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Celanese Corporation Reports First Quarter 2023 Earnings

Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported first quarter 2023 GAAP diluted earnings per share of $0.86 and adjusted earnings per share of $2.01. The Company generated net sales of $2.9 billion in the quarter, an increase of 22 percent over the prior quarter. Net sales reflected a sequential volume increase of 19 percent over the prior quarter that was partially offset by a pricing decrease of 4 percent. Volume increased due to an additional month of sales from the Mobility & Materials (M&M) acquisition as well as demand recovery in Europe and Asia as the quarter progressed. The Company exercised its commercial flexibility and global supply chain to capture improved demand and to offset the impact of sequentially lower variable margin across many products, due to moderation in input costs that was more than offset by pricing declines. As a result of sequentially higher contributions from Engineered Materials and the Acetyl Chain, the Company reported first quarter consolidated operating profit of $251 million, adjusted EBIT of $424 million, and operating EBITDA of $596 million. In the first full quarter under its ownership, Celanese delivered a significant sequential increase in the M&M earnings contribution due primarily to higher sequential volume and approximately $10 million in savings in the quarter from cost synergies.

The difference between GAAP diluted earnings per share and adjusted earnings per share in the first quarter was primarily due to $99 million in M&A-related costs, predominantly related to the M&M acquisition, and $26 million in exit and shutdown costs.

"Our team delivered a clear upward inflection in our combined Engineered Materials and Acetyl Chain earnings to start 2023 with sequential increases in operating profit and operating EBITDA of 70 percent and 34 percent, respectively," said Lori Ryerkerk, chair and chief executive officer. "We successfully executed on our controllable actions across the quarter to drive synergies, productivity, and base business improvement, particularly in M&M. Additionally, we captured a significant share of elevated demand in March, which allowed us to exceed our original earnings expectations for the quarter."

First Quarter 2023 Financial Highlights:

 

Three Months Ended

 

March 31,

2023

 

December 31,

2022

 

March 31,

2022

 

(unaudited)

 

(In $ millions, except per share data)

Net Sales

 

 

 

 

 

Engineered Materials

 

1,630

 

 

 

1,237

 

 

 

910

 

Acetyl Chain

 

1,250

 

 

 

1,135

 

 

 

1,652

 

Intersegment Eliminations

 

(27

)

 

 

(24

)

 

 

(24

)

Total

 

2,853

 

 

 

2,348

 

 

 

2,538

 

 

 

 

 

 

 

Operating Profit (Loss)

 

 

 

 

 

Engineered Materials

 

112

 

 

 

25

 

 

 

124

 

Acetyl Chain

 

278

 

 

 

204

 

 

 

503

 

Other Activities

 

(139

)

 

 

(173

)

 

 

(96

)

Total

 

251

 

 

 

56

 

 

 

531

 

 

 

 

 

 

 

Net Earnings (Loss)

 

93

 

 

 

769

 

 

 

504

 

 

 

 

 

 

 

Adjusted EBIT(1)

 

 

 

 

 

Engineered Materials

 

215

 

 

 

138

 

 

 

211

 

Acetyl Chain

 

316

 

 

 

242

 

 

 

543

 

Other Activities

 

(107

)

 

 

(78

)

 

 

(41

)

Total

 

424

 

 

 

302

 

 

 

713

 

 

 

 

 

 

 

Equity Earnings and Dividend Income, Other Income (Expense)

 

 

 

 

 

Engineered Materials

 

10

 

 

 

35

 

 

 

49

 

Acetyl Chain

 

34

 

 

 

30

 

 

 

40

 

 

 

 

 

 

 

Operating EBITDA(1)

 

596

 

 

 

453

 

 

 

813

 

Diluted EPS - continuing operations

$

0.86

 

 

$

7.03

 

 

$

4.61

 

Diluted EPS - total

$

0.83

 

 

$

7.03

 

 

$

4.61

 

Adjusted EPS(1)

$

2.01

 

 

$

1.44

 

 

$

5.54

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

(178

)

 

 

(10,713

)

 

 

(149

)

Net cash provided by (used in) financing activities

 

(69

)

 

 

1,944

 

 

 

(95

)

Net cash provided by (used in) operating activities

 

(96

)

 

 

541

 

 

 

316

 

Free cash flow(1)

 

(261

)

 

 

395

 

 

 

175

 

____________________________

(1)

See "Non-US GAAP Financial Measures" below.

Recent Highlights:

  • Announced the signing of a term sheet to form a standalone Food Ingredients joint venture (JV) in which Celanese will contribute its Food Ingredients business and Mitsui will acquire a 70 percent stake. The transaction is expected to close in the second half and cash proceeds will be used to pay down debt.
  • Expanded the portfolio of Celanese sustainable products to include bio-based acetic acid, VAM, amines, acetate esters, and anhydrides designed to help customers in developing more sustainable product offerings. These products will be designated as ECO-B, consistent with bio-based products previously introduced in Engineered Materials.
  • Completed the mechanical construction of the new 1.3 million ton acetic acid production unit at Clear Lake, Texas. The commissioning and start-up processes are expected to be complete in the third quarter.
  • Announced initiatives to advance the development of Celanese's VitalDose® EVA drug delivery platform including a research agreement with Johns Hopkins University on sustained drug delivery to the suprachoroidal space in the eye and a collaboration with Alessa Therapeutics for the advancement of oncology treatments.

First Quarter 2023 Business Segment Overview

Acetyl Chain

The Acetyl Chain delivered first quarter net sales of $1.3 billion, a 10 percent increase from the prior quarter due to a 10 percent increase in volume. While demand for acetyls in Europe and Asia improved significantly over the prior quarter, volume in the first quarter lagged the same quarter of last year by 9 percent and was insufficient to support pricing expansion. Sequential pricing across the business decreased by 2 percent as pricing moderation across most products was partially offset by a reset in the pricing for acetate flake and tow as part of the strategic overhaul of those products. In response to challenging pricing dynamics, particularly in China, the business exercised its unique product and geographic optionality and supply chain capabilities to capture demand recovery. As a result of these actions, the business delivered improved earnings performance and offset sequential contraction in the pricing spread over raw materials across most products. The Acetyl Chain delivered first quarter operating profit of $278 million, adjusted EBIT of $316 million, and operating EBITDA of $370 million at margins of 22, 25, and 30 percent, respectively. An approximately $75 million sequential increase in each of these profitability metrics resulted in first quarter earnings consistent with the foundational earnings power of this business, despite demand and pricing dynamics for many products and regions that remained challenging. The Acetyl Chain continues to take steps to elevate its foundational earnings, including the mechanical completion of the new acetic acid production unit at Clear Lake, which is expected to lift earnings by an additional approximately $100 million annually starting in 2024.

Engineered Materials

Engineered Materials reported first quarter net sales of $1.6 billion, a 32 percent increase from the prior quarter. Volume expanded by 34 percent due to an additional month of M&M contributions and sequential growth across most end-markets, with the exception of medical implants. Sequential volume in auto outperformed the change in industry build rates across all three regions due to contributions from project pipeline model wins realized in 2022. Pricing decreased by 4 percent due to a change in product mix, a decrease in raw material and energy costs, and challenging competitive dynamics in Europe. Engineered Materials delivered first quarter operating profit of $112 million, adjusted EBIT of $215 million, and operating EBITDA of $327 million at margins of 7, 13, and 20 percent, respectively. The M&M contribution to EM earnings increased sequentially through volume recovery and approximately $10 million in synergies delivered across the quarter. Affiliate earnings were $11 million for the quarter, a sequential decrease of $20 million.

Cash Flow and Tax

Celanese reported first quarter operating cash flow of $(96) million and free cash flow of $(261) million which included an increase in working capital due to strong March sales, cash interest expense of $281 million, and cash capital expenditures of $164 million. The Company anticipates a significant increase in second quarter free cash flow due to improved business performance as well as the timing of these cash items. Celanese returned $76 million in cash to shareholders via dividends in the quarter.

The effective U.S. GAAP income tax rate was 21 percent for the first quarter compared to 18 percent for the same quarter in 2022. The higher effective rate was primarily due to increases in valuation allowances on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period, partially offset by increased earnings in low-taxed jurisdictions. The effective tax rate for adjusted earnings was 12 percent based on expected jurisdictional earnings mix for the full year and consideration of other non-recurring U.S. GAAP items.

Outlook

"While first quarter demand meaningfully recovered from exceptionally poor conditions in the fourth quarter, we still saw first quarter volume, when excluding M&M contributions, that was significantly lower year over year," said Lori Ryerkerk. "So far across April and May, underlying demand improvement over March has been immaterial and not yet substantive enough to support any pricing expansion. In this environment, our teams are working to opportunistically deliver modestly higher volume in the second quarter, due primarily to a stronger start than the prior quarter, and to preserve our pricing spreads over raw materials. We expect that sequential earnings growth in our businesses, largely due to controllable actions, will deliver second quarter adjusted earnings per share of approximately $2.50, inclusive of approximately $0.30 per share of M&M transaction amortization. We see potential to exceed $2.50 in earnings per share if demand recovers substantively enough to support material pricing recovery within the quarter, particularly in the Acetyl Chain."

A reconciliation of forecasted adjusted earnings per share to U.S. GAAP diluted earnings per share is not available 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 first quarter will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library on May 9, 2023. 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 13,300 employees worldwide and had 2022 net sales of $9.7 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com.

Forward-Looking Statements

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

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

Non-GAAP Financial Measures

Presentation

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

Use of Non-US GAAP Financial Information

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

Definitions of Non-US GAAP Financial Measures

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



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

  • Free cash flow is a liquidity measure used by the Company and is defined by the Company as 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 May 9, 2023 and also available on our website at investors.celanese.com under Financial Information/Financial Document Library.

Results Unaudited

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

Supplemental Information

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

Consolidated Statements of Operations - Unaudited

 

 

Three Months Ended

 

March 31,

2023

 

December 31,

2022

 

March 31,

2022

 

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

Net sales

2,853

 

 

2,348

 

 

2,538

 

Cost of sales

(2,222

)

 

(1,964

)

 

(1,793

)

Gross profit

631

 

 

384

 

 

745

 

Selling, general and administrative expenses

(285

)

 

(269

)

 

(174

)

Amortization of intangible assets

(41

)

 

(30

)

 

(11

)

Research and development expenses

(42

)

 

(37

)

 

(24

)

Other (charges) gains, net

(23

)

 

7

 

 

(1

)

Foreign exchange gain (loss), net

6

 

 

3

 

 

(1

)

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

5

 

 

(2

)

 

(3

)

Operating profit (loss)

251

 

 

56

 

 

531

 

Equity in net earnings (loss) of affiliates

15

 

 

31

 

 

56

 

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

1

 

 

(57

)

 

24

 

Interest expense

(182

)

 

(168

)

 

(35

)

Interest income

8

 

 

33

 

 

1

 

Dividend income - equity investments

34

 

 

30

 

 

37

 

Other income (expense), net

(6

)

 

5

 

 

2

 

Earnings (loss) from continuing operations before tax

121

 

 

(70

)

 

616

 

Income tax (provision) benefit

(25

)

 

840

 

 

(112

)

Earnings (loss) from continuing operations

96

 

 

770

 

 

504

 

Earnings (loss) from operation of discontinued operations

(3

)

 

(1

)

 

 

Income tax (provision) benefit from discontinued operations

 

 

 

 

 

Earnings (loss) from discontinued operations

(3

)

 

(1

)

 

 

Net earnings (loss)

93

 

 

769

 

 

504

 

Net (earnings) loss attributable to noncontrolling interests

(2

)

 

(2

)

 

(2

)

Net earnings (loss) attributable to Celanese Corporation

91

 

 

767

 

 

502

 

Amounts attributable to Celanese Corporation

 

 

 

 

 

Earnings (loss) from continuing operations

94

 

 

768

 

 

502

 

Earnings (loss) from discontinued operations

(3

)

 

(1

)

 

 

Net earnings (loss)

91

 

 

767

 

 

502

 

Earnings (loss) per common share - basic

 

 

 

 

 

Continuing operations

0.87

 

 

7.08

 

 

4.64

 

Discontinued operations

(0.03

)

 

(0.01

)

 

 

Net earnings (loss) - basic

0.84

 

 

7.07

 

 

4.64

 

Earnings (loss) per common share - diluted

 

 

 

 

 

Continuing operations

0.86

 

 

7.03

 

 

4.61

 

Discontinued operations

(0.03

)

 

 

 

 

Net earnings (loss) - diluted

0.83

 

 

7.03

 

 

4.61

 

Weighted average shares (in millions)

 

 

 

 

 

Basic

108.6

 

 

108.5

 

 

108.2

 

Diluted

109.2

 

 

109.2

 

 

108.9

 

Consolidated Balance Sheets - Unaudited

 

 

As of

March 31,

2023

 

As of

December 31,

2022

 

 

(In $ millions)

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

1,167

 

 

1,508

 

Trade receivables - third party and affiliates, net

1,606

 

 

1,379

 

Non-trade receivables, net

707

 

 

675

 

Inventories

2,749

 

 

2,808

 

Other assets

219

 

 

241

 

Total current assets

6,448

 

 

6,611

 

Investments in affiliates

1,049

 

 

1,062

 

Property, plant and equipment, net

5,588

 

 

5,584

 

Operating lease right-of-use assets

414

 

 

413

 

Deferred income taxes

813

 

 

808

 

Other assets

553

 

 

547

 

Goodwill

7,139

 

 

7,142

 

Intangible assets, net

4,086

 

 

4,105

 

Total assets

26,090

 

 

26,272

 

LIABILITIES AND EQUITY

 

 

 

Current Liabilities

 

 

 

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

1,386

 

 

1,306

 

Trade payables - third party and affiliates

1,445

 

 

1,518

 

Other liabilities

1,014

 

 

1,201

 

Income taxes payable

6

 

 

43

 

Total current liabilities

3,851

 

 

4,068

 

Long-term debt, net of unamortized deferred financing costs

13,396

 

 

13,373

 

Deferred income taxes

1,223

 

 

1,242

 

Uncertain tax positions

295

 

 

322

 

Benefit obligations

411

 

 

411

 

Operating lease liabilities

359

 

 

364

 

Other liabilities

425

 

 

387

 

Commitments and Contingencies

 

 

 

Stockholders' Equity

 

 

 

Treasury stock, at cost

(5,491

)

 

(5,491

)

Additional paid-in capital

365

 

 

372

 

Retained earnings

11,289

 

 

11,274

 

Accumulated other comprehensive income (loss), net

(502

)

 

(518

)

Total Celanese Corporation stockholders' equity

5,661

 

 

5,637

 

Noncontrolling interests

469

 

 

468

 

Total equity

6,130

 

 

6,105

 

Total liabilities and equity

26,090

 

 

26,272

 

Non-US GAAP Financial Measures and Supplemental Information

May 9, 2023

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

Purpose

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

Presentation

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

Use of Non-US GAAP Financial Measures

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

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

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

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

Specific Measures Used

This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation 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 contributions from or distributions to our NCI joint ventures. We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations. Free cash flow is not a measure of cash available for discretionary expenditures since the Company has certain debt service and finance lease payments that are not deducted from that measure.
  • 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. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.

Results Unaudited

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

Table 1

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

 

 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions)

Net earnings (loss) attributable to Celanese Corporation

91

 

 

1,894

 

 

767

 

 

191

 

 

434

 

 

502

 

(Earnings) loss from discontinued operations

3

 

 

8

 

 

1

 

 

1

 

 

6

 

 

 

Interest income

(8

)

 

(69

)

 

(33

)

 

(34

)

 

(1

)

 

(1

)

Interest expense

182

 

 

405

 

 

168

 

 

154

 

 

48

 

 

35

 

Income tax provision (benefit)

25

 

 

(489

)

 

(840

)

 

127

 

 

112

 

 

112

 

Certain Items attributable to Celanese Corporation (Table 8)

131

 

 

422

 

 

239

 

 

71

 

 

47

 

 

65

 

Adjusted EBIT

424

 

 

2,171

 

 

302

 

 

510

 

 

646

 

 

713

 

Depreciation and amortization expense(1)

172

 

 

446

 

 

151

 

 

97

 

 

98

 

 

100

 

Operating EBITDA

596

 

 

2,617

 

 

453

 

 

607

 

 

744

 

 

813

 

 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions)

Engineered Materials

 

13

 

2

 

3

 

4

 

4

Acetyl Chain

 

2

 

 

 

 

2

Other Activities(2)

 

1

 

 

 

1

 

Accelerated depreciation and amortization expense

 

16

 

2

 

3

 

5

 

6

Depreciation and amortization expense(1)

172

 

446

 

151

 

97

 

98

 

100

Total depreciation and amortization expense

172

 

462

 

153

 

100

 

103

 

106

______________________________

(1)

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

(2)

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

Table 1a

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

 

Q1 '23

 

Q4 '22

 

 

(In $ millions)

 

Net earnings (loss) attributable to M&M

(48

)

 

(69

)

(3)

Income tax provision (benefit)

13

 

 

6

 

 

Certain Items(1)

86

 

 

72

 

 

Adjusted EBIT

51

 

 

9

 

 

Depreciation and amortization expense

68

 

 

47

 

 

Operating EBITDA(2)

119

 

 

56

(4)

______________________________

(1)

Amount is included within total Certain Items shown in Table 8.

(2)

Excludes $(23) million and $(17) million of Operating EBITDA included in Other Activities for the three months ended March 31, 2023 and December 31, 2022, respectively.

(3)

Excludes $30 million of Net loss for the month ended October 31, 2022, prior to our acquisition of the majority of the Mobility & Materials business ("M&M Business") of DuPont de Nemours, Inc.

(4)

Excludes $22 million of Operating EBITDA for the month ended October 31, 2022, prior to our acquisition of the M&M Business.

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

 

Q1 '23

 

2022

 

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions, except percentages)

Operating Profit (Loss) / Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials(1)

112

 

 

6.9

%

 

429

 

 

10.7

%

 

25

 

 

2.0

%

 

114

 

 

12.3

%

 

166

 

 

17.5

%

 

124

 

 

13.6

%

Acetyl Chain(1)

278

 

 

22.2

%

 

1,447

 

 

25.2

%

 

204

 

 

18.0

%

 

312

 

 

22.3

%

 

428

 

 

27.5

%

 

503

 

 

30.4

%

Other Activities(2)

(139

)

 

 

 

(498

)

 

 

 

(173

)

 

 

 

(118

)

 

 

 

(111

)

 

 

 

(96

)

 

 

Total

251

 

 

8.8

%

 

1,378

 

 

14.2

%

 

56

 

 

2.4

%

 

308

 

 

13.4

%

 

483

 

 

19.4

%

 

531

 

 

20.9

%

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

2

 

 

 

 

8

 

 

 

 

2

 

 

 

 

2

 

 

 

 

2

 

 

 

 

2

 

 

 

Operating Profit (Loss) Attributable to Celanese Corporation

249

 

 

8.7

%

 

1,370

 

 

14.2

%

 

54

 

 

2.3

%

 

306

 

 

13.3

%

 

481

 

 

19.3

%

 

529

 

 

20.8

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials(1)

112

 

 

6.9

%

 

429

 

 

10.7

%

 

25

 

 

2.0

%

 

114

 

 

12.3

%

 

166

 

 

17.5

%

 

124

 

 

13.6

%

Acetyl Chain(1)

276

 

 

22.1

%

 

1,439

 

 

25.1

%

 

202

 

 

17.8

%

 

310

 

 

22.2

%

 

426

 

 

27.3

%

 

501

 

 

30.3

%

Other Activities(2)

(139

)

 

 

 

(498

)

 

 

 

(173

)

 

 

 

(118

)

 

 

 

(111

)

 

 

 

(96

)

 

 

Total

249

 

 

8.7

%

 

1,370

 

 

14.2

%

 

54

 

 

2.3

%

 

306

 

 

13.3

%

 

481

 

 

19.3

%

 

529

 

 

20.8

%

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

10

 

 

 

 

207

 

 

 

 

35

 

 

 

 

70

 

 

 

 

53

 

 

 

 

49

 

 

 

Acetyl Chain

34

 

 

 

 

143

 

 

 

 

30

 

 

 

 

34

 

 

 

 

39

 

 

 

 

40

 

 

 

Other Activities(2)

(1

)

 

 

 

12

 

 

 

 

1

 

 

 

 

4

 

 

 

 

1

 

 

 

 

6

 

 

 

Total

43

 

 

 

 

362

 

 

 

 

66

 

 

 

 

108

 

 

 

 

93

 

 

 

 

95

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acetyl Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Activities(2)

1

 

 

 

 

17

 

 

 

 

(57

)

 

 

 

25

 

 

 

 

25

 

 

 

 

24

 

 

 

Total

1

 

 

 

 

17

 

 

 

 

(57

)

 

 

 

25

 

 

 

 

25

 

 

 

 

24

 

 

 

Certain Items Attributable to Celanese Corporation (Table 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

93

 

 

 

 

143

 

 

 

 

78

 

 

 

 

22

 

 

 

 

5

 

 

 

 

38

 

 

 

Acetyl Chain

6

 

 

 

 

27

 

 

 

 

10

 

 

 

 

5

 

 

 

 

10

 

 

 

 

2

 

 

 

Other Activities(2)

32

 

 

 

 

252

 

 

 

 

151

 

 

 

 

44

 

 

 

 

32

 

 

 

 

25

 

 

 

Total

131

 

 

 

 

422

 

 

 

 

239

 

 

 

 

71

 

 

 

 

47

 

 

 

 

65

 

 

 

Adjusted EBIT / Adjusted EBIT Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

215

 

 

13.2

%

 

779

 

 

19.4

%

 

138

 

 

11.2

%

 

206

 

 

22.2

%

 

224

 

 

23.6

%

 

211

 

 

23.2

%

Acetyl Chain

316

 

 

25.3

%

 

1,609

 

 

28.0

%

 

242

 

 

21.3

%

 

349

 

 

25.0

%

 

475

 

 

30.5

%

 

543

 

 

32.9

%

Other Activities(2)

(107

)

 

 

 

(217

)

 

 

 

(78

)

 

 

 

(45

)

 

 

 

(53

)

 

 

 

(41

)

 

 

Total

424

 

 

14.9

%

 

2,171

 

 

22.4

%

 

302

 

 

12.9

%

 

510

 

 

22.2

%

 

646

 

 

26.0

%

 

713

 

 

28.1

%

___________________________

(1)

Net earnings (loss) attributable to NCI is included within the Engineered Materials and the Acetyl Chain segments.

(2)

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

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

 

Q1 '23

 

2022

 

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions, except percentages)

Depreciation and Amortization Expense(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

112

 

 

 

 

213

 

 

 

 

90

 

 

 

 

40

 

 

 

 

41

 

 

 

 

42

 

 

 

Acetyl Chain

54

 

 

 

 

211

 

 

 

 

52

 

 

 

 

53

 

 

 

 

52

 

 

 

 

54

 

 

 

Other Activities(2)

6

 

 

 

 

22

 

 

 

 

9

 

 

 

 

4

 

 

 

 

5

 

 

 

 

4

 

 

 

Total

172

 

 

 

 

446

 

 

 

 

151

 

 

 

 

97

 

 

 

 

98

 

 

 

 

100

 

 

 

Operating EBITDA / Operating EBITDA Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineered Materials

327

 

 

20.1

%

 

992

 

 

24.7

%

 

228

 

 

18.4

%

 

246

 

 

26.5

%

 

265

 

 

28.0

%

 

253

 

 

27.8

%

Acetyl Chain

370

 

 

29.6

%

 

1,820

 

 

31.7

%

 

294

 

 

25.9

%

 

402

 

 

28.8

%

 

527

 

 

33.8

%

 

597

 

 

36.1

%

Other Activities(2)

(101

)

 

 

 

(195

)

 

 

 

(69

)

 

 

 

(41

)

 

 

 

(48

)

 

 

 

(37

)

 

 

Total

596

 

 

20.9

%

 

2,617

 

 

27.1

%

 

453

 

 

19.3

%

 

607

 

 

26.4

%

 

744

 

 

29.9

%

 

813

 

 

32.0

%

___________________________

(1)

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

(2)

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

Table 3

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

 

 

Q1 '23

 

2022

 

Q4 '22

Q3 '22

Q2 '22

Q1 '22

 

 

 

per

 

 

 

per

 

 

 

per

 

 

 

per

 

 

 

per

 

 

 

per

share

share

share

share

share

share

 

(In $ millions, except per share data)

Earnings (loss) from continuing operations attributable to Celanese Corporation

94

 

 

0.86

 

1,902

 

 

17.41

 

 

768

 

 

7.03

 

 

192

 

 

1.76

 

 

440

 

 

4.03

 

 

502

 

 

4.61

 

Income tax provision (benefit)

25

 

 

 

 

(489

)

 

 

 

(840

)

 

 

 

127

 

 

 

 

112

 

 

 

 

112

 

 

 

Earnings (loss) from continuing operations before tax

119

 

 

 

 

1,413

 

 

 

 

(72

)

 

 

 

319

 

 

 

 

552

 

 

 

 

614

 

 

 

Certain Items attributable to Celanese Corporation (Table 8)

131

 

 

 

 

422

 

 

 

 

239

 

 

 

 

71

 

 

 

 

47

 

 

 

 

65

 

 

 

Refinancing and related expenses

 

 

 

158

 

(1)

 

14

 

(1)

 

104

 

(1)

 

26

 

(1)

 

14

 

(1)

Adjusted earnings (loss) from continuing operations before tax

250

 

 

 

 

1,993

 

 

 

 

181

 

 

 

 

494

 

 

 

 

625

 

 

 

 

693

 

 

 

Income tax (provision) benefit on adjusted earnings(2)

(30

)

 

 

 

(259

)

 

 

 

(24

)

 

 

 

(64

)

 

 

 

(81

)

 

 

 

(90

)

 

 

Adjusted earnings (loss) from continuing operations(3)

220

 

 

2.01

 

1,734

 

 

15.88

 

 

157

 

 

1.44

 

 

430

 

 

3.94

 

 

544

 

 

4.99

 

 

603

 

 

5.54

 

 

Diluted shares (in millions)(4)

Weighted average shares outstanding

108.6

 

 

 

 

108.4

 

 

 

 

108.5

 

 

 

 

108.4

 

 

 

 

108.4

 

 

 

 

108.2

 

 

 

Incremental shares attributable to equity awards

0.6

 

 

 

 

0.8

 

 

 

 

0.7

 

 

 

 

0.7

 

 

 

 

0.7

 

 

 

 

0.7

 

 

 

Total diluted shares

109.2

 

 

 

 

109.2

 

 

 

 

109.2

 

 

 

 

109.1

 

 

 

 

109.1

 

 

 

 

108.9

 

 

 

______________________________

(1)

Includes net interest expense and certain fees related to debt issued as part of our acquisition of the M&M Business.

(2)

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

 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

 

Adjusted effective tax rate

12

 

 

 

13

 

 

 

13

 

 

 

13

 

 

 

13

 

 

 

13

 

 

(3)

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)

2022

 

(18.4

)

5.4

(4)

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

Table 3a

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

 

 

Estimated

 

Actual

 

 

2023

 

 

2022

 

 

 

(In percentages)

 

US GAAP annual effective tax rate

16

 

 

(34

)

 

Discrete quarterly recognition of GAAP items(1)

(1

)

 

(6

)

 

Tax impact of other charges and adjustments(2)

(3

)

 

9

 

 

Utilization of foreign tax credits

 

 

 

 

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

 

 

(1

)

 

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

 

 

45

 

(5)

Adjusted tax rate

12

 

 

13

 

 

______________________________

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

(1)

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

(2)

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

(3)

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

(4)

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

(5)

Includes the reversal of certain U.S. GAAP deferred tax benefits in 2022 related to non-recurring internal restructuring transactions related to the M&M acquisition, to centralize ownership of intellectual property with the business and to facilitate future deployment of cash to service acquisition indebtedness. Certain benefits of the internal restructuring will be realized in future periods for adjusted earnings purposes.

Table 4

Net Sales by Segment - Unaudited
 
 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions)

Engineered Materials

1,630

 

 

4,024

 

 

1,237

 

 

929

 

 

948

 

 

910

 

Acetyl Chain

1,250

 

 

5,743

 

 

1,135

 

 

1,397

 

 

1,559

 

 

1,652

 

Intersegment eliminations(1)

(27

)

 

(94

)

 

(24

)

 

(25

)

 

(21

)

 

(24

)

Net sales

2,853

 

 

9,673

 

 

2,348

 

 

2,301

 

 

2,486

 

 

2,538

 

___________________________

(1)

Includes intersegment sales primarily related to the Acetyl Chain.

Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
 

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

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

34

 

(4

)

 

2

 

32

 

Acetyl Chain

10

 

 

(2

)

 

2

 

 

10

 

 

 

 

 

 

 

 

 

 

 

Total Company

19

 

 

(4

)

 

2

 

 

17

 

 

Three Months Ended December 31, 2022 Compared to Three Months Ended September 30, 2022
 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

34

 

 

(1

)

 

 

33

 

(1)

Acetyl Chain

(9

)

 

(10

)

 

 

(19

)

 

 

 

 

 

 

 

 

 

 

Total Company

8

 

 

(6

)

 

 

2

 

 

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

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

(1

)

 

2

 

 

(3

)

 

(2

)

 

Acetyl Chain

(3

)

 

(5

)

 

(2

)

 

(10

)

 

 

 

 

 

 

 

 

 

 

Total Company

(2

)

 

(3

)

 

(2

)

 

(7

)

 

Three Months Ended June 30, 2022 Compared to Three Months Ended March 31, 2022

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

1

 

 

6

 

(3

)

 

4

 

 

Acetyl Chain

(6

)

 

2

 

(2

)

 

(6

)

 

 

 

 

 

 

 

 

 

 

Total Company

(2

)

 

2

 

(2

)

 

(2

)

 

Three Months Ended March 31, 2022 Compared to Three Months Ended December 31, 2021

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

23

 

7

 

 

(1

)

 

29

 

Acetyl Chain

7

 

(3

)

 

 

 

4

 

 

 

 

 

 

 

 

 

 

Total Company

12

 

1

 

 

(1

)

 

12

 

________________________

(1)

2022 includes the effect of the acquisition of the majority of the M&M Business.

Table 4b

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 

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

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

Engineered Materials

80

 

 

2

 

 

(3

)

 

79

 

 

Acetyl Chain

(9

)

 

(13

)

 

(2

)

 

(24

)

 

 

 

 

 

 

 

 

 

 

Total Company

23

 

 

(8

)

 

(3

)

 

12

 

 

Three Months Ended December 31, 2022 Compared to Three Months Ended December 31, 2021

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

Engineered Materials

67

 

 

17

 

 

(9

)

 

75

 

 

Acetyl Chain

(12

)

 

(14

)

 

(3

)

 

(29

)

 

 

 

 

 

 

 

 

 

 

Total Company

13

 

 

(5

)

 

(5

)

 

3

 

 

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

Engineered Materials

23

 

 

25

 

(12

)

 

36

 

 

Acetyl Chain

(10

)

 

2

 

(5

)

 

(13

)

 

 

 

 

 

 

 

 

 

 

Total Company

(2

)

 

9

 

(5

)

 

2

 

 

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

Engineered Materials

24

 

 

24

 

(9

)

 

39

 

Acetyl Chain

(5

)

 

11

 

(4

)

 

2

 

 

 

 

 

 

 

 

 

 

Total Company

3

 

 

14

 

(4

)

 

13

 

Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

Engineered Materials

20

 

25

 

(4

)

 

41

 

Acetyl Chain

7

 

38

 

(3

)

 

42

 

 

 

 

 

 

 

 

 

 

Total Company

12

 

32

 

(3

)

 

41

 

Table 4c

Factors Affecting Segment Net Sales Year Over Year - Unaudited

 

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

 

 

Volume

 

Price

 

Currency

 

Total

 

 

(In percentages)

 

Engineered Materials

33

 

 

23

 

(8

)

 

48

 

 

Acetyl Chain

(6

)

 

6

 

(3

)

 

(3

)

 

 

 

 

 

 

 

 

 

 

Total Company

6

 

 

11

 

(4

)

 

13

 

 

Table 5

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

 

 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions, except percentages)

Net cash provided by (used in) investing activities

(178

)

 

(11,141

)

 

(10,713

)

 

(143

)

 

(136

)

 

(149

)

Net cash provided by (used in) financing activities

(69

)

 

10,290

 

 

1,944

 

 

8,600

 

 

(159

)

 

(95

)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

(96

)

 

1,819

 

 

541

 

 

467

 

 

495

 

 

316

 

Capital expenditures on property, plant and equipment

(164

)

 

(543

)

 

(143

)

 

(139

)

 

(124

)

 

(137

)

Contributions from/(Distributions) to NCI

(1

)

 

(13

)

 

(3

)

 

(3

)

 

(3

)

 

(4

)

Free cash flow(1)

(261

)

 

1,263

 

 

395

 

 

325

 

 

368

 

 

175

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

2,853

 

 

9,673

 

 

2,348

 

 

2,301

 

 

2,486

 

 

2,538

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow as % of Net sales

(9.1

)%

 

13.1

%

 

16.8

%

 

14.1

%

 

14.8

%

 

6.9

%

______________________________

(1)

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

Table 6

Cash Dividends Received - Unaudited

 

 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions)

Dividends from equity method investments

40

 

217

 

82

 

27

 

82

 

26

Dividends from equity investments without readily determinable fair values

34

 

133

 

30

 

30

 

36

 

37

Total

74

 

350

 

112

 

57

 

118

 

63

Table 7

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

 

 

Q1 '23

 

2022

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

(In $ millions)

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

1,386

 

 

1,306

 

 

1,306

 

 

977

 

 

809

 

 

860

 

Long-term debt, net of unamortized deferred financing costs

13,396

 

 

13,373

 

 

13,373

 

 

11,360

 

 

3,022

 

 

3,132

 

Total debt

14,782

 

 

14,679

 

 

14,679

 

 

12,337

 

 

3,831

 

 

3,992

 

Cash and cash equivalents

(1,167

)

 

(1,508

)

 

(1,508

)

 

(9,671

)

 

(783

)

 

(605

)

Net debt

13,615

 

 

13,171

 

 

13,171

 

 

2,666

 

 

3,048

 

 

3,387

 

Table 8

Certain Items - Unaudited

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

 

 

Q1 '23

 

2022

 

 

Q4 '22

 

Q3 '22

 

Q2 '22

 

Q1 '22

 

Income Statement Classification

 

(In $ millions)

 

 

Exit and shutdown costs

26

 

52

 

 

2

 

14

 

29

 

 

7

 

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

Asset impairments

 

13

 

 

2

 

12

 

(1

)

 

 

Cost of sales / Other (charges) gains, net

Impact from plant incidents and natural disasters(1)

6

 

17

 

 

17

 

 

 

 

 

Cost of sales

Mergers, acquisitions and dispositions

99

 

267

 

 

138

 

44

 

29

 

 

56

 

Cost of sales / SG&A

Actuarial (gain) loss on pension and postretirement plans

 

80

 

 

80

 

 

 

 

 

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

Legal settlements and commercial disputes

 

3

 

 

 

1

 

 

 

2

 

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

Other

 

(10

)

 

 

 

(10

)

 

 

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

Certain Items attributable to Celanese Corporation

131

 

422

 

 

239

 

71

 

47

 

 

65

 

 

___________________________

(1)

Primarily associated with Winter Storm Elliott.

Table 9

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

 

 

 

 

 

 

2022

 

 

 

 

 

(In $ millions, except

percentages)

Net earnings (loss) attributable to Celanese Corporation

 

 

 

 

1,894

 

 

 

 

 

 

 

Adjusted EBIT (Table 1)

 

 

 

 

2,171

 

Adjusted effective tax rate (Table 3a)

 

 

 

 

13

%

Adjusted EBIT tax effected

 

 

 

 

1,889

 

 

 

 

 

 

 

 

2022

 

2021

 

Average

 

(In $ millions, except percentages)

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

1,306

 

791

 

1,049

 

Long-term debt, net of unamortized deferred financing costs

13,373

 

3,176

 

8,275

 

Celanese Corporation stockholders' equity

5,637

 

4,189

 

4,913

 

Invested capital

 

 

 

 

14,237

 

 

 

 

 

 

 

Return on invested capital (adjusted)

 

 

 

 

13.3

%

 

 

 

 

 

 

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

 

 

 

 

13.3

%

 

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