (loss) attributable to Celanese Corporation divided by net sales. Operating margin attributable to Celanese Corporation has the same uses and limitations as Operating profit (loss) attributable to Celanese Corporation.
  • Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We believe that adjusted earnings per share provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of the above stated items that affect comparability and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.

  • Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for contributions from or distributions to our NCI joint ventures. We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations. Free cash flow is not a measure of cash available for discretionary expenditures since the Company has certain debt service and finance lease payments that are not deducted from that measure. We do not provide reconciliations for free cash flow on a forward-looking basis when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of items such as working capital changes, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
  • Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.
  • Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation shareholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our shareholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns.

Supplemental Information

Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:

  • Net sales for each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for each of our business segments.
  • Cash dividends received from our equity investments.
  • For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside shareholders' interests are shown as NCI. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.

Results Unaudited

The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

 

Table 1

Celanese Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions)

Net earnings (loss) attributable to Celanese Corporation

121

 

 

1,960

 

 

698

 

 

951

 

 

220

 

 

91

 

(Earnings) loss from discontinued operations

 

 

9

 

 

6

 

 

1

 

 

(1

)

 

3

 

Interest income

(13

)

 

(39

)

 

(12

)

 

(12

)

 

(7

)

 

(8

)

Interest expense

169

 

 

720

 

 

178

 

 

178

 

 

182

 

 

182

 

Refinancing expense

 

 

7

 

 

 

 

7

 

 

 

 

 

Income tax provision (benefit)

33

 

 

(790

)

 

(575

)

 

(236

)

 

(4

)

 

25

 

Certain Items attributable to Celanese Corporation (Table 8)

97

 

 

(114

)

 

139

 

 

(438

)

 

54

 

 

131

 

Adjusted EBIT

407

 

 

1,753

 

 

434

 

 

451

 

 

444

 

 

424

 

Depreciation and amortization expense(1)

176

 

 

691

 

 

174

 

 

173

 

 

172

 

 

172

 

Operating EBITDA

583

 

 

2,444

 

 

608

 

 

624

 

 

616

 

 

596

 

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions)

Engineered Materials

45

 

 

15

 

 

15

 

 

 

 

 

 

 

Acetyl Chain

 

 

 

 

 

 

 

 

 

 

 

Other Activities(2)

 

 

 

 

 

 

 

 

 

 

 

Accelerated depreciation and amortization expense

45

 

 

15

 

 

15

 

 

 

 

 

 

 

Depreciation and amortization expense(1)

176

 

 

691

 

 

174

 

 

173

 

 

172

 

 

172

 

Total depreciation and amortization expense

221

 

 

706

 

 

189

 

 

173

 

 

172

 

 

172

 

______________________________

(1)

Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.

 

(2)

Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 
Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited
 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions, except percentages)

Operating Profit (Loss) / Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

89

 

 

6.5

%

 

1,083

 

 

17.6

%

 

122

 

 

8.7

%

 

691

 

 

45.2

%

 

158

 

 

10.0

%

 

112

 

 

6.9

%

Acetyl Chain

254

 

 

20.1

%

 

1,109

 

 

22.7

%

 

264

 

 

22.4

%

 

272

 

 

22.3

%

 

295

 

 

23.9

%

 

278

 

 

22.2

%

Other Activities(1)

(133

)

 

 

 

(505

)

 

 

 

(127

)

 

 

 

(121

)

 

 

 

(118

)

 

 

 

(139

)

 

 

Total

210

 

 

8.0

%

 

1,687

 

 

15.4

%

 

259

 

 

10.1

%

 

842

 

 

30.9

%

 

335

 

 

12.0

%

 

251

 

 

8.8

%

Less: Net Earnings (Loss) Attributable to NCI for Engineered Materials

(1

)

 

 

 

(3

)

 

 

 

1

 

 

 

 

(2

)

 

 

 

(2

)

 

 

 

 

 

 

Less: Net Earnings (Loss) Attributable to NCI for Acetyl Chain

4

 

 

 

 

7

 

 

 

 

2

 

 

 

 

 

 

 

 

3

 

 

 

 

2

 

 

 

Operating Profit (Loss) Attributable to Celanese Corporation

207

 

 

7.9

%

 

1,683

 

 

15.4

%

 

256

 

 

10.0

%

 

844

 

 

31.0

%

 

334

 

 

11.9

%

 

249

 

 

8.7

%

Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

90

 

 

6.5

%

 

1,086

 

 

17.7

%

 

121

 

 

8.6

%

 

693

 

 

45.4

%

 

160

 

 

10.1

%

 

112

 

 

6.9

%

Acetyl Chain

250

 

 

19.8

%

 

1,102

 

 

22.6

%

 

262

 

 

22.2

%

 

272

 

 

22.3

%

 

292

 

 

23.7

%

 

276

 

 

22.1

%

Other Activities(1)

(133

)

 

 

 

(505

)

 

 

 

(127

)

 

 

 

(121

)

 

 

 

(118

)

 

 

 

(139

)

 

 

Total

207

 

 

7.9

%

 

1,683

 

 

15.4

%

 

256

 

 

10.0

%

 

844

 

 

31.0

%

 

334

 

 

11.9

%

 

249

 

 

8.7

%

Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

50

 

 

 

 

87

 

 

 

 

45

 

 

 

 

12

 

 

 

 

20

 

 

 

 

10

 

 

 

Acetyl Chain

36

 

 

 

 

132

 

 

 

 

33

 

 

 

 

33

 

 

 

 

32

 

 

 

 

34

 

 

 

Other Activities(1)

15

 

 

 

 

34

 

 

 

 

28

 

 

 

 

1

 

 

 

 

6

 

 

 

 

(1

)

 

 

Total

101

 

 

 

 

253

 

 

 

 

106

 

 

 

 

46

 

 

 

 

58

 

 

 

 

43

 

 

 

Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

 

 

 

 

(1

)

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acetyl Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Activities(1)

2

 

 

 

 

(68

)

 

 

 

(66

)

 

 

 

(1

)

 

 

 

(2

)

 

 

 

1

 

 

 

Total

2

 

 

 

 

(69

)

 

 

 

(67

)

 

 

 

(1

)

 

 

 

(2

)

 

 

 

1

 

 

 

Certain Items Attributable to Celanese Corporation (Table 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

61

 

 

 

 

(324

)

 

 

 

34

 

 

 

 

(476

)

 

 

 

25

 

 

 

 

93

 

 

 

Acetyl Chain

10

 

 

 

 

24

 

 

 

 

5

 

 

 

 

5

 

 

 

 

8

 

 

 

 

6

 

 

 

Other Activities(1)

26

 

 

 

 

186

 

 

 

 

100

 

 

 

 

33

 

 

 

 

21

 

 

 

 

32

 

 

 

Total

97

 

 

 

 

(114

)

 

 

 

139

 

 

 

 

(438

)

 

 

 

54

 

 

 

 

131

 

 

 

Adjusted EBIT / Adjusted EBIT Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

201

 

 

14.6

%

 

848

 

 

13.8

%

 

199

 

 

14.2

%

 

229

 

 

15.0

%

 

205

 

 

12.9

%

 

215

 

 

13.2

%

Acetyl Chain

296

 

 

23.5

%

 

1,258

 

 

25.8

%

 

300

 

 

25.4

%

 

310

 

 

25.4

%

 

332

 

 

26.9

%

 

316

 

 

25.3

%

Other Activities(1)

(90

)

 

 

 

(353

)

 

 

 

(65

)

 

 

 

(88

)

 

 

 

(93

)

 

 

 

(107

)

 

 

Total

407

 

 

15.6

%

 

1,753

 

 

16.0

%

 

434

 

 

16.9

%

 

451

 

 

16.6

%

 

444

 

 

15.9

%

 

424

 

 

14.9

%

 

___________________________

(1)

Other Activities includes corporate SG&A expenses, results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 
Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions, except percentages)

Depreciation and Amortization Expense(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

102

 

 

 

 

447

 

 

 

 

112

 

 

 

 

111

 

 

 

 

112

 

 

 

 

112

 

 

 

Acetyl Chain

57

 

 

 

 

217

 

 

 

 

54

 

 

 

 

55

 

 

 

 

54

 

 

 

 

54

 

 

 

Other Activities(2)

17

 

 

 

 

27

 

 

 

 

8

 

 

 

 

7

 

 

 

 

6

 

 

 

 

6

 

 

 

Total

176

 

 

 

 

691

 

 

 

 

174

 

 

 

 

173

 

 

 

 

172

 

 

 

 

172

 

 

 

Operating EBITDA / Operating EBITDA Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

303

 

 

22.0

%

 

1,295

 

 

21.1

%

 

311

 

 

22.1

%

 

340

 

 

22.3

%

 

317

 

 

20.0

%

 

327

 

 

20.1

%

Acetyl Chain

353

 

 

28.0

%

 

1,475

 

 

30.2

%

 

354

 

 

30.0

%

 

365

 

 

29.9

%

 

386

 

 

31.3

%

 

370

 

 

29.6

%

Other Activities(2)

(73

)

 

 

 

(326

)

 

 

 

(57

)

 

 

 

(81

)

 

 

 

(87

)

 

 

 

(101

)

 

 

Total

583

 

 

22.3

%

 

2,444

 

 

22.3

%

 

608

 

 

23.7

%

 

624

 

 

22.9

%

 

616

 

 

22.0

%

 

596

 

 

20.9

%

___________________________

(1)

Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.

(2)

Other Activities includes corporate SG&A expenses, results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

 

Table 3

Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

 

per

share

 

 

per

share

 

 

per

share

 

 

per

share

 

 

per

share

 

 

per

share

 

(In $ millions, except per share data)

Earnings (loss) from continuing operations attributable to Celanese Corporation

121

 

 

1.10

 

1,969

 

 

18.00

 

704

 

 

6.43

 

952

 

 

8.70

 

219

 

 

2.00

 

94

 

 

0.86

Income tax provision (benefit)

33

 

 

 

 

(790

)

 

 

 

(575

)

 

 

 

(236

)

 

 

 

(4

)

 

 

 

25

 

 

 

Earnings (loss) from continuing operations before tax

154

 

 

 

 

1,179

 

 

 

 

129

 

 

 

 

716

 

 

 

 

215

 

 

 

 

119

 

 

 

Certain Items attributable to Celanese Corporation (Table 8)

97

 

 

 

 

(114

)

 

 

 

139

 

 

 

 

(438

)

 

 

 

54

 

 

 

 

131

 

 

 

Refinancing and related expenses

 

 

 

7

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

Adjusted earnings (loss) from continuing operations before tax

251

 

 

 

 

1,072

 

 

 

 

268

 

 

 

 

285

 

 

 

 

269

 

 

 

 

250

 

 

 

Income tax (provision) benefit on adjusted earnings(1)

(23

)

 

 

 

(96

)

 

 

 

(23

)

 

 

 

(11

)

 

 

 

(32

)

 

 

 

(30

)

 

 

Adjusted earnings (loss) from continuing operations(2)

228

 

 

2.08

 

976

 

 

8.92

 

245

 

 

2.24

 

274

 

 

2.50

 

237

 

 

2.17

 

220

 

 

2.01

 

Diluted shares (in millions)(3)

Weighted average shares outstanding

109.1

 

 

 

 

108.8

 

 

 

 

109.0

 

 

 

 

108.9

 

 

 

 

108.9

 

 

 

 

108.6

 

 

 

Incremental shares attributable to equity awards

0.4

 

 

 

 

0.6

 

 

 

 

0.5

 

 

 

 

0.5

 

 

 

 

0.4

 

 

 

 

0.6

 

 

 

Total diluted shares

109.5

 

 

 

 

109.4

 

 

 

 

109.5

 

 

 

 

109.4

 

 

 

 

109.3

 

 

 

 

109.2

 

 

 

______________________________

(1)

Calculated using adjusted effective tax rates (Table 3a) as follows:

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

 

Adjusted effective tax rate

9

 

9

 

9

 

4

 

12

 

12

(2)

Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.

 

 

 

Actual Plan

Asset Returns

 

Expected Plan

Asset Returns

 

 

(In percentages)

2023

 

8.1

 

5.2

(3)

Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.

Table 3a

Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Estimated

 

Actual

 

2024

 

2023

 

(In percentages)

US GAAP annual effective tax rate

22

 

 

(67

)

Discrete quarterly recognition of GAAP items(1)

 

 

2

 

Tax impact of other charges and adjustments(2)

(1

)

 

(3

)

Changes in valuation allowances, excluding impact of other charges and adjustments(3)

(6

)

 

13

 

Other, includes effect of discrete current year transactions(4)

(6

)

 

64

 

(5)

Adjusted tax rate

9

 

 

9

 

______________________________
Note: As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate for actual results.
 

(1)

Such as changes in tax laws (including US tax reform), deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.

 

(2)

Reflects the tax impact on pre-tax adjustments presented in Certain Items (Table 8), which are excluded from pre-tax income for adjusted earnings per share purposes.

 

(3)

Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.

 

(4)

Includes tax impacts related to full-year actual tax opportunities and related costs, as well as current year realization of U.S. GAAP benefits deferred in prior years.

 

(5)

Includes the reversal of certain U.S. GAAP deferred tax benefits related to non-recurring internal restructuring transactions related to the M&M acquisition, to centralize ownership of intellectual property with the business and to facilitate future deployment of cash to service acquisition indebtedness. Certain benefits of the internal restructuring will be realized in future periods for adjusted earnings purposes.

 

Table 4

Net Sales by Segment - Unaudited

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions)

Engineered Materials

1,378

 

 

6,149

 

 

1,406

 

 

1,528

 

 

1,585

 

 

1,630

 

Acetyl Chain

1,261

 

 

4,884

 

 

1,181

 

 

1,220

 

 

1,233

 

 

1,250

 

Intersegment eliminations(1)

(28

)

 

(93

)

 

(18

)

 

(25

)

 

(23

)

 

(27

)

Net sales

2,611

 

 

10,940

 

 

2,569

 

 

2,723

 

 

2,795

 

 

2,853

 

___________________________

(1)

Includes intersegment sales primarily related to the Acetyl Chain.

 

Table 4a

Factors Affecting Segment Net Sales Sequentially - Unaudited

 

Three Months Ended March 31, 2024 Compared to Three Months Ended December 31, 2023

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

(1

)

 

(1

)

 

 

(2

)

 

Acetyl Chain

5

 

 

1

 

 

1

 

7

 

 

 

 

 

 

 

 

 

 

 

Total Company

2

 

 

 

 

 

2

 

 

 

Three Months Ended December 31, 2023 Compared to Three Months Ended September 30, 2023

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

(5

)

 

(3

)

 

 

(8

)

 

Acetyl Chain

 

 

(3

)

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

Total Company

(3

)

 

(3

)

 

 

(6

)

 

 

Three Months Ended September 30, 2023 Compared to Three Months Ended June 30, 2023

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

(1

)

 

(3

)

 

 

 

(4

)

 

Acetyl Chain

3

 

 

(3

)

 

(1

)

 

(1

)

 

 

 

 

 

 

 

 

 

 

Total Company

1

 

 

(3

)

 

(1

)

 

(3

)

 

 

Three Months Ended June 30, 2023 Compared to Three Months Ended March 31, 2023

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

2

 

(5

)

 

 

(3

)

 

Acetyl Chain

2

 

(3

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

Total Company

2

 

(4

)

 

(2

)

 

Three Months Ended March 31, 2023 Compared to Three Months Ended December 31, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

34

 

(4

)

 

2

 

32

 

Acetyl Chain

10

 

(2

)

 

2

 

10

 

 

 

 

 

 

 

 

 

 

Total Company

19

 

(4

)

 

2

 

17

 

 

Table 4b

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

(12

)

 

(2

)

 

(1

)

 

(15

)

 

Acetyl Chain

11

 

 

(10

)

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

Total Company

(2

)

 

(5

)

 

(1

)

 

(8

)

 

 

Three Months Ended December 31, 2023 Compared to Three Months Ended December 31, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

21

 

(8

)

 

1

 

14

 

Acetyl Chain

14

 

(11

)

 

1

 

4

 

 

 

 

 

 

 

 

 

 

Total Company

18

 

(10

)

 

1

 

9

 

 

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

75

 

(12

)

 

1

 

64

 

 

Acetyl Chain

4

 

(18

)

 

1

 

(13

)

 

 

 

 

 

 

 

 

 

 

Total Company

33

 

(16

)

 

1

 

18

 

 

 

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

75

 

 

(8

)

 

 

67

 

 

Acetyl Chain

(2

)

 

(19

)

 

 

(21

)

 

 

 

 

 

 

 

 

 

 

Total Company

27

 

 

(15

)

 

12

 

 

 

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

80

 

 

2

 

 

(3

)

 

79

 

 

Acetyl Chain

(9

)

 

(13

)

 

(2

)

 

(24

)

 

 

 

 

 

 

 

 

 

 

Total Company

23

 

 

(8

)

 

(3

)

 

12

 

 

 

Table 4c

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

54

 

(1

)

 

 

53

 

 

Acetyl Chain

2

 

(17

)

 

 

(15

)

 

 

 

 

 

 

 

 

 

 

Total Company

23

 

(10

)

 

 

13

 

 

Table 5

Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions, except percentages)

Net cash provided by (used in) investing activities

(151

)

 

(134

)

 

(168

)

 

375

 

 

(163

)

 

(178

)

Net cash provided by (used in) financing activities

(259

)

 

(1,456

)

 

(240

)

 

(700

)

 

(447

)

 

(69

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

101

 

 

1,899

 

 

830

 

 

403

 

 

762

 

 

(96

)

Capital expenditures on property, plant and equipment

(137

)

 

(568

)

 

(128

)

 

(131

)

 

(145

)

 

(164

)

Contributions from/(Distributions) to NCI

(4

)

 

(11

)

 

 

 

(4

)

 

(6

)

 

(1

)

Free cash flow(1)

(40

)

 

1,320

 

 

702

 

 

268

 

 

611

 

 

(261

)

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

2,611

 

 

10,940

 

 

2,569

 

 

2,723

 

 

2,795

 

 

2,853

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow as % of Net sales

(1.5

)%

 

12.1

%

 

27.3

%

 

9.8

%

 

21.9

%

 

(9.1

)%

______________________________

(1)

Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for contributions from or distributions to our NCI joint ventures.

 
 

Table 6

Cash Dividends Received - Unaudited

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions)

Dividends from equity method investments

27

 

157

 

85

 

7

 

25

 

40

Dividends from equity investments without readily determinable fair values

34

 

126

 

31

 

30

 

31

 

34

Total

61

 

283

 

116

 

37

 

56

 

74

 

Table 7

Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

(In $ millions)

Short-term borrowings and current installments of long-term debt - third party and affiliates

2,439

 

 

1,383

 

 

1,383

 

 

1,408

 

 

1,507

 

 

1,386

 

Long-term debt, net of unamortized deferred financing costs

11,018

 

 

12,301

 

 

12,301

 

 

12,291

 

 

12,889

 

 

13,396

 

Total debt

13,457

 

 

13,684

 

 

13,684

 

 

13,699

 

 

14,396

 

 

14,782

 

Cash and cash equivalents

(1,483

)

 

(1,805

)

 

(1,805

)

 

(1,357

)

 

(1,296

)

 

(1,167

)

Net debt

11,974

 

 

11,879

 

 

11,879

 

 

12,342

 

 

13,100

 

 

13,615

 

 

Table 8

Certain Items - Unaudited

The following Certain Items attributable to Celanese Corporation are included in Net earnings (loss) and are adjustments to non-GAAP measures:

 

 

Q1 '24

 

2023

 

Q4 '23

 

Q3 '23

 

Q2 '23

 

Q1 '23

 

Income Statement Classification

 

(In $ millions)

 

 

Exit and shutdown costs

68

 

 

89

 

 

33

 

 

9

 

 

21

 

26

 

Cost of sales / SG&A / Other (charges) gains, net / Gain (loss) on disposition of businesses and assets, net / Non-operating pension and other postretirement employee benefit (expense) income

Asset impairments

 

 

15

 

 

6

 

 

9

 

 

 

 

Cost of sales / Other (charges) gains, net

Impact from plant incidents and natural disasters(1)

7

 

 

6

 

 

 

 

 

 

 

6

 

Cost of sales

Mergers, acquisitions and dispositions

25

 

 

195

 

 

27

 

 

46

 

 

23

 

99

 

Cost of sales / SG&A

Actuarial (gain) loss on pension and postretirement plans

 

 

69

 

 

69

 

 

 

 

 

 

Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income

Legal settlements and commercial disputes

(8

)

 

12

 

 

4

 

 

2

 

 

6

 

 

Cost of sales / SG&A / Other (charges) gains, net

(Gain) loss on disposition of businesses and assets

 

 

(510

)

 

(3

)

 

(508

)

 

1

 

 

Gain (loss) on disposition of businesses and assets, net

Other

5

 

 

10

 

 

3

 

 

4

 

 

3

 

 

Cost of sales / SG&A

Certain Items attributable to Celanese Corporation

97

 

 

(114

)

 

139

 

 

(438

)

 

54

 

131

 

 

 

___________________________

(1)

Primarily associated with Winter Storms Heather and Elliott in 2024 and 2023, respectively.

 

Table 9

Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited

 

 

 

 

 

 

2023

 

 

 

 

 

(In $ millions, except

percentages)

Net earnings (loss) attributable to Celanese Corporation

 

 

 

 

1,960

 

 

 

 

 

 

 

Adjusted EBIT (Table 1)

 

 

 

 

1,753

 

Adjusted effective tax rate (Table 3a)

 

 

 

 

9

%

Adjusted EBIT tax effected

 

 

 

 

1,595

 

 

 

 

 

 

 

 

2023

 

2022

 

Average

 

(In $ millions, except percentages)

Short-term borrowings and current installments of long-term debt - third parties and affiliates

1,383

 

1,306

 

1,345

 

Long-term debt, net of unamortized deferred financing costs

12,301

 

13,373

 

12,837

 

Celanese Corporation shareholders' equity

7,091

 

5,637

 

6,364

 

Invested capital

 

 

 

 

20,546

 

 

 

 

 

 

 

Return on invested capital (adjusted)

 

 

 

 

7.8

%

 

 

 

 

 

 

Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital

 

 

 

 

9.5

%

 

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