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Celanese Corporation Reports Full Year 2020 and Fourth Quarter Earnings; Outlines Strong 2021 Growth Outlook

Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported GAAP diluted earnings per share of $16.85 and adjusted earnings per share of $7.64. Net sales for the full year were $5.7 billion, as pricing and volume declined by 6 percent and 5 percent, respectively, from 2019. Amid the ongoing global COVID-19 pandemic, Celanese executed on controllable actions, including over $200 million in productivity initiatives, to mitigate challenges in 2020. The Company generated resilient operating cash flow of $1.3 billion and free cash flow of $950 million. During 2020, Celanese returned $943 million of cash to shareholders, consisting of $650 million in share repurchases and $293 million in dividends. The Company repurchased 5 percent of total shares outstanding across 2020. The close of the Polyplastics transaction in October provided cash proceeds of approximately $1.6 billion which contributed to $500 million of share repurchases in the second half of the year. With continued cash generation and current cash and short-term investment balances, Celanese has significant capacity to invest in organic and inorganic growth opportunities as well as future share repurchases.

Celanese also reported fourth quarter GAAP diluted earnings per share of $12.50 and adjusted earnings per share of $2.09. The differences between GAAP and adjusted earnings per share for the fourth quarter and full year were due primarily to Certain Items, including a $1.4 billion gain on the sale of Polyplastics and a pension mark to market adjustment of $95 million.

"This past year presented enormous challenges across all of our businesses in every region of the world. The dedication of our employees and the resiliency of our businesses were evident in our 2020 financial performance. I thank our teams for their actions throughout this year to strengthen Celanese despite the headwinds of COVID-19, including driving sustainable productivity and supply chain initiatives, accelerating our turnaround activity, integrating the Elotex acquisition, and taking strategic action on our Engineered Materials joint ventures. As a result of these actions and many others, we are well-positioned to drive strong earnings growth in 2021," said Lori Ryerkerk, chairman and chief executive officer.

Fourth Quarter 2020 and Full Year 2020 Financial Highlights:

Three Months Ended

December 31,
2020

September 30,
2020

December 31,
2019

(unaudited)

(In $ millions, except per share data)

Net Sales

Engineered Materials

572

526

539

Acetate Tow

134

129

148

Acetyl Chain

910

776

771

Intersegment Eliminations

(25

)

(20

)

(26

)

Total

1,591

1,411

1,432

Operating Profit (Loss)

Engineered Materials

62

84

88

Acetate Tow

30

30

22

Acetyl Chain

186

121

108

Other Activities

(75

)

(51

)

(150

)

Total

203

184

68

Net Earnings (Loss)

1,454

209

45

Adjusted EBIT(1)

Engineered Materials

82

116

136

Acetate Tow

59

59

54

Acetyl Chain

187

126

144

Other Activities

(28

)

(11

)

(31

)

Total

300

290

303

Equity Earnings and Dividend Income, Other Income (Expense)

Engineered Materials

15

21

45

Acetate Tow

29

28

24

Operating EBITDA(1)

387

378

387

Diluted EPS - continuing operations

$

12.50

$

1.76

$

0.35

Diluted EPS - total

$

12.50

$

1.75

$

0.36

Adjusted EPS(1)

$

2.09

$

1.95

$

1.99

Net cash provided by (used in) investing activities

979

(78

)

(168

)

Net cash provided by (used in) financing activities

(933

)

(290

)

(199

)

Net cash provided by (used in) operating activities

274

431

326

Free cash flow(1)

181

351

179

Year Ended December 31,

2020

2019

(unaudited)

(In $ millions, except per share data)

Net Sales

Engineered Materials

2,081

2,386

Acetate Tow

519

636

Acetyl Chain

3,147

3,392

Intersegment Eliminations

(92

)

(117

)

Total

5,655

6,297

Operating Profit (Loss)

Engineered Materials

235

446

Acetate Tow

118

52

Acetyl Chain

563

678

Other Activities

(252

)

(342

)

Total

664

834

Net Earnings (Loss)

1,992

858

Adjusted EBIT(1)

Engineered Materials

403

621

Acetate Tow

249

268

Acetyl Chain

568

727

Other Activities

(89

)

(140

)

Total

1,131

1,476

Equity Earnings and Dividend Income, Other Income (Expense)

Engineered Materials

115

168

Acetate Tow

126

112

Operating EBITDA(1)

1,475

1,805

Diluted EPS - continuing operations

$

16.85

$

6.89

Diluted EPS - total

$

16.75

$

6.84

Adjusted EPS(1)

$

7.64

$

9.53

Net cash provided by (used in) investing activities

592

(493

)

Net cash provided by (used in) financing activities

(1,471

)

(935

)

Net cash provided by (used in) operating activities

1,343

1,454

Free cash flow(1)

950

1,074

 

______________________________

(1) See "Non-US GAAP Financial Measures" below.

Full Year Business Segment Overview

Engineered Materials

Engineered Materials generated net sales of $2.1 billion, down 13 percent over 2019 due to an 11 percent decline in volume and a 3 percent decline in pricing. Volume in 2020 was unfavorably impacted by global demand softness due to COVID-19, particularly in the Western Hemisphere where demand recovery still lags Asia. Despite broad demand recovery at year end, 2020 Engineered Materials volume in the automotive, electronics, consumer, and medical end markets remained below prior year levels. The business delivered GAAP operating profit of $235 million and adjusted EBIT of $403 million in 2020, which included turnaround costs of approximately $70 million for the Bishop, Texas and Frankfurt, Germany POM facilities. GAAP operating profit margin was 11 percent and adjusted EBIT margin was 19 percent in 2020. Affiliate earnings declined 32 percent from 2019, due to depressed demand and pricing conditions as well as the sale of the Polyplastics joint venture (JV) in October.

Acetyl Chain

The Acetyl Chain delivered 2020 net sales of $3.1 billion, a decline of 7 percent over last year. Pricing declined 8 percent due to demand softness from COVID-19 and an overall deflationary backdrop throughout most of 2020. Volume in 2020 was flat compared to the prior year as the business successfully supplied elevated demand levels towards the end of the year. Despite significant industry headwinds during the year, the Acetyl Chain generated GAAP operating profit of $563 million and adjusted EBIT of $568 million, with margins of approximately 18 percent. By delivering adjusted EBIT approaching $600 million during 2020, a threshold that has only been surpassed three times in the last ten years, the Acetyl Chain demonstrated the resiliency of its business model and the unparalleled optionality it exercises.

Acetate Tow

Acetate Tow generated full year net sales of $519 million, which reflected a decline in volume of 14 percent due to the expiration of an acetate flake contract and a modest secular decline in overall global demand. GAAP operating profit was $118 million and adjusted EBIT was $249 million for 2020 and reflected the impact of productivity initiatives and affiliate performance. Dividends from affiliates were $126 million in 2020, 13 percent higher from the prior year due to continued strong Chinese affiliate performance.

Fourth Quarter 2020 Highlights:

  • Closed the transaction to monetize the Company's equity investment in the Polyplastics JV for cash proceeds of $1.6 billion.
  • Signed a memorandum of understanding to restructure the Korea Engineering Plastics Co. JV as a manufacturing JV that would give Celanese and its JV partner offtake rights to POM in Asia.
  • Resumed the project to expand the Clear Lake acetic acid capacity from 1.3 million tons to 2.0 million tons.
  • Announced the intent to build a world-scale liquid crystal polymer (LCP) polymerization plant in China to come online in 2024 to support growth across 5G, 'Internet of Things' and vehicle electrification applications.
  • Launched POM ECO-B, a sustainable product containing up to 97% bio-content via a mass-balance approach and supporting the growing demand for materials with renewable content.
  • Extended a long-term contract with Nanjing Dragon Crown Liquid Chemical Terminal Co. Ltd. for providing terminal services to the Company's integrated chemical facility in Nanjing, China.
  • Announced a virtual Investor Day for March 25, 2021. The executive management team will provide details on the Company's business strategies and outline the path for growth through 2023.

Fourth Quarter 2020 Business Segment Overview

Engineered Materials

Engineered Materials reported net sales of $572 million in the fourth quarter, resulting from a sequential volume increase of 7 percent. Volume expansion was driven by strong demand recovery across several end markets, particularly automotive in Asia, modest recovery in medical, and continued resiliency in electronics. Pricing in the fourth quarter remained flat sequentially as pricing initiatives across the business helped to offset typical, unfavorable regional mix at year end. Engineered Materials generated GAAP operating income of $62 million and adjusted EBIT of $82 million at margins of 11 percent and 14 percent, respectively, during the fourth quarter. By offsetting higher costs in the fourth quarter due to broad raw material and energy inflation, as well as higher manufacturing spend as plants returned to more normal operations, the business limited the sequential declines in fourth quarter adjusted EBIT to costs associated with the Frankfurt POM turnaround of approximately $30 million and lower affiliate earnings. Despite the major turnaround lasting six weeks, the business successfully met higher demand across the industry. Affiliate earnings declined $6 million sequentially due primarily to the sale of the Polyplastics JV.

Acetyl Chain

The Acetyl Chain generated net sales of $910 million, due to a 10 percent pricing increase and a 6 percent volume increase from the prior quarter. Pricing and volume expanded sequentially due to tightened industry conditions in November and December, particularly in Chinese acetic acid. In anticipation of the Clear Lake acetic acid turnaround, the business sourced approximately 100 kt of acetic acid and VAM early in the quarter to continue to reliably supply customers. The business also successfully offset the impact of year end seasonality, resulting in reduced emulsions sales, by pivoting to sell 7 percent more tonnage in acetic acid and VAM compared to the prior quarter. The Acetyl Chain generated GAAP operating profit of $186 million and adjusted EBIT of $187 million, at margins of 20 percent and 21 percent, respectively. Despite higher raw material costs and the impact of a $10 million turnaround at the Clear Lake facility, the Acetyl Chain leveraged improved industry dynamics to deliver approximately 50 percent earnings growth over the prior quarter.

Acetate Tow

Acetate Tow recorded net sales of $134 million, which reflected a sequential volume increase of 4 percent. Fourth quarter GAAP operating profit was $30 million and adjusted EBIT was $59 million, consistent with the prior quarter and reflecting the stabilized earnings profile of the business. Dividends from affiliates in the fourth quarter were $29 million and flat sequentially.

Cash Flow and Tax

The Company generated 2020 operating cash flow and free cash flow of $1.3 billion and $950 million, respectively. Capital expenditures in 2020 were $364 million and consistent with the prior year. The Company returned $943 million in cash to shareholders during 2020, including $650 million of share repurchases and $293 million of dividends. Celanese completed $389 million of share repurchases during the fourth quarter of 2020 and has approximately $1.1 billion remaining under the current share repurchase authorization as of the end of 2020.

The effective US GAAP tax rate was 11 percent for 2020 compared to 13 percent for 2019, primarily due to the tax impact of certain divestitures and reorganization transactions, partially offset by adjustments to uncertain tax positions and valuation allowances on tax attribute carryforwards for future periods. The tax rate for adjusted earnings per share was 12 percent for 2020, 1 percent lower year over year, due to the utilization of foreign tax credits in 2020.

Outlook

"We were encouraged by the broad continuation in recovery across the fourth quarter and the fact that most end markets have reached pre-COVID demand levels," continued Ryerkerk. "While the pandemic remains a challenge to how we work and we closely monitor the current resurgence in the US and Europe, we successfully ended 2020 with strong performance and entered 2021 with momentum. At this point, we expect current demand conditions, including favorable Acetyl Chain industry dynamics, will persist through the first quarter and anticipate first quarter 2021 adjusted earnings of $2.50 to $2.75 per share. Looking to the full year, we expect that contributions from our controllable actions including productivity, turnaround schedules, and share repurchases along with fundamental demand recovery to date will position us to deliver adjusted earnings of approximately $9.50 to $10.00 per share in 2021. With our uniquely positioned businesses and significant firepower to target high-return opportunities, Celanese remains exceptionally well-positioned to drive sustained value creation for shareholders."

The Company is unable to reconcile forecasted adjusted earnings per share growth to US GAAP diluted earnings per share without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, is not practical. For more information, see "Non-GAAP Financial Measures" below.

The Company's prepared remarks related to the fourth quarter will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library on January 28, 2021. 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 chemical leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2020 net sales of $5.7 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com or our 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. 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: the extent to which the COVID-19 pandemic continues to adversely impact the economic environment, market demand and our operations, as well as the pace of any economic recovery; 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; 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 as well as facility turnarounds; the ability to reduce or maintain their current levels of production costs and to improve productivity by implementing technological improvements to existing plants; the ability to identify desirable potential acquisition targets and to complete acquisition or investment transactions consistent with the Company's strategy; increased price competition and the introduction of competing products by other companies; market acceptance of our technology; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, cyber security 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 occurrence of acts of war or terrorist incidents or as a result of weather or natural disasters or other crises including public health crises; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in tariffs, tax rates or legislation; 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; 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.

The extent to which COVID-19 will adversely impact our business, financial condition and results of operations will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, including: the extent of any resurgence in infections and the spread of the disease, and the effectiveness of any vaccines; additional governmental, business and individual actions to contain the spread of the outbreak, including social distancing, work-at-home, stay-at-home and shelter-in-place orders and shutdowns, travel restrictions and quarantines; the extent to which these conditions depress economic activity generally and demand for our products specifically and affect the financial markets; the effect of the outbreak on our customers, suppliers, supply chain and other business partners; our ability during the outbreak to provide our products and services, including the health and well-being of our employees; business disruptions caused by actual or potential plant, workplace and office closures; the risk that we could be exposed to liability, negative publicity or reputational harm related to any incidents of actual or perceived transmission of COVID-19 among employees at our facilities; the ability of our customers to pay for our products and services during and following the outbreak; the impact of the outbreak on the financial markets and economic activity generally; our ability to access usual sources of liquidity on reasonable terms; and our ability to comply with the financial covenant in our Credit Agreement if a material and prolonged economic downturn results in increased indebtedness or substantially lower EBITDA.

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 three business segments, Engineered Materials, Acetate Tow and 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, 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 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.
  • 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 cash flow from operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway").

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 January 28, 2021 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

 

December 31,
2020

 

September 30,
2020

 

December 31,
2019

 

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

Net sales

 

1,591

 

1,411

 

1,432

Cost of sales

 

(1,215

)

 

(1,084

)

 

(1,116

)

Gross profit

 

376

 

327

 

316

Selling, general and administrative expenses

 

(137

)

 

(106

)

 

(125

)

Amortization of intangible assets

 

(5

)

 

(6

)

 

(6

)

Research and development expenses

 

(20

)

 

(19

)

 

(17

)

Other (charges) gains, net

 

(2

)

 

(10

)

 

(102

)

Foreign exchange gain (loss), net

 

(3

)

 

(2

)

 

2

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

 

(6

)

 

 

Operating profit (loss)

 

203

 

184

 

68

Equity in net earnings (loss) of affiliates

 

21

 

25

 

48

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

 

(66

)

 

28

 

(71

)

Interest expense

 

(26

)

 

(28

)

 

(28

)

Interest income

 

2

 

1

 

2

Dividend income - equity investments

 

28

 

29

 

24

Gain (loss) on sale of investments in affiliates

 

1,408

 

 

Other income (expense), net

 

1

 

2

 

(2

)

Earnings (loss) from continuing operations before tax

 

1,571

 

241

 

41

Income tax (provision) benefit

 

(117

)

 

(30

)

 

3

Earnings (loss) from continuing operations

 

1,454

 

211

 

44

Earnings (loss) from operation of discontinued operations

 

(1

)

 

(2

)

 

1

Income tax (provision) benefit from discontinued operations

 

1

 

 

Earnings (loss) from discontinued operations

 

 

(2

)

 

1

Net earnings (loss)

 

1,454

 

209

 

45

Net (earnings) loss attributable to noncontrolling interests

 

(1

)

 

(2

)

 

(2

)

Net earnings (loss) attributable to Celanese Corporation

 

1,453

 

207

 

43

Amounts attributable to Celanese Corporation

 

 

 

Earnings (loss) from continuing operations

 

1,453

 

209

 

42

Earnings (loss) from discontinued operations

 

 

(2

)

 

1

Net earnings (loss)

 

1,453

 

207

 

43

Earnings (loss) per common share - basic

 

 

 

Continuing operations

 

12.56

 

1.77

 

0.35

Discontinued operations

 

 

(0.02

)

 

0.01

Net earnings (loss) - basic

 

12.56

 

1.75

 

0.36

Earnings (loss) per common share - diluted

 

 

 

Continuing operations

 

12.50

 

1.76

 

0.35

Discontinued operations

 

 

(0.01

)

 

0.01

Net earnings (loss) - diluted

 

12.50

 

1.75

 

0.36

Weighted average shares (in millions)

 

 

 

Basic

 

115.7

 

118.0

 

120.3

Diluted

 

116.3

 

118.6

 

120.9

Consolidated Statements of Operations - Unaudited

 

Year Ended December 31,

 

2020

2019

 

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

Net sales

 

5,655

 

6,297

Cost of sales

 

(4,362

)

 

(4,691

)

Gross profit

 

1,293

 

1,606

Selling, general and administrative expenses

 

(482

)

 

(483

)

Amortization of intangible assets

 

(22

)

 

(24

)

Research and development expenses

 

(74

)

 

(67

)

Other (charges) gains, net

 

(39

)

 

(203

)

Foreign exchange gain (loss), net

 

(5

)

 

7

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

 

(7

)

 

(2

)

Operating profit (loss)

 

664

 

834

Equity in net earnings (loss) of affiliates

 

134

 

182

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

 

17

 

(20

)

Interest expense

 

(109

)

 

(115

)

Refinancing expense

 

 

(4

)

Interest income

 

6

 

6

Dividend income - equity investments

 

126

 

113

Gain (loss) on sale of investments in affiliates

 

1,408

 

Other income (expense), net

 

5

 

(8

)

Earnings (loss) from continuing operations before tax

 

2,251

 

988

Income tax (provision) benefit

 

(247

)

 

(124

)

Earnings (loss) from continuing operations

 

2,004

 

864

Earnings (loss) from operation of discontinued operations

 

(14

)

 

(8

)

Income tax (provision) benefit from discontinued operations

 

2

 

2

Earnings (loss) from discontinued operations

 

(12

)

 

(6

)

Net earnings (loss)

 

1,992

 

858

Net (earnings) loss attributable to noncontrolling interests

 

(7

)

 

(6

)

Net earnings (loss) attributable to Celanese Corporation

 

1,985

 

852

Amounts attributable to Celanese Corporation

 

 

Earnings (loss) from continuing operations

 

1,997

 

858

Earnings (loss) from discontinued operations

 

(12

)

 

(6

)

Net earnings (loss)

 

1,985

 

852

Earnings (loss) per common share - basic

 

 

Continuing operations

 

16.95

 

6.93

Discontinued operations

 

(0.10

)

 

(0.05

)

Net earnings (loss) - basic

 

16.85

 

6.88

Earnings (loss) per common share - diluted

 

 

Continuing operations

 

16.85

 

6.89

Discontinued operations

 

(0.10

)

 

(0.05

)

Net earnings (loss) - diluted

 

16.75

 

6.84

Weighted average shares (in millions)

 

 

Basic

 

117.8

 

123.9

Diluted

 

118.5

 

124.7

Consolidated Balance Sheets - Unaudited

 

As of December 31,

 

2020

2019

 

(In $ millions)

ASSETS

 

 

Current Assets

 

 

Cash and cash equivalents

 

955

 

463

Trade receivables - third party and affiliates, net

 

792

 

850

Non-trade receivables, net

 

450

 

331

Inventories

 

978

 

1,038

Marketable securities

 

533

 

40

Other assets

 

55

 

43

Total current assets

 

3,763

 

2,765

Investments in affiliates

 

820

 

975

Property, plant and equipment, net

 

3,939

 

3,713

Operating lease right-of-use assets

 

232

 

203

Deferred income taxes

 

259

 

96

Other assets

 

411

 

338

Goodwill

 

1,166

 

1,074

Intangible assets, net

 

319

 

312

Total assets

 

10,909

 

9,476

LIABILITIES AND EQUITY

 

 

Current Liabilities

 

 

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

 

496

 

496

Trade payables - third party and affiliates

 

797

 

780

Other liabilities

 

680

 

461

Income taxes payable

 

 

17

Total current liabilities

 

1,973

 

1,754

Long-term debt, net of unamortized deferred financing costs

 

3,227

 

3,409

Deferred income taxes

 

509

 

257

Uncertain tax positions

 

240

 

165

Benefit obligations

 

643

 

589

Operating lease liabilities

 

208

 

181

Other liabilities

 

214

 

223

Commitments and Contingencies

 

 

Stockholders' Equity

 

 

Treasury stock, at cost

 

(4,494

)

 

(3,846

)

Additional paid-in capital

 

257

 

254

Retained earnings

 

8,091

 

6,399

Accumulated other comprehensive income (loss), net

 

(328

)

 

(300

)

Total Celanese Corporation stockholders' equity

 

3,526

 

2,507

Noncontrolling interests

 

369

 

391

Total equity

 

3,895

 

2,898

Total liabilities and equity

 

10,909

 

9,476

Non-US GAAP Financial Measures and Supplemental Information

January 28, 2021

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 three business segments, Engineered Materials, Acetate Tow and 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 stockholders' 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 capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway"). 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.
  • 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 stockholders' 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 stockholders 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 stockholders' interests are shown as NCI. Beginning in 2014, this includes Fairway for which the Company's ownership percentage is 50%. 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

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

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions)

Net earnings (loss) attributable to Celanese Corporation

1,985

1,453

207

107

218

852

43

263

209

337

(Earnings) loss from discontinued operations

12

2

3

7

6

(1

)

5

1

1

Interest income

(6

)

(2

)

(1

)

(1

)

(2

)

(6

)

(2

)

(1

)

(2

)

(1

)

Interest expense

109

26

28

27

28

115

28

27

29

31

Refinancing expense

4

4

Income tax provision (benefit)

247

117

30

35

65

124

(3

)

53

28

46

Certain Items attributable to Celanese Corporation (Table 8)

(1,216

)

(1,294

)

24

28

26

381

238

29

107

7

Adjusted EBIT

1,131

300

290

199

342

1,476

303

376

376

421

Depreciation and amortization expense(1)

344

87

88

86

83

329

84

82

82

81

Operating EBITDA

1,475

387

378

285

425

1,805

387

458

458

502

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions)

Engineered Materials

5

2

1

2

4

2

1

1

Acetate Tow

9

2

5

2

Acetyl Chain

1

1

10

3

6

1

Other Activities(2)

Accelerated depreciation and amortization expense

6

2

1

1

2

23

7

12

2

2

Depreciation and amortization expense(1)

344

87

88

86

83

329

84

82

82

81

Total depreciation and amortization expense

350

89

89

87

85

352

91

94

84

83

______________________________

(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, the 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

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions, except percentages)

Operating Profit (Loss) / Operating Margin

Engineered Materials

235

11.3

%

62

10.8

%

84

16.0

%

(13

)

(3.1

)

%

102

18.1

%

446

18.7

%

88

16.3

%

111

18.8

%

103

17.4

%

144

21.7

%

Acetate Tow

118

22.7

%

30

22.4

%

30

23.3

%

31

24.4

%

27

20.9

%

52

8.2

%

22

14.9

%

34

21.5

%

(44

)

(26.8

)

%

40

24.1

%

Acetyl Chain(1)

563

17.9

%

186

20.4

%

121

15.6

%

121

18.3

%

135

16.9

%

678

20.0

%

108

14.0

%

180

20.8

%

188

21.7

%

202

22.7

%

Other Activities(2)

(252

)

(75

)

(51

)

(56

)

(70

)

(342

)

(150

)

(65

)

(61

)

(66

)

Total

664

11.7

%

203

12.8

%

184

13.0

%

83

7.0

%

194

13.3

%

834

13.2

%

68

4.7

%

260

16.4

%

186

11.7

%

320

19.0

%

Less: Net Earnings (Loss) Attributable to NCI(1)

7

1

2

2

2

6

2

2

1

1

Operating Profit (Loss) Attributable to Celanese Corporation

657

11.6

%

202

12.7

%

182

12.9

%

81

6.8

%

192

13.2

%

828

13.1

%

66

4.6

%

258

16.3

%

185

11.6

%

319

18.9

%

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

Engineered Materials

235

11.3

%

62

10.8

%

84

16.0

%

(13

)

(3.1

)

%

102

18.1

%

446

18.7

%

88

16.3

%

111

18.8

%

103

17.4

%

144

21.7

%

Acetate Tow

118

22.7

%

30

22.4

%

30

23.3

%

31

24.4

%

27

20.9

%

52

8.2

%

22

14.9

%

34

21.5

%

(44

)

(26.8

)

%

40

24.1

%

Acetyl Chain(1)

556

17.7

%

185

20.3

%

119

15.3

%

119

18.0

%

133

16.6

%

672

19.8

%

106

13.7

%

178

20.5

%

187

21.6

%

201

22.6

%

Other Activities(2)

(252

)

(75

)

(51

)

(56

)

(70

)

(342

)

(150

)

(65

)

(61

)

(66

)

Total

657

11.6

%

202

12.7

%

182

12.9

%

81

6.8

%

192

13.2

%

828

13.1

%

66

4.6

%

258

16.3

%

185

11.6

%

319

18.9

%

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

Engineered Materials

115

15

21

26

53

168

45

41

36

46

Acetate Tow

126

29

28

32

37

112

24

27

29

32

Acetyl Chain

5

2

2

1

5

1

2

1

1

Other Activities(2)

19

4

5

5

5

2

2

1

(1

)

Total

265

50

56

63

96

287

70

72

67

78

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

Engineered Materials

1

1

Acetate Tow

Acetyl Chain

Other Activities(2)

16

(67

)

28

27

28

(20

)

(71

)

17

17

17

Total

17

(66

)

28

27

28

(20

)

(71

)

17

17

17

Gain (Loss) on Sale of Investments in Affiliates

Engineered Materials

1,408

1,408

Acetate Tow

Acetyl Chain

Other Activities(2)

Total

1,408

1,408

Certain Items Attributable to Celanese Corporation (Table 8)

Engineered Materials

(1,356

)

(1,404

)

11

27

10

7

3

2

9

(7

)

Acetate Tow

5

1

1

3

104

8

10

86

Acetyl Chain

7

5

(3

)

5

50

37

11

1

1

Other Activities(2)

128

110

7

3

8

220

190

6

11

13

Total

(1,216

)

(1,294

)

24

28

26

381

238

29

107

7

______________________________

(1)

Net earnings (loss) attributable to NCI is included within the Acetyl Chain segment.

(2)

Other Activities includes corporate SG&A expenses, the 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.)

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions, except percentages)

Adjusted EBIT / Adjusted EBIT Margin

Engineered Materials

403

19.4

%

82

14.3

%

116

22.1

%

40

9.5

%

165

29.3

%

621

26.0

%

136

25.2

%

154

26.1

%

148

25.0

%

183

27.6

%

Acetate Tow

249

48.0

%

59

44.0

%

59

45.7

%

64

50.4

%

67

51.9

%

268

42.1

%

54

36.5

%

71

44.9

%

71

43.3

%

72

43.4

%

Acetyl Chain

568

18.0

%

187

20.5

%

126

16.2

%

116

17.5

%

139

17.4

%

727

21.4

%

144

18.7

%

191

22.0

%

189

21.8

%

203

22.8

%

Other Activities(2)

(89

)

(28

)

(11

)

(21

)

(29

)

(140

)

(31

)

(40

)

(32

)

(37

)

Total

1,131

20.0

%

300

18.9

%

290

20.6

%

199

16.7

%

342

23.4

%

1,476

23.4

%

303

21.2

%

376

23.7

%

376

23.6

%

421

25.0

%

Depreciation and Amortization Expense(1)

Engineered Materials

129

32

33

32

32

127

33

32

31

31

Acetate Tow

36

10

9

9

8

36

8

9

9

10

Acetyl Chain

162

41

41

41

39

151

39

37

38

37

Other Activities(2)

17

4

5

4

4

15

4

4

4

3

Total

344

87

88

86

83

329

84

82

82

81

Operating EBITDA / Operating EBITDA Margin

Engineered Materials

532

25.6

%

114

19.9

%

149

28.3

%

72

17.1

%

197

35.0

%

748

31.3

%

169

31.4

%

186

31.5

%

179

30.2

%

214

32.3

%

Acetate Tow

285

54.9

%

69

51.5

%

68

52.7

%

73

57.5

%

75

58.1

%

304

47.8

%

62

41.9

%

80

50.6

%

80

48.8

%

82

49.4

%

Acetyl Chain

730

23.2

%

228

25.1

%

167

21.5

%

157

23.7

%

178

22.3

%

878

25.9

%

183

23.7

%

228

26.3

%

227

26.2

%

240

27.0

%

Other Activities(2)

(72

)

(24

)

(6

)

(17

)

(25

)

(125

)

(27

)

(36

)

(28

)

(34

)

Total

1,475

26.1

%

387

24.3

%

378

26.8

%

285

23.9

%

425

29.1

%

1,805

28.7

%

387

27.0

%

458

28.9

%

458

28.8

%

502

29.8

%

______________________________

(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, the 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

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

per
share

per
share

per
share

per
share

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

1,997

16.85

1,453

12.50

209

1.76

110

0.93

225

1.88

858

6.89

42

0.35

268

2.17

210

1.67

338

2.64

Income tax provision (benefit)

247

117

30

35

65

124

(3

)

53

28

46

Earnings (loss) from continuing operations before tax

2,244

1,570

239

145

290

982

39

321

238

384

Certain Items attributable to Celanese Corporation (Table 8)

(1,216

)

(1,294

)

24

28

26

381

238

29

107

7

Refinancing and related expenses

4

4

Adjusted earnings (loss) from continuing operations before tax

1,028

276

263

173

316

1,367

277

350

349

391

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

(123

)

(33

)

(32

)

(18

)

(41

)

(178

)

(36

)

(38

)

(49

)

(55

)

Adjusted earnings (loss) from continuing operations(2)

905

7.64

243

2.09

231

1.95

155

1.30

275

2.29

1,189

9.53

241

1.99

312

2.53

300

2.38

336

2.62

Diluted shares (in millions)(3)

Weighted average shares outstanding

117.8

115.7

118.0

118.3

119.3

123.9

120.3

122.7

125.3

127.5

Incremental shares attributable to equity awards

0.7

0.6

0.6

0.5

0.6

0.8

0.6

0.6

0.5

0.7

Total diluted shares

118.5

116.3

118.6

118.8

119.9

124.7

120.9

123.3

125.8

128.2

______________________________

(1)

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

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In percentages)

Adjusted effective tax rate

12

12

12

10

13

13

13

11

14

14

(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)

Q4 '20 & 2020

12.4

6.5

Q4 '19 & 2019

16.7

6.5

(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

 

Actual

2020

2019

(In percentages)

US GAAP annual effective tax rate

11

13

Discrete quarterly recognition of GAAP items(1)

12

Tax impact of other charges and adjustments(2)

(9

)

Utilization of foreign tax credits

(3

)

(3

)

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

3

Other(4)

1

Adjusted tax rate

12

13

______________________________

Note: As part of the year-end reconciliation, we updated 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)

Tax impacts related to full-year forecasted tax opportunities and related costs.

Table 4

Net Sales by Segment - Unaudited

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions)

Engineered Materials

2,081

572

526

420

563

2,386

539

591

593

663

Acetate Tow

519

134

129

127

129

636

148

158

164

166

Acetyl Chain

3,147

910

776

662

799

3,392

771

867

865

889

Intersegment eliminations(1)

(92

)

(25

)

(20

)

(16

)

(31

)

(117

)

(26

)

(30

)

(30

)

(31

)

Net sales

5,655

1,591

1,411

1,193

1,460

6,297

1,432

1,586

1,592

1,687

______________________________

(1)

Includes intersegment sales primarily related to the Acetyl Chain.

 

Table 4a

Factors Affecting Segment Net Sales Sequentially - Unaudited

 
 

Three Months Ended December 31, 2020 Compared to Three Months Ended September 30, 2020

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

7

2

9

Acetate Tow

4

(1

)

3

Acetyl Chain

6

10

1

17

Total Company

7

5

1

13

Three Months Ended December 31, 2019 Compared to Three Months Ended September 30, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(9

)

(9

)

Acetate Tow

(6

)

(6

)

Acetyl Chain

(11

)

(11

)

Total Company

(10

)

(10

)

Three Months Ended September 30, 2020 Compared to Three Months Ended June 30, 2020

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

27

(6

)

4

25

Acetate Tow

1

1

1

3

Acetyl Chain

18

(2

)

1

17

Total Company

20

(3

)

2

(1

)

18

Three Months Ended September 30, 2019 Compared to Three Months Ended June 30, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

2

(2

)

(1

)

(1

)

Acetate Tow

(2

)

(1

)

(3

)

Acetyl Chain

1

(1

)

Total Company

2

(1

)

(1

)

Three Months Ended June 30, 2020 Compared to Three Months Ended March 31, 2020

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(25

)

(25

)

Acetate Tow

(3

)

1

(2

)

Acetyl Chain

(6

)

(11

)

(17

)

(1

)

Total Company

(13

)

(6

)

1

(18

)

Three Months Ended June 30, 2019 Compared to Three Months Ended March 31, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(7

)

(3

)

(1

)

(11

)

Acetate Tow

(1

)

(1

)

Acetyl Chain

2

(4

)

(1

)

(3

)

Total Company

(2

)

(3

)

(1

)

(6

)

Three Months March 31, 2020 Compared to Three Months Ended December 31, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

4

4

Acetate Tow

(9

)

(4

)

(13

)

Acetyl Chain

5

(1

)

4

Total Company

3

(1

)

2

Three Months Ended March 31, 2019 Compared to Three Months Ended December 31, 2018

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

5

2

7

(2

)

Acetate Tow

1

2

3

Acetyl Chain

5

(10

)

(5

)

Total Company

5

(5

)

______________________________

(1)

2020 includes the effect of the acquisition of the Elotex® brand.

(2)

2019 includes the effect of the acquisition of Next Polymers Ltd.

 

Table 4b

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 
 

Three Months Ended December 31, 2020 Compared to Three Months Ended December 31, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

6

(4

)

4

6

Acetate Tow

(7

)

(3

)

1

(9

)

Acetyl Chain

19

(3

)

2

18

Total Company

12

(4

)

3

11

Three Months Ended December 31, 2019 Compared to Three Months Ended December 31, 2018

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(9

)

(3

)

(1

)

(13

)

Acetate Tow

(8

)

(8

)

Acetyl Chain

(4

)

(13

)

(1

)

(18

)

Total Company

(6

)

(8

)

(1

)

(15

)

Three Months Ended September 30, 2020 Compared to Three Months Ended September 30, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(10

)

(3

)

2

(11

)

Acetate Tow

(15

)

(3

)

(18

)

Acetyl Chain

(1

)

(11

)

1

(11

)

Total Company

(6

)

(7

)

1

1

(11

)

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(4

)

(2

)

(2

)

(8

)

Acetate Tow

Acetyl Chain

6

(18

)

(2

)

(14

)

Total Company

2

(11

)

(2

)

1

(10

)

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(27

)

(1

)

(1

)

(29

)

Acetate Tow

(18

)

(5

)

(23

)

Acetyl Chain

(14

)

(8

)

(1

)

(23

)

Total Company

(20

)

(5

)

(1

)

1

(25

)

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(8

)

(3

)

(11

)

Acetate Tow

1

1

(1

)

1

Acetyl Chain

(1

)

(14

)

(3

)

(18

)

Total Company

(3

)

(8

)

(3

)

(14

)

Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(9

)

(5

)

(1

)

(15

)

Acetate Tow

(17

)

(5

)

(22

)

Acetyl Chain

(3

)

(7

)

(1

)

1

(10

)

Total Company

(7

)

(6

)

(1

)

1

(13

)

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(3

)

7

(4

)

Acetate Tow

(1

)

(1

)

Acetyl Chain

(4

)

(8

)

(3

)

(15

)

Total Company

(3

)

(2

)

(4

)

(9

)

 

Table 4c

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 
 

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(11

)

(3

)

1

(13

)

Acetate Tow

(14

)

(4

)

(18

)

Acetyl Chain

(8

)

1

(7

)

Total Company

(5

)

(6

)

1

(10

)

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

 

Volume

Price

Currency

Other

Total

(In percentages)

Engineered Materials

(5

)

(3

)

(8

)

Acetate Tow

(2

)

(2

)

Acetyl Chain

(1

)

(13

)

(2

)

(16

)

Total Company

(3

)

(7

)

(2

)

(12

)

 

Table 5

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

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions, except percentages)

Net cash provided by (used in) investing activities

592

979

(78

)

(181

)

(128

)

(493

)

(168

)

(82

)

(66

)

(177

)

Net cash provided by (used in) financing activities

(1,471

)

(933

)

(290

)

(232

)

(16

)

(935

)

(199

)

(299

)

(307

)

(130

)

Net cash provided by (used in) operating activities

1,343

274

431

379

259

1,454

326

397

424

307

Capital expenditures on property, plant and equipment

(364

)

(85

)

(72

)

(88

)

(119

)

(370

)

(144

)

(82

)

(65

)

(79

)

Distributions to NCI

(29

)

(8

)

(8

)

(8

)

(5

)

(10

)

(3

)

(3

)

(4

)

Free cash flow(1)(2)

950

181

351

283

135

1,074

179

315

356

224

Net sales

5,655

1,591

1,411

1,193

1,460

6,297

1,432

1,586

1,592

1,687

Free cash flow as % of Net sales

16.8

%

11.4

%

24.9

%

23.7

%

9.2

%

17.1

%

12.5

%

19.9

%

22.4

%

13.3

%

______________________________

(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 capital contributions or distributions to Mitsui related to our joint venture, Fairway.

(2)

Excludes required debt service and finance lease payments of $26 million and $24 million for the years ended December 31, 2020 and 2019, respectively.

 

Table 6

Cash Dividends Received - Unaudited

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions)

Dividends from equity method investments

147

36

6

59

46

168

42

15

41

70

Dividends from equity investments without readily determinable fair values

126

28

29

32

37

113

24

27

30

32

Total

273

64

35

91

83

281

66

42

71

102

 

Table 7

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

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

(In $ millions)

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

496

496

958

1,045

749

496

496

368

319

743

Long-term debt, net of unamortized deferred financing costs

3,227

3,227

3,140

2,989

3,356

3,409

3,409

3,359

3,444

2,933

Total debt

3,723

3,723

4,098

4,034

4,105

3,905

3,905

3,727

3,763

3,676

Cash and cash equivalents

(955

)

(955

)

(615

)

(539

)

(570

)

(463

)

(463

)

(497

)

(491

)

(441

)

Net debt

2,768

2,768

3,483

3,495

3,535

3,442

3,442

3,230

3,272

3,235

 

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:

 

2020

Q4 '20

Q3 '20

Q2 '20

Q1 '20

2019

Q4 '19

Q3 '19

Q2 '19

Q1 '19

Income Statement Classification

(In $ millions)

Plant/office closures

10

7

4

(4

)

3

26

12

9

2

3

Cost of sales / SG&A / Other (charges) gains, net / Gain (loss) on disposition of businesses and assets, net

Asset impairments

31

2

25

4

94

(1)

2

9

83

Cost of sales / Other (charges) gains, net

Clear Lake incident

4

4

34

32

2

Cost of sales

COVID-19

5

2

1

1

1

Cost of sales / SG&A

Mergers, acquisitions and dispositions

22

5

7

3

7

12

3

2

4

3

Cost of sales / SG&A

Actuarial (gain) loss on pension and postretirement plans

95

95

88

88

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

Restructuring

25

5

11

2

7

27

6

7

15

(1

)

SG&A / Other (charges) gains, net / Non-operating pension and other postretirement employee benefit (expense) income

European Commission investigation

2

2

89

89

Other (charges) gains, net

Commercial disputes

(1

)

(1

)

10

6

2

2

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

(Gain) loss on sale of investments in affiliates

(1,408

)

(1,408

)

Gain (loss) on sale of investments in affiliates

Other

(1

)

(1

)

1

1

SG&A / Gain (loss) on disposition of businesses and assets, net

Certain Items attributable to Celanese Corporation

(1,216

)

(1,294

)

24

28

26

381

238

29

107

7

______________________________

(1)

Includes $5 million of asset impairments in 2019 related to the Clear Lake incident.

 

Table 9

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

 

2020

2019

(In $ millions,
except
percentages)

(In $ millions,
except
percentages)

Net earnings (loss) attributable to Celanese Corporation

1,985

852

Adjusted EBIT (Table 1)

1,131

1,476

Adjusted effective tax rate (Table 3a)

12

%

13

%

Adjusted EBIT tax effected

995

1,284

2020

2019

Average

2019

2018

Average

(In $ millions, except percentages)

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

496

496

496

496

561

529

Long-term debt, net of unamortized deferred financing costs

3,227

3,409

3,318

3,409

2,970

3,190

Celanese Corporation stockholders' equity

3,526

2,507

3,017

2,507

2,984

2,746

Invested capital

6,831

6,465

Return on invested capital (adjusted)

14.6

%

19.9

%

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

29.1

%

13.2

%

Contacts:

Investor Relations
Brandon Ayache
Phone: +1 972 443 8509
brandon.ayache@celanese.com

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