Celanese Corporation Reports Third Quarter 2012 Results

Celanese Corporation (NYSE: CE), a global technology and specialty materials company, today reported third quarter 2012 adjusted earnings per share of $0.93. This compares with $1.27 in the prior year period. Increased volumes and expanded operating margins in the company's portfolio of businesses focused on customer-oriented solutions, which includes Advanced Engineered Materials, and Consumer and Industrial Specialties, were offset by lower margins in Acetyl Intermediates due to continued soft demand and lower pricing across acetyl products and derivatives. Diluted earnings per share from continuing operations for the quarter were $0.74 compared with $1.05 last year.
       
(in $ millions, except per share data) - Unaudited   2012   2011 2012   2011
Net sales 1,609 1,807 4,917 5,149
Operating profit (loss) 163 196 425 593
Net earnings (loss) attributable to Celanese Corporation 117 167 510 512
Operating EBITDA 1 298 374 955 1,119
Diluted EPS - continuing operations $ 0.74 $ 1.05 $ 3.21 $ 3.21
Diluted EPS - total $ 0.73 $ 1.05 $ 3.20 $ 3.22
Adjusted EPS 2   $ 0.93   $ 1.27   $ 3.13   $ 3.89

1 Non-U.S. GAAP measure. See reconciliation in Table 1A.

2 Non-U.S. GAAP measure. See reconciliation in Table 6.

"Celanese delivered on its commitments with a solid quarter amid a challenging economic environment. Our customer-oriented solution businesses generated strong results, reflecting the value we provide to our customers, but demand for acetyl products and derivatives remained at trough-like conditions. The Advanced Engineered Materials and Consumer Specialties businesses each expanded operating EBITDA margins sequentially and year-over-year, excluding affiliate earnings," said Mark Rohr, chairman and chief executive officer. "Celanese's strong operating cash flow in the third quarter enabled the company to improve its net debt position by $124 million from the prior quarter. We will continue to pursue our balanced capital deployment strategy to optimize value for our shareholders."

Operating profit for the quarter was $163 million compared with $196 million in the prior year on expanded operating margins in the company's customer-oriented solution businesses which were offset by lower margins in Acetyl Intermediates. The tax rate and diluted share count for adjusted earnings per share in the third quarter were 17 percent and 160.1 million, respectively. Net earnings were $117 million in the third quarter of 2012 compared with the prior year results of $167 million.

Net sales in the third quarter were $1,609 million compared to $1,807 million in the prior year. The company's portfolio of customer-oriented solution businesses delivered increased year-over-year volumes, but the lower sales in the quarter were primarily driven by lower pricing in its Acetyl Intermediates and Industrial Specialties businesses, as well as unfavorable currency impacts across the company.

Recent Highlights
  • Started up the company's technology development unit for ethanol production at its facility in Clear Lake, Texas. The unit will support the company's continuing development of TCX® ethanol process technology for customers in both industrial-grade and fuel ethanol.
  • Announced the company's new CelFXTM matrix technology for filter media. CelFXTM provides a flexible additive platform for innovation that allows our customers increased filter design flexibility, improved constituent reduction and supports a broad choice for enhancement additives.
  • Increased the company's share repurchase authorization to $400 million. As of September 30, 2012, the company had $136 million remaining under its previous authorization.

Third Quarter Business Segment Overview

Advanced Engineered Materials

Advanced Engineered Materials delivered sustained results despite the impact of weaker economic conditions in Europe. Net sales were $322 million compared with $332 million in the prior year period. Pricing was up by 3 percent, reflecting the value of its innovative, customer-oriented solutions. Net sales, however, were negatively impacted by unfavorable currency. Stronger volumes in the Americas and Asia were more than offset by softer European demand across the majority of its product lines. Operating EBITDA was $109 million compared with $112 million in the prior year period as the higher pricing was offset by lower equity earnings and currency impacts. Equity earnings from the company's affiliates were $45 million compared with $52 million in the prior year period, driven by lower methyl tertiary-butyl ether (MTBE) pricing in the company's Ibn Sina affiliate. Operating profit in the third quarter of 2012 was $43 million compared with $14 million in the same period last year, primarily due to other charges and other adjustments in the third quarter of 2011 related to the company's startup and expansion of its polyacetal (POM) facility in Frankfurt Hoechst Industrial Park, Germany.

Consumer Specialties

Consumer Specialties delivered improved year-over-year performance reflecting the value-added applications it provides to its global customer base. Net sales increased to $314 million compared with $298 million in the same period last year, primarily driven by 6 percent higher year-over-year pricing on continued strong global demand. Operating EBITDA was $87 million compared with $78 million in the same period last year as operating EBITDA margins expanded on the higher pricing. Operating profit in the quarter increased to $70 million from $66 million last year.

Industrial Specialties

Industrial Specialties' net sales in the third quarter of 2012 were $297 million compared with $332 million in the prior year period. Volumes increased by 2 percent year-over-year, primarily due to increased demand in North America and Asia, partially offset by lower European volumes. However, pricing in the quarter was lower than the prior year period due to weaker demand in its Ethylene Vinyl Acetate (EVA) applications and lower raw material costs. Third quarter results were also negatively impacted by the Euro. Operating EBITDA was $36 million compared with $43 million in the prior year period as record results in Emulsions this quarter were more than offset by lower demand for EVA applications. Operating profit in the third quarter of 2012 was $23 million compared with $30 million in the prior year period.

Acetyl Intermediates

Acetyl Intermediates' net sales in the third quarter of 2012 were $785 million compared with $975 million in the same period last year, primarily due to lower pricing and demand across the acetyl chain, as well as negative currency impacts. The lower pricing in the period reflects continued weak economic conditions in Europe and Asia which contributed to softer global demand for acetyl products. Additionally, temporarily elevated industry utilization in the third quarter of 2011 due to planned and unplanned outages of acetyl producers resulted in higher industry pricing in the prior year period. Operating EBITDA in the third quarter of 2012 was $91 million compared with $168 million in the same period last year, primarily due to the lower pricing which was partially offset by lower raw material costs. Operating profit in the current period was $62 million compared with $128 million in the same period last year.

Taxes

The tax rate for adjusted earnings per share was 17 percent in the third quarter of 2012 and the third quarter of 2011. The effective tax rate for continuing operations for the third quarter of 2012 was 31 percent compared with 17 percent in the same period last year. The higher effective tax rate in the third quarter of 2012 was primarily due to changes in uncertain tax positions. Net cash taxes paid were $54 million in the first nine months of 2012 which were comparable with $48 million in the first nine months of 2011.

Strategic Investments

Earnings from equity investments, which are reflected in the company's earnings and operating EBITDA, were $50 million in the third quarter of 2012, a $7 million decrease from the prior year period primarily due to lower MTBE pricing in the company's Ibn Sina affiliate. The cash flow impact of equity investments was $37 million, a $10 million decrease from the prior year period, also related to the company's Ibn Sina affiliate.

Cash Flow

During the first nine months of 2012, the company generated $661 million in cash from operating activities, an $180 million increase from the same period last year, primarily driven by lower trade working capital versus the prior year period. Cash used in investing activities during the first nine months of 2012 was $397 million compared with $296 million in the same period last year. The 2012 results include the company's acquisition of two product lines from Ashland Inc. and investments in other productive assets. In 2011, we received the final payment of $158 million associated with the relocation of our POM operations in Germany, partially offset by lower related capital expenditures in the current period. Net cash used in financing activities during the first nine months of 2012 was $21 million compared with $224 million in the prior year period. During the second quarter of 2011, the company used a net of $116 million to prepay a portion of one of its term loan facilities. Net debt at the end of the third quarter of 2012 was $2,052 million, a $283 million decrease from the end of 2011.

Outlook

"We expect the challenging global economic environment will continue into 2013. Despite this and normal seasonality, we expect fourth quarter 2012 adjusted earnings will be modestly higher than the prior year, reflecting the progress we are making on actions that are within our control. For 2013, we expect earnings growth will be driven by Celanese-specific initiatives and be consistent with our long-term growth objectives of 12 to 14 percent," said Rohr. "We will continue to focus on technology platforms that expand the company's addressable opportunities and invest in technology innovation that enhances our growth prospects."

The company's earnings presentation and prepared remarks related to the third quarter results will be posted on its website at www.celanese.com in the investor section after market close on October 22.

Celanese Corporation is a global technology leader in the production of specialty materials and chemical products that are used in most major industries and consumer applications. Our products, essential to everyday living, are manufactured in North America, Europe and Asia. Known for operational excellence, sustainability and premier safety performance, Celanese delivers value to customers around the globe with best-in-class technologies. Based in Dallas, Texas, the company employs approximately 7,600 employees worldwide and had 2011 net sales of $6.8 billion, with approximately 73% generated outside of North America. For more information about Celanese Corporation and its global product offerings, visit www.celanese.com or the company's blog at www.celaneseblog.com .

Forward-Looking Statements

This release may contain “forward-looking statements,” which include information concerning the company's plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “can,” “could,” “might,” “will” and variations of such words or similar expressions are intended to identify forward-looking statements. 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, electronics and construction industries; changes in the price and availability of raw materials, 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 on to customers or otherwise improve margins through price increases; the ability to maintain plant utilization rates and to implement planned capacity additions and expansions; the ability to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; market acceptance of our technology; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the company; changes in the degree of intellectual property and other legal protection afforded to our products or technology, or the theft of such intellectual property; compliance and other costs and potential disruption or interruption of production or operations due to accidents, cyber security incidents, terrorism or political unrest or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, including the occurrence of acts of war or terrorist incidents or as a result of weather or natural disasters; potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relating to climate change; potential liability resulting from pending or future litigation, 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; 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.

Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP

This release reflects the following performance measures: operating EBITDA, business operating EBITDA, affiliate EBITDA and proportional affiliate EBITDA, adjusted earnings per share and net debt as non-U.S. GAAP measures. These measurements are not recognized in accordance with U.S. GAAP and should not be viewed as an alternative to U.S. GAAP measures of performance. The most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating EBITDA and business operating EBITDA is net income; for proportional affiliate EBITDA is equity in net earnings of affiliates; for affiliate EBITDA is operating profit; for adjusted earnings per share is earnings per common share-diluted; and for net debt is total debt.

Use of Non-U.S. GAAP Financial Information
  • Operating EBITDA is defined by the company as net earnings less interest income plus loss (earnings) from discontinued operations, interest expense, taxes, and depreciation and amortization, and further adjusted for Other Charges and Adjustments as described in Table 7. We present operating EBITDA because we consider it an important supplemental measure of our operations and financial performance. We believe that operating EBITDA is more reflective of our operations as it provides transparency to investors and enhances period-to-period comparability of our operations and financial performance. Operating EBITDA is one of the measures management uses for its planning and budgeting process to monitor and evaluate financial and operating results and for the company's incentive compensation plan. Operating EBITDA should not be considered as an alternative to net income determined in accordance with U.S. GAAP. We may provide guidance on operating EBITDA and are unable to reconcile forecasted operating EBITDA to a U.S. GAAP financial measure because a forecast of Other Charges and Adjustments is not practical.
  • Business operating EBITDA is defined by the company as net earnings less interest income plus loss (earnings) from discontinued operations, interest expense, taxes and depreciation and amortization, and further adjusted for Other Charges and Adjustments as described in Table 7, less equity in net earnings of affiliates, dividend income from cost investments and other (income) expense. This supplemental performance measure reflects the operating results of the company's operations without regard to the financial impact of its equity and cost investments.
  • Affiliate EBITDA is defined by the company as operating profit plus the depreciation and amortization of its equity affiliates. Proportional affiliate EBITDA, a measure used by management to measure performance of its equity investments, is defined by the company as the proportional operating profit plus the proportional depreciation and amortization of its equity investments. The company has determined that it does not have sufficient ownership for operating control of these investments to consider their results on a consolidated basis. The company believes that investors should consider proportional affiliate EBITDA as an additional measure of operating results.
  • Adjusted earnings per share is a measure used by management to measure performance. It is defined by the company as net earnings (loss) available to common shareholders plus preferred dividends, adjusted for other charges and adjustments, and divided by the number of basic common shares, diluted preferred shares, and options valued using the treasury method. We may provide guidance on an adjusted earnings per share basis and are unable to reconcile forecasted adjusted earnings per share to a U.S. GAAP financial measure without unreasonable effort because a forecast of Other Items is not practical. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. Note: 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, where applicable, and specifically excludes changes in uncertain tax positions, discrete items and other material items adjusted out of our U.S. GAAP earnings for adjusted earnings per share purposes, and changes in management's assessments regarding the ability to realize deferred tax assets. We analyze this rate quarterly and adjust 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 tax rate used for U.S. GAAP reporting in any given reporting period. It is not practical to reconcile our prospective adjusted tax rate to the actual U.S. GAAP tax rate in any given future period.
  • Net debt is defined by the company as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure provides useful information to management and investors regarding changes to the company's capital structure. Our management and credit analysts use net debt to evaluate the company's capital structure and assess credit quality. Proportional net debt is defined as our proportionate share of our affiliates' net debt.

Results Unaudited

The results presented in this release, 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.
   
 

Consolidated Statements of Operations - Unaudited
 
Three Months Ended Nine Months Ended
September 30, September 30,
(in $ millions, except share and per share data)   2012   2011 2012   2011
Net sales 1,609 1,807 4,917 5,149
Cost of sales   (1,285 ) (1,406 ) (3,992 ) (3,987 )
Gross profit 324 401 925 1,162
Selling, general and administrative expenses (121 ) (140 ) (379 ) (408 )
Amortization of intangible assets (12 ) (17 ) (38 ) (50 )
Research and development expenses (24 ) (24 ) (76 ) (72 )
Other (charges) gains, net 2 (24 ) (1 ) (39 )
Foreign exchange gain (loss), net (4 ) 1 (4 ) 1
Gain (loss) on disposition of businesses and asset, net   (2 ) (1 ) (2 ) (1 )
Operating profit (loss) 163 196 425 593
Equity in net earnings (loss) of affiliates 50 57 163 146
Interest expense (44 ) (54 ) (134 ) (166 )
Refinancing expense (3 )
Interest income 1 1 2
Dividend income - cost investments 1 1 85 80
Other income (expense), net   3     4   9  
Earnings (loss) from continuing operations before tax 173 201 544 661
Income tax (provision) benefit   (54 ) (34 ) (32 ) (151 )
Earnings (loss) from continuing operations   119   167   512   510  
Earnings (loss) from operation of discontinued operations (3 ) (3 ) 3
Gain (loss) on disposition of discontinued operations
Income tax (provision) benefit, discontinued operations   1     1   (1 )
Earnings (loss) from discontinued operations   (2 )   (2 ) 2  
Net earnings (loss) 117 167 510 512
Net earnings (loss) attributable to noncontrolling interests          
Net earnings (loss) attributable to Celanese Corporation 117 167 510 512
Cumulative preferred stock dividends          
Net earnings (loss) available to common shareholders   117   167   510   512  
Amounts attributable to Celanese Corporation
Earnings (loss) per common share - basic
Continuing operations 0.75 1.07 3.24 3.27
Discontinued operations   (0.01 )   (0.01 ) 0.01  
Net earnings (loss) - basic   0.74   1.07   3.23   3.28  
Earnings (loss) per common share - diluted
Continuing operations 0.74 1.05 3.21 3.21
Discontinued operations   (0.01 )   (0.01 ) 0.01  
Net earnings (loss) - diluted   0.73   1.05   3.20   3.22  
Weighted average shares (in millions)
Basic 159.1 156.2 157.9 156.1
Diluted   160.1   159.0   159.6   159.0  
   
 

Consolidated Balance Sheets - Unaudited
 
(in $ millions) As of As of
  September 30, 2012

December 31,2011
ASSETS
Current assets
Cash & cash equivalents 928 682
Trade receivables - third party and affiliates, net 932 871
Non-trade receivables, net 188 235
Inventories 711 712
Deferred income taxes 106 104
Marketable securities, at fair value 56 64
Other assets   47   35  
Total current assets   2,968   2,703  
Investments in affiliates 775 824
Property, plant and equipment, net 3,295 3,269
Deferred income taxes 539 421
Other assets 446 344
Goodwill 768 760
Intangible assets, net   174   197  
Total assets   8,965   8,518  
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates 141 144
Trade payables - third party and affiliates 685 673
Other liabilities 507 539
Deferred income taxes 19 17
Income taxes payable   43   12  
Total current liabilities   1,395   1,385  
Long-term debt 2,839 2,873
Deferred income taxes 131 92
Uncertain tax positions 189 182
Benefit obligations 1,354 1,492
Other liabilities 1,142 1,153
Commitments and contingencies
Stockholders' equity
Preferred stock
Common stock
Treasury stock, at cost (897 ) (860 )
Additional paid-in capital 731 627
Retained earnings 2,903 2,424
Accumulated other comprehensive income (loss), net   (822 ) (850 )
Total Celanese Corporation stockholders' equity 1,915 1,341
Noncontrolling interests      
Total equity   1,915   1,341  
Total liabilities and equity   8,965   8,518  
   
 

Table 1

Business Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA -

a Non-U.S. GAAP Measure - Unaudited
 
Three Months Ended Nine Months Ended
June 30,   September 30, September 30,
(in $ millions)   2012 2012   2011 2012   2011
Net Sales
Advanced Engineered Materials 323 322 332 962 1,006
Consumer Specialties 327 314 298 905 855
Industrial Specialties 327 297 332 933 951
Acetyl Intermediates 821 785 975 2,458 2,702
Other Activities 1 1
Intersegment eliminations   (123 ) (109 ) (130 ) (341 ) (366 )
Total   1,675   1,609   1,807   4,917   5,149  
Operating Profit (Loss)
Advanced Engineered Materials 21 43 14 85 79
Consumer Specialties 75 70 66 184 168
Industrial Specialties 34 23 30 76 83
Acetyl Intermediates 77 62 128 199 392
Other Activities 1   (43 ) (35 ) (42 ) (119 ) (129 )
Total   164   163   196   425   593  
Other Charges and Other Adjustments 2
Advanced Engineered Materials 10 (8 ) 18 5 52
Consumer Specialties (1 ) 7 3 23 18
Industrial Specialties 2
Acetyl Intermediates 1 7 12 10 (7 )
Other Activities 1   9     10   17   17  
Total   19   6   43   57   80  
Depreciation and Amortization Expense 3
Advanced Engineered Materials 28 29 27 84 65
Consumer Specialties 10 10 9 29 27
Industrial Specialties 13 13 12 39 34
Acetyl Intermediates 19 20 25 59 75
Other Activities 1   4   3   4   10   10  
Total   74   75   77   221   211  
Business Operating EBITDA
Advanced Engineered Materials 59 64 59 174 196
Consumer Specialties 84 87 78 236 213
Industrial Specialties 47 36 42 117 117
Acetyl Intermediates 97 89 165 268 460
Other Activities 1   (30 ) (32 ) (28 ) (92 ) (102 )
Total   257   244   316   703   884  
Equity Earnings, Cost - Dividend Income and Other Income (Expense)
Advanced Engineered Materials 55 45 53 143 127
Consumer Specialties 84 85 80
Industrial Specialties 1 1
Acetyl Intermediates 2 2 3 5 7
Other Activities 1   4   7   1   19   20  
Total   145   54   58   252   235  
Operating EBITDA
Advanced Engineered Materials 114 109 112 317 323
Consumer Specialties 168 87 78 321 293
Industrial Specialties 47 36 43 117 118
Acetyl Intermediates 99 91 168 273 467
Other Activities 1   (26 ) (25 ) (27 ) (73 ) (82 )
Total   402   298   374   955   1,119  

1 Other Activities includes corporate selling, general and administrative expenses and the results from captive insurance companies.

2 See Table 7 for details.

3 Excludes accelerated depreciation and amortization expense included in Other Charges and Other Adjustments above. See Table 1A for details.
   
 

Table 1A

Reconciliation of Consolidated Net Earnings (Loss) to Operating EBITDA -

a Non-U.S. GAAP Measure - Unaudited
 
Three Months Ended Nine Months Ended
June 30,   September 30, September 30,
(in $ millions)   2012 2012   2011 2012   2011
Net earnings (loss) attributable to Celanese Corporation 210 117 167 510 512
(Earnings) loss from discontinued operations 2 2 (2 )
Interest income (1 ) (1 ) (2 )
Interest expense 45 44 54 134 166
Refinancing expense 3
Income tax provision (benefit) 54 54 34 32 151
Depreciation and amortization expense 2 74 75 77 221 211
Other charges (gains), net 1 3 (2 ) 24 1 39
Other adjustments 1   16   8   19   56   41  
Operating EBITDA   402   298   374   955   1,119  
Detail by Business Segment
Advanced Engineered Materials 114 109 112 317 323
Consumer Specialties 168 87 78 321 293
Industrial Specialties 47 36 43 117 118
Acetyl Intermediates 99 91 168 273 467
Other Activities 3   (26 ) (25 ) (27 ) (73 ) (82 )
Operating EBITDA   402   298   374   955   1,119  

1 See Table 7 for details.

2 Excludes accelerated depreciation and amortization expense as detailed in the table below and included in Other adjustments above.

3 Other Activities includes corporate selling, general and administrative expenses and the results from captive insurance companies.
   
Three Months Ended Nine Months Ended
June 30,   September 30, September 30,
(in $ millions)   2012 2012   2011 2012   2011
Advanced Engineered Materials 3
Consumer Specialties 1 3 4 7
Industrial Specialties 2
Acetyl Intermediates
Other Activities 3  
Accelerated depreciation and amortization expense 1 3 6 10
Depreciation and amortization expense 2   74 75 77 221 211
Total depreciation and amortization expense   75 78 77 227 221
         
 

Table 2

Factors Affecting Business Segment Net Sales - Unaudited
 

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011
 
    Volume Price Currency Other Total

(In percentages)
Advanced Engineered Materials (1 ) 3 (5 ) (3 )
Consumer Specialties 6 (1 ) 5
Industrial Specialties 2 (8 ) (5 ) (11 )
Acetyl Intermediates (5 ) (11 ) (3 ) (19 )
Total Company   (2 ) (6 ) (4 ) 1 (11 )
         
 

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011
 
    Volume Price Currency Other Total

(In percentages)
Advanced Engineered Materials (3 ) 3 (4 ) (4 )
Consumer Specialties 7 (1 ) 6
Industrial Specialties 4 (2 ) (4 ) (2 )
Acetyl Intermediates 2 (8 ) (3 ) (9 )
Total Company   1   (3 ) (3 ) (5 )
 

 

Table 3

Cash Flow Information - Unaudited
 
Nine Months Ended
September 30,
(in $ millions) 2012   2011
Net cash provided by operating activities 661 481
Net cash (used in) investing activities 1 (397 ) (296 )
Net cash (used in) financing activities (21 ) (224 )
Exchange rate effects on cash and cash equivalents 3 3
Cash and cash equivalents at beginning of period 682   740  
Cash and cash equivalents at end of period 928   704  

1 2012 and 2011 include $43 million and $174 million, respectively, of capital expenditures related to the relocation of our Kelsterbach, Germany POM operations. 2011 includes $158 million of cash proceeds related to the settlement with the Frankfurt, Germany Airport to move our POM operations from Kelsterbach, Germany.
   
 

Table 4

Cash Dividends Received - Unaudited
 
Three Months Ended Nine Months Ended
September 30, September 30,
(in $ millions)   2012   2011 2012   2011
Dividends from equity investments 37 47 222 165
Dividends from cost investments   1 1 85 80
Total   38 48 307 245
     
 

Table 5

Net Debt - Reconciliation of a Non-U.S. GAAP Measure - Unaudited
 
As of As of As of
(in $ millions)  

June 30,2012

September 30,2012

December 31,2011
Short-term borrowings and current installments of long-term debt - third party and affiliates 131 141 144
Long-term debt   2,845 2,839 2,873
Total debt 2,976 2,980 3,017
Less: Cash and cash equivalents   800 928 682
Net debt   2,176 2,052 2,335
     
 

Table 6

Adjusted Earnings (Loss) Per Share - Reconciliation of a Non-U.S. GAAP Measure - Unaudited
 
Three Months Ended Nine Months Ended
September 30, September 30,
(in $ millions, except share and per share data)   2012   2011 2012   2011
 

pershare
 

pershare
 

pershare

pershare
Earnings (loss) from continuing operations 119 0.74 167 1.05 512 3.21 510 3.21
Deduct: Income tax (provision) benefit   (54 )     (34 )     (32 )     (151 )    
Earnings (loss) from continuing operations before tax 173 201 544 661
Other charges and other adjustments 1 6 43 57 80
Refinancing - related expenses         (1 )           5      
Adjusted earnings (loss) from continuing operations before tax 179 243 601 746
Income tax (provision) benefit on adjusted earnings 2 (30 ) (41 ) (102 ) (127 )
Less: Noncontrolling interests                          
Adjusted earnings (loss) from continuing operations   149     0.93 202     1.27 499     3.13 619     3.89
Diluted shares (in millions) 3                          
Weighted average shares outstanding 159.1 156.2 157.9 156.1
Dilutive stock options 0.3 1.9 1.1 2.0
Dilutive restricted stock units       0.7     0.9     0.6     0.9
Total diluted shares       160.1     159.0     159.6     159.0

1 See Table 7 for details.

2 The adjusted effective tax rate is 17% and 17% for the three and nine months ended September 30, 2012 and 2011, respectively.

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

Table 7

Other Charges and Other Adjustments - Reconciliation of a Non-U.S. GAAP Measure - Unaudited
 
Other Charges (Gains), net:
Three Months Ended Nine Months Ended
June 30, September 30, September 30,
(in $ millions)   2012 2012 2011 2012 2011
Employee termination benefits 1 1 5 2 18
Kelsterbach plant relocation 2 3 14 5 43
Plumbing actions (4 ) (2 ) (4 ) (6 )
Commercial disputes (2 ) 7 (2 ) (15 )
Other         (1 )
Total   3 (2 ) 24   1   39  
 
Other Adjustments: 1
Three Months Ended Nine Months Ended
June 30, September 30, September 30, Income Statement
(in $ millions)   2012 2012 2011 2012 2011   Classification
Business optimization 3 2 8 7 Cost of sales / SG&A
Kelsterbach plant relocation 8 (7 ) 5 4 7 Cost of sales
Plant closures 2 10 2 16 15 Cost of sales / SG&A
(Gain) loss on disposition of assets 1 (1 ) 1 (1 ) (Gain) loss on disposition
Write-off of other productive assets (1 ) Cost of sales
Commercial disputes 7 7 Cost of sales
Acetate production interruption costs 10 Cost of sales
Other   3 4   4   17   7   Various
Total   16 8   19   56   41  
Total other charges and other adjustments   19 6   43   57   80  

1 These items are included in net earnings but not included in other charges (gains), net.
   
 

Table 8

Equity Affiliate Results and Reconciliation of Operating Profit to Affiliate EBITDA -

a Non-U.S. GAAP Measure - Total - Unaudited
 
Three Months Ended Nine Months Ended
September 30, September 30,
(in $ millions)   2012   2011 2012   2011
Net Sales
Affiliates - Asia 1 431 428 1,295 1,232
Affiliates - Middle East 2 281 334 965 851
Infraserv Affiliates 3   457   540   1,402   1,597  
Total   1,169   1,302   3,662   3,680  
Operating Profit
Affiliates - Asia 1 55 56 158 151
Affiliates - Middle East 2 134 163 470 369
Infraserv Affiliates 3   31   33   91   100  
Total   220   252   719   620  
Depreciation and Amortization
Affiliates - Asia 1 19 20 57 57
Affiliates - Middle East 2 9 8 32 38
Infraserv Affiliates 3   25   29   78   84  
Total   53   57   167   179  
Affiliate EBITDA
Affiliates - Asia 1 74 76 215 208
Affiliates - Middle East 2 143 171 502 407
Infraserv Affiliates 3   56   62   169   184  
Total   273   309   886   799  
Net Income
Affiliates - Asia 1 37 39 105 103
Affiliates - Middle East 2 120 145 420 328
Infraserv Affiliates 3   17   16   65   66  
Total   174   200   590   497  
Net Debt
Affiliates - Asia 1 378 134 378 134
Affiliates - Middle East 2 (94 ) (115 ) (94 ) (115 )
Infraserv Affiliates 3   287   239   287   239  
Total   571   258   571   258  

1 Affiliates - Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (2012 - 0%, 2011 - 50%). Una SA was divested during the Three Months Ended March 31, 2011.

2 Affiliates - Middle East accounted for using the equity method includes National Methanol Company (Ibn Sina) (25%).

3 Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%).
   
 

Table 8 (continued)

Equity Affiliate Results and Reconciliation of Proportional Operating Profit to Proportional Affiliate EBITDA - a Non-U.S. GAAP Measure - Celanese Proportional Share - Unaudited
 
Three Months Ended Nine Months Ended
September 30, September 30,
(in $ millions)   2012   2011 2012   2011
Proportional Net Sales
Affiliates - Asia 1 199 198 597 570
Affiliates - Middle East 2 70 84 241 213
Infraserv Affiliates 3   150   178   460   526  
Total   419   460   1,298   1,309  
Proportional Operating Profit
Affiliates - Asia 1 26 26 74 71
Affiliates - Middle East 2 34 41 118 92
Infraserv Affiliates 3   10   10   30   32  
Total   70   77   222   195  
Proportional Depreciation and Amortization
Affiliates - Asia 1 8 9 26 26
Affiliates - Middle East 2 2 2 8 10
Infraserv Affiliates 3   8   10   25   28  
Total   18   21   59   64  
Proportional Affiliate EBITDA
Affiliates - Asia 1 34 35 100 97
Affiliates - Middle East 2 36 43 126 102
Infraserv Affiliates 3   18   20   55   60  
Total   88   98   281   259  
Equity in Net Earnings of Affiliates (as reported in the Consolidated Statement of Operations)
Affiliates - Asia 1 18 18 50 48
Affiliates - Middle East 2 27 34 93 77
Infraserv Affiliates 3   5   5   20   21  
Total   50   57   163   146  
Proportional Affiliate EBITDA in Excess of Equity in Net Earnings of Affiliates
Affiliates - Asia 1 16 17 50 49
Affiliates - Middle East 2 9 9 33 25
Infraserv Affiliates 3   13   15   35   39  
Total   38   41   118   113  
Proportional Net Debt
Affiliates - Asia 1 171 60 171 60
Affiliates - Middle East 2 (24 ) (29 ) (24 ) (29 )
Infraserv Affiliates 3   94   79   94   79  
Total   241   110   241   110  

1 Affiliates - Asia accounted for using the equity method includes Polyplastics (45%), Korean Engineering Plastics (50%), Fortron Industries (50%), Una SA (2012 - 0%, 2011 - 50%). Una SA was divested during the Three Months Ended March 31, 2011.

2 Affiliates - Middle East accounted for using the equity method includes National Methanol Company (Ibn Sina) (25%).

3 Infraserv Affiliates accounted for using the equity method includes Infraserv Hoechst (32%), Infraserv Gendorf (39%) and Infraserv Knapsack (27%).

Copyright Business Wire 2010

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