Celanese Corporation Reports Second Quarter Earnings; Increases 2017 Outlook

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DALLAS–(BUSINESS WIRE)–
Celanese Corporation (NYSE: CE), a global technology and specialty
materials company, today reported second quarter 2017 GAAP diluted
earnings per share of $1.72 and adjusted earnings per share of $1.79,
each a second quarter record. The Acetyl Chain and the Materials
Solutions cores both contributed to the strong performance in the
quarter. Advanced Engineered Materials grew project commercializations
from translation of customer needs into value-add solutions and success
with the ongoing integration of SO.F.TER. and Nilit. The Acetyl Chain
grew profitability, overcoming the impact of a major site-wide
turnaround. In the quarter, the company executed an agreement with
Blackstone to form a new global company combining Celanese’s cellulose
derivatives and Blackstone’s recently acquired Rhodia Acetow businesses.
This will bring together two complementary cellulose acetate businesses
that will better service global customers and advance technology to
support existing and future markets.

Second Quarter 2017 Financial Highlights:

   
Three Months Ended
June 30,
2017     2016
(unaudited)
(In $ millions)
Operating Profit (Loss)
Advanced Engineered Materials 97 82
Consumer Specialties 49   80  
Total Materials Solutions 146   162  
Industrial Specialties 26 29
Acetyl Intermediates 109 77
Eliminations   1  
Total Acetyl Chain 135   107  
Other Activities (41 ) (26 )
Total 240   243  
   
 
Three Months Ended
June 30,
  2017         2016  
(unaudited)
(In $ millions, except per share data)
Net Earnings (Loss) 233 223
 
Adjusted EBIT(1)(2)
Advanced Engineered Materials 142 111
Consumer Specialties   79     108  
Total Materials Solutions   221     219  
Industrial Specialties 26 30
Acetyl Intermediates 106 80
Eliminations       1  
Total Acetyl Chain   132     111  
Other Activities   (27 )   (18 )
Total   326     312  
 
Equity Earnings, Cost-Dividend Income, Other Income (Expense)
Advanced Engineered Materials 38 27
Consumer Specialties   28     28  
Total Materials Solutions   66     55  
 
Operating EBITDA(1) 401 385
Diluted EPS – continuing operations $ 1.72 $ 1.50
Diluted EPS – total $ 1.66 $ 1.50
Adjusted EPS(1) $ 1.79 $ 1.59
 
Net cash provided by (used in) investing activities (325 ) (63 )
Net cash provided by (used in) financing activities 21 (259 )
Net cash provided by (used in) operating activities 298 349
Free cash flow(1) 240 285
______________________________

(1)

  See “Non-US GAAP Financial Measures” below.

(2)

The Company’s discussion of adjusted earnings includes use of terms
such as “segment income” and “core income”. Those non-GAAP terms are
defined below and reconciled in our Non-US GAAP Financial Measures
and Supplemental Information document referenced below.
 
 

Second Quarter 2017 Highlights:

  • Signed an agreement with Blackstone to combine Celanese’s cellulose
    derivatives and Blackstone’s Rhodia Acetow businesses in a 70-30 joint
    venture, pending approvals. JV is expected to distribute a $1.6
    billion cash dividend to Celanese at close which will be deployed in
    organic growth, acquisitions, share repurchases, and debt reduction.
  • Completed the acquisition of the nylon compounding division of Nilit
    Group (Nilit), a major independent producer of high performance nylon
    polymers and compounds. This acquisition enhances Celanese’s
    leadership position in Advanced Engineered Materials (AEM), enabling
    further success of the opportunity pipeline.
  • Commercialized a record 547 projects in the second quarter of 2017, a
    63 percent increase from the same period last year, in engineered
    materials (AEM excluding affiliates). Increased target for projects
    closed in 2017 to above 2000, a 44 percent increase over 2016.
  • Announced a new $1.5 billion share repurchase authorization. The
    timing of the repurchases will be partially based on the closing of
    the tow joint venture with Blackstone.
  • Increased the quarterly common stock cash dividend by 28 percent from
    $1.44 to $1.84 per share on an annual basis. This is the first of
    three steps to grow cash dividends by 50% cumulatively over a
    three-year period.
  • Confirmed that the Ibn Sina JV polyacetal (POM) facility in Jubail,
    Saudi Arabia is in the testing phase with production expected in the
    third quarter of 2017.

Second Quarter 2017 Business Segment Overview

Materials Solutions

Materials Solutions reported record net sales of $709 million in the
second quarter, an 18 percent improvement over the prior year with
Advanced Engineered Materials more than offsetting the decline in
Consumer Specialties. Advanced Engineered Materials generated record
second quarter GAAP operating profit of $97 million and record second
quarter segment income of $142 million. An all time high of 547 projects
were commercialized in the quarter driven by the organic opportunity
pipeline and the recent SO.F.TER. and Nilit acquisitions. The successful
integration of these acquisitions is a key element of AEM’s growth
strategy. While immediately accretive to segment income, these
acquisitions are margin dilutive until synergies and product value
upgrades are realized. Volume increased over second quarter of 2016
driven by the acquisitions, growth in Asia, and success of the project
pipeline.

Acetate tow volume and price declined year over year driven by lower
industry capacity utilization rates and outpaced productivity gains in
the quarter. Sequentially, tow volume and price declined mainly because
the first quarter of 2017 had some unique carryovers from 2016 contracts.

Affiliate earnings increased 20 percent year over year to $66 million
primarily driven by Ibn Sina which had a turnaround in the second
quarter of 2016 that did not occur in 2017.

Acetyl Chain

The Acetyl Chain grew second quarter GAAP operating profit by 26 percent
year over year to $135 million and grew core income by 19 percent year
over year to $132 million. During the planned turnaround in Clear Lake,
Texas, the business leveraged its global production and supply chain
capabilities and established product swaps to ensure reliability of
supply to key customers, overcoming industry supply constraints and
Celanese’s limitations at Clear Lake. Pricing expanded in excess of
higher raw material costs across products and more than offset higher
turnaround expenses. GAAP operating margin of 16.3 percent and segment
income margin of 16.0 percent were second quarter records. The chain’s
ability to respond quickly to global trade flow changes, even with the
flagship acetyl plant in a major turnaround, demonstrates the
versatility of the acetyls business at Celanese.

Cash Flow

The Company recorded operating cash flow of $298 million and free cash
flow of $240 million. Capital expenditures were $54 million in the
quarter. In the second quarter, a total of $237 million cash was
returned to shareholders, via $172 million in share buy-backs and $65
million in dividends. The Company targets at least $500 million in share
repurchases in 2017.

Outlook

“The focus on value delivery at Celanese and growth driven business
models enabled the strong performance in the second quarter. Advanced
Engineered Materials is expected to generate outsized earnings growth
propelled by a vibrant project pipeline and early success from
integrating SO.F.TER. and Nilit. The Acetyl Chain is poised to drive
earnings growth in the second half of 2017 by leveraging raw material
volatility and higher volumes as Clear Lake returns to pre-turnaround
capacity. Productivity savings of approximately $100 million are on
target for the year, supported by initiatives across the company.
Building on our success in the second quarter, we are increasing our
expectations for growth in adjusted earnings per share to 9-11 percent
for 2017,” said Rohr.

We are 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.

The Company’s earnings presentation and prepared remarks related to the
second quarter results will be posted on its website at www.celanese.com
under Investor Relations/Events and Presentations after market close on
July 24, 2017. Information about Non-US GAAP measures is included in a
Non-US GAAP Financial Measures and Supplemental Information document
posted on the website and available at the link below. See “Non-GAAP
Financial Measures” below.

Celanese Corporation is a global technology leader in the production
of differentiated chemistry solutions and specialty materials used in
most major industries and consumer applications. Our two complementary
business cores, Acetyl Chain and Materials Solutions, use the full
breadth of Celanese’s global chemistry, technology and business
expertise to create value for our customers 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 7,500 employees worldwide and had 2016 net sales of $5.4
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, synergies, 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, including the
announced joint venture transaction. 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,
including with respect to the joint venture. These risks and
uncertainties include, among other things: changes in general economic,
business, political and regulatory conditions in the countries or
regions in which we operate; the length and depth of product and
industry business cycles, particularly in the automotive, electrical,
textiles, electronics and construction industries; changes in the price
and availability of raw materials, particularly changes in the demand
for, supply of, and market prices of ethylene, methanol, natural gas,
wood pulp and fuel oil and the prices for electricity and other energy
sources; the ability to pass increases in raw material prices on to
customers or otherwise improve margins through price increases; the
ability to maintain plant utilization rates and to implement planned
capacity additions and expansions; the ability to reduce or maintain
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 consummate
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; the ability to obtain governmental approvals and to
construct facilities on terms and schedules acceptable to the Company;
changes in the degree of intellectual property and other legal
protection afforded to our products or technologies, or the theft of
such intellectual property; 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 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; potential
liability for remedial actions and increased costs under existing or
future environmental regulations, including those relating to climate
change; potential liability resulting from pending or future litigation,
or from changes in the laws, regulations or policies of governments or
other governmental activities in the countries in which we operate;
changes in currency exchange rates and interest rates; our level of
indebtedness, which could diminish our ability to raise additional
capital to fund operations or limit our ability to react to changes in
the economy or the chemicals industry; and various other factors
discussed from time to time in the Company’s filings with the Securities
and Exchange Commission. Any forward-looking statement speaks only as of
the date on which it is made, and the Company undertakes no obligation
to update any forward-looking statements to reflect events or
circumstances after the date on which it is made or to reflect the
occurrence of anticipated or unanticipated events or circumstances.

Non-GAAP Financial Measures

Presentation

This document presents the Company’s business segments in two
subtotals, reflecting our two cores, the Acetyl Chain and Materials
Solutions, based on similarities among customers, business models and
technical processes. As described in the Company’s annual report on Form
10-K and quarterly reports on Form 10-Q, the Acetyl Chain includes the
Company’s Acetyl Intermediates segment and the Industrial Specialties
segment. Materials Solutions includes the Company’s Advanced Engineered
Materials segment and the Consumer Specialties segment.

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 may provide guidance on adjusted EBIT but are unable to reconcile
    forecasted adjusted EBIT to a US GAAP financial measure without
    unreasonable efforts because a forecast of Certain Items, such as
    mark-to-market pension gains and losses, which may be significant, is
    not practical. Adjusted EBIT margin is defined by the Company as
    adjusted EBIT divided by net sales.
  • Adjusted EBIT by core (i.e., Acetyl Chain and/or Materials
    Solutions) may also be referred to by management as core income.
    Adjusted EBIT margin by core may also be referred to by management as
    core income margin. Adjusted EBIT by business segment may also be
    referred to by management as segment income. Adjusted EBIT margin by
    business segment may also be referred to by management as segment
    income margin.
  • 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 may provide guidance on adjusted earnings per
    share but are unable to reconcile forecasted adjusted earnings per
    share to a US GAAP financial measure without unreasonable efforts
    because a forecast of Certain Items, such as mark-to-market pension
    gains and losses, which may be significant, is not practical.

    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 July 24, 2017 and also
available on our website at
www.celanese.com
under Financial Information, Non-GAAP Financial Measures, or at this
link:
http://investors.celanese.com/interactive/lookandfeel/4103411/Non-GAAP.PDF.

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
June 30,
2017     2016

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

Net sales 1,510 1,351
Cost of sales (1,143 ) (1,013 )
Gross profit 367 338
Selling, general and administrative expenses (96 ) (71 )
Amortization of intangible assets (5 ) (2 )
Research and development expenses (17 ) (19 )
Other (charges) gains, net (3 ) (4 )
Foreign exchange gain (loss), net (4 ) (1 )
Gain (loss) on disposition of businesses and asset, net (2 ) 2  
Operating profit (loss) 240 243
Equity in net earnings (loss) of affiliates 38 35
Interest expense (30 ) (30 )
Refinancing expense
Interest income 1
Dividend income – cost investments 29 29
Other income (expense), net 3   (2 )
Earnings (loss) from continuing operations before tax 281 275
Income tax (provision) benefit (40 ) (52 )
Earnings (loss) from continuing operations 241   223  
Earnings (loss) from operation of discontinued operations (9 )
Income tax (provision) benefit from discontinued operations 1    
Earnings (loss) from discontinued operations (8 )  
Net earnings (loss) 233 223
Net (earnings) loss attributable to noncontrolling interests (2 ) (2 )
Net earnings (loss) attributable to Celanese Corporation 231   221  
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations 239 221
Earnings (loss) from discontinued operations (8 )  
Net earnings (loss) 231   221  
Earnings (loss) per common share – basic
Continuing operations 1.73 1.51
Discontinued operations (0.06 )  
Net earnings (loss) – basic 1.67   1.51  
Earnings (loss) per common share – diluted
Continuing operations 1.72 1.50
Discontinued operations (0.06 )  
Net earnings (loss) – diluted 1.66   1.50  
Weighted average shares (in millions)
Basic 138.6 146.5
Diluted 139.0 147.1
 
 

Consolidated Balance Sheets – Unaudited

 
    As of     As of
June 30, December 31,
2017 2016
(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents 511 638
Trade receivables – third party and affiliates, net 985 801
Non-trade receivables, net 227 223
Inventories 771 720
Marketable securities, at fair value 30 30
Other assets 59   60  
Total current assets 2,583   2,472  
Investments in affiliates 885 852
Property, plant and equipment, net 3,663 3,577
Deferred income taxes 164 159
Other assets 311 307
Goodwill 975 796
Intangible assets, net 302   194  
Total assets 8,883   8,357  
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt –
third party and affiliates
384 118
Trade payables – third party and affiliates 666 625
Other liabilities 332 322
Income taxes payable 42   12  
Total current liabilities 1,424   1,077  
Long-term debt, net of unamortized deferred financing costs 2,931 2,890
Deferred income taxes 165 130
Uncertain tax positions 150 131
Benefit obligations 866 893
Other liabilities 225 215
Commitments and Contingencies
Stockholders’ Equity
Preferred stock
Common stock
Treasury stock, at cost (1,834 ) (1,531 )
Additional paid-in capital 158 157
Retained earnings 4,617 4,320
Accumulated other comprehensive income (loss), net (247 ) (358 )
Total Celanese Corporation stockholders’ equity 2,694 2,588
Noncontrolling interests 428   433  
Total equity 3,122   3,021  
Total liabilities and equity 8,883   8,357  
 
 

Non-US GAAP Financial Measures and Supplemental
Information

July 24, 2017

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 business segments in two
subtotals, reflecting our two cores, the Acetyl Chain and Materials
Solutions, based on similarities among customers, business models and
technical processes. As described in the Company’s annual report on Form
10-K and quarterly reports on Form 10-Q, the Acetyl Chain includes the
Company’s Acetyl Intermediates segment and the Industrial Specialties
segment. Materials Solutions includes the Company’s Advanced Engineered
Materials segment and the Consumer Specialties segment.

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 Investor Relations/Financial
Information/SEC Filings page of our website,
www.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 Investor Relations/Financial Information/Non-GAAP
Financial Measures page of our website,
www.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 may provide guidance on
    adjusted EBIT but are unable to reconcile forecasted adjusted EBIT to
    a US GAAP financial measure without unreasonable efforts because a
    forecast of Certain Items, such as mark-to-market pension gains and
    losses, which may be significant, is not practical. 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.
  • Adjusted EBIT by core (i.e. Acetyl Chain and/or Materials
    Solutions) may also be referred to by management as core income.
    Adjusted EBIT margin by core may also be referred to by management as
    core income margin. Adjusted EBIT by business segment may also be
    referred to by management as segment income. Adjusted EBIT margin by
    business segment may also be referred to by management as segment
    income margin.
  • 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 may provide guidance on
    adjusted earnings per share but are unable to reconcile forecasted
    adjusted earnings per share to a GAAP financial measure without
    unreasonable efforts because a forecast of Certain Items, such as
    mark-to-market pension gains and losses, which may be significant, is
    not practical.

    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. In addition, achievement of certain predetermined
    targets relating to return on invested capital (adjusted) is one of
    the factors we consider in determining the amount of performance-based
    compensation received by our management.

Supplemental Information

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

  • Net sales for Materials Solutions, the Acetyl Chain and each of our
    business segments and the percentage increase or decrease in net sales
    attributable to price, volume, currency and other factors for
    Materials Solutions, the Acetyl Chain and each of our business
    segments.
  • Cash dividends received from our equity and cost 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
 
   

Q2 ’17

    Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions)
Net earnings (loss) attributable to Celanese Corporation 231 183 900 160 262 221 257
(Earnings) loss from discontinued operations 8 2 3 (1 )
Interest income (1 ) (2 ) (1 ) (1 )
Interest expense 30 29 120 29 28 30 33
Refinancing expense 6 4 2
Income tax provision (benefit) 40 56 122 (5 ) 15 52 60

Certain Items attributable to Celanese Corporation (Table 8)

18   65 130   106   7 9 8  
Adjusted EBIT 326 333 1,278 289 319 312 358
Depreciation and amortization expense(1) 75   71 288   71   71 73 73  
Operating EBITDA 401   404 1,566   360   390 385 431  
 
 
Q2 ’17 Q1 ’17 2016 Q4 ’16 Q3 ’16 Q2 ’16 Q1 ’16
(In $ millions)
Advanced Engineered Materials
Consumer Specialties 1 1
Industrial Specialties
Acetyl Intermediates
Other Activities(2)   1   1    
Accelerated depreciation and amortization expense 2 1 1
Depreciation and amortization expense(1) 75   71 288   71   71 73 73  
Total depreciation and amortization expense 75   71 290   72   72 73 73  
______________________________

(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

 
    Q2 ’17     Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin                            
Materials Solutions 146 20.6 % 166 23.5 % 652 27.5 % 163 27.7 % 161 27.3 % 162 27.0 % 166 27.9 %
Acetyl Chain(1) 135 16.3 % 52 6.5 % 446 14.2 % 86 11.5 % 108 14.2 % 107 13.7 % 145 17.3 %

Other Activities(2)

(41 ) (26 ) (205 ) (132 ) (23 ) (26 ) (24 )
Total 240   15.9 % 192   13.1 % 893   16.6 % 117   8.9 % 246   18.6 % 243   18.0 % 287   20.4 %
Less: Net Earnings (Loss) Attributable to NCI(1) 2   1   6   1   1   2   2  
Operating Profit (Loss) Attributable to Celanese Corporation 238   15.8 % 191   13.0 % 887   16.5 % 116   8.8 % 245   18.5 % 241   17.8 % 285   20.3 %
Operating Profit (Loss) / Operating Margin Attributable to
Celanese Corporation
Advanced Engineered Materials 97 18.8 % 98 20.1 % 350 24.2 % 87 23.9 % 93 25.5 % 82 22.5 % 88 25.1 %
Consumer Specialties 49   25.4 % 68   31.2 % 302   32.5 % 76   33.8 % 68   30.2 % 80   34.0 % 78   32.0 %
Total Materials Solutions 146   20.6 % 166   23.5 % 652   27.5 % 163   27.7 % 161   27.3 % 162   27.0 % 166   27.9 %
Industrial Specialties 26 9.9 % 25 10.2 % 105 10.7 % 20 9.1 % 25 10.2 % 29 11.1 % 31 12.3 %
Acetyl Intermediates(1) 107 16.5 % 26 4.2 % 334 13.7 % 65 10.9 % 82 13.9 % 75 12.7 % 112 16.9 %
Eliminations     1       1    
Total Acetyl Chain 133   16.1 % 51   6.4 % 440   14.0 % 85   11.3 % 107   14.0 % 105   13.5 % 143   17.0 %
Other Activities(2) (41 ) (26 ) (205 ) (132 ) (23 ) (26 ) (24 )
Total 238   15.8 % 191   13.0 % 887   16.5 % 116   8.8 % 245   18.5 % 241   17.8 % 285   20.3 %
Equity Earnings, Cost-Dividend Income, Other Income (Expense)
Attributable to Celanese Corporation
Advanced Engineered Materials 38 42 122 31 33 27 31
Consumer Specialties 28   30   110   27   27   28   28  
Total Materials Solutions 66   72   232   58   60   55   59  
Industrial Specialties
Acetyl Intermediates 2   1   7   2   1   2   2  
Total Acetyl Chain 2   1   7   2   1   2   2  
Other Activities(2) 2   4   22   7   6   5   4  
Total 70   77   261   67   67   62   65  

Certain Items Attributable to Celanese Corporation (Table 8)

Advanced Engineered Materials 7 3 7 3 1 2 1
Consumer Specialties 2   2   6   3   3      
Total Materials Solutions 9   5   13   6   4   2   1  
Industrial Specialties 1 (2 ) 1 2
Acetyl Intermediates (3 ) 56   6   1   1   3   1  
Total Acetyl Chain (3 ) 56   7   (1 ) 1   4   3  
Other Activities(2) 12   4   110   101   2   3   4  
Total 18   65   130   106   7   9   8  
Adjusted EBIT / Adjusted EBIT Margin
Advanced Engineered Materials 142 27.5 % 143 29.4 % 479 33.2 % 121 33.2 % 127 34.8 % 111 30.4 % 120 34.3 %
Consumer Specialties 79   40.9 % 100   45.9 % 418   45.0 % 106   47.1 % 98   43.6 % 108   46.0 % 106   43.4 %
Total Materials Solutions 221   31.2 % 243   34.5 % 897   37.8 % 227   38.5 % 225   38.1 % 219   36.5 % 226   38.0 %
Industrial Specialties 26 9.9 % 25 10.2 % 106 10.8 % 18 8.2 % 25 10.2 % 30 11.5 % 33 13.0 %
Acetyl Intermediates 106 16.3 % 83 13.4 % 347 14.2 % 68 11.4 % 84 14.3 % 80 13.5 % 115 17.3 %
Eliminations     1       1    
Total Acetyl Chain 132   16.0 % 108   13.6 % 454   14.5 % 86   11.5 % 109   14.3 % 111   14.2 % 148   17.6 %
Other Activities(2) (27 ) (18 ) (73 ) (24 ) (15 ) (18 ) (16 )
Total 326   21.6 % 333   22.6 % 1,278   23.7 % 289   22.0 % 319   24.1 % 312   23.1 % 358   25.5 %
___________________________
(1)   Net earnings (loss) attributable to NCI is included within the
Acetyl Intermediates 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.)

 
    Q2 ’17     Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions, except percentages)
Depreciation and Amortization Expense(1)                            
Advanced Engineered Materials 26 24 92 21 22 25 24
Consumer Specialties 11   11   44   11   11   11   11  
Total Materials Solutions 37   35   136   32   33   36   35  
Industrial Specialties 10 8 34 9 9 8 8
Acetyl Intermediates 26   26   107   26   27   27   27  
Total Acetyl Chain 36   34   141   35   36   35   35  
Other Activities(2) 2   2   11   4   2   2   3  
Total 75   71   288   71   71   73   73  
Operating EBITDA / Operating EBITDA Margin
Advanced Engineered Materials 168 32.6 % 167 34.3 % 571 39.5 % 142 39.0 % 149 40.8 % 136 37.3 % 144 41.1 %
Consumer Specialties 90   46.6 % 111   50.9 % 462   49.7 % 117   52.0 % 109   48.4 % 119   50.6 % 117   48.0 %
Total Materials Solutions 258   36.4 % 278   39.4 % 1,033   43.5 % 259   44.0 % 258   43.7 % 255   42.5 % 261   43.9 %
Industrial Specialties 36 13.7 % 33 13.5 % 140 14.3 % 27 12.3 % 34 13.9 % 38 14.5 % 41 16.2 %
Acetyl Intermediates 132 20.3 % 109 17.6 % 454 18.6 % 94 15.7 % 111 18.8 % 107 18.1 % 142 21.4 %
Eliminations     1       1    
Total Acetyl Chain 168   20.3 % 142   17.9 % 595   19.0 % 121   16.2 % 145   19.0 % 146   18.7 % 183   21.8 %
Other Activities(2) (25 ) (16 ) (62 ) (20 ) (13 ) (16 ) (13 )
Total 401   26.6 % 404   27.5 % 1,566   29.1 % 360   27.5 % 390   29.5 % 385   28.5 % 431   30.7 %
___________________________

(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
 
    Q2 ’17   Q1 ’17   2016   Q4 ’16   Q3 ’16   Q2 ’16   Q1 ’16
  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
239 1.72 183 1.30 902 6.19 160 1.12 265 1.83 221 1.50 256 1.73
Income tax provision (benefit) 40   56   122   (5 ) 15   52   60  
Earnings (loss) from continuing operations before tax 279 239 1,024 155 280 273 316

Certain Items attributable to Celanese Corporation (Table 8)

18 65 130 106 7 9 8
Refinancing and related expenses     6     4     2  
Adjusted earnings (loss) from continuing operations before tax 297 304 1,160 261 291 282 326
Income tax (provision) benefit on adjusted earnings(1) (48 ) (49 ) (197 ) (44 ) (49 ) (48 ) (55 )
Adjusted earnings (loss) from continuing operations(2) 249   1.79 255   1.81 963   6.61 217   1.52 242   1.67 234   1.59 271   1.83
Diluted shares (in millions)(3)
Weighted average shares outstanding 138.6 140.6 144.9 141.9 144.0 146.5 147.4
Incremental shares attributable to equity awards 0.4   0.4   0.8   0.7   0.6   0.6   0.7  
Total diluted shares 139.0   141.0   145.7   142.6   144.6   147.1   148.1  
 
______________________________

(1)

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

 
Q2 ’17 Q1 ’17 2016 Q4 ’16 Q3 ’16 Q2 ’16 Q1 ’16
(In percentages)
Adjusted effective tax rate 16 16 17 17 17 17 17
 

(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)
2016 6.9 7.3
 

(3)

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

 
 
Table 3a
Adjusted Tax Rate – Reconciliation of a Non-GAAP Measure –
Unaudited
 
    Estimated     Actual
2017 2016
(In percentages)
US GAAP effective tax rate 18 12
Discrete quarterly recognition of GAAP items(1) 1
Tax impact of other charges and adjustments(2) (1 ) 3
Utilization of foreign tax credits
Changes in valuation allowances, excluding impact of other charges
and adjustments(3)
(1 ) 2
Other(4)   (1 )
Adjusted tax rate 16   17  
______________________________

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, 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
 
    Q2 ’17     Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions)
Advanced Engineered Materials 516 487 1,444 364 365 365 350
Consumer Specialties 193   218   929   225   225   235   244  
Total Materials Solutions 709   705   2,373   589   590   600   594  
Industrial Specialties 262 245 979 219 245 262 253
Acetyl Intermediates 649 619 2,441 597 589 592 663
Eliminations(1) (85 ) (70 ) (288 ) (67 ) (71 ) (74 ) (76 )
Total Acetyl Chain 826   794   3,132   749   763   780   840  
Other Activities(2)
Intersegment eliminations(1) (25 ) (28 ) (116 ) (27 ) (30 ) (29 ) (30 )
Net sales 1,510   1,471   5,389   1,311   1,323   1,351   1,404  
 
___________________________

(1)

 

Includes intersegment sales as follows:

Q2 ’17 Q1 ’17 2016 Q4 ’16 Q3 ’16 Q2 ’16 Q1 ’16
(In $ millions)
Industrial Specialties (1 ) (1 ) (3 ) (1 ) (1 ) (1 )
Acetyl Intermediates (109 ) (97 ) (401 ) (93 ) (100 ) (102 ) (106 )
Intersegment eliminations (110 ) (98 ) (404 ) (94 ) (101 ) (103 ) (106 )
 

(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 4a
Factors Affecting Segment Net Sales Sequentially – Unaudited
 
Three Months Ended June 30, 2017 Compared to Three Months Ended
March 31, 2017
 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 4 2 6

(1)

Consumer Specialties (10 ) (2 ) (12 )
Total Materials Solutions (1 ) 1
 
Industrial Specialties 2 3 2 7
Acetyl Intermediates (1 ) 5 1 5
Total Acetyl Chain 5 1 (2 ) 4
 
Total Company 3 1 (1 ) 3
 
 

Three Months Ended March 31, 2017 Compared to Three Months
Ended December 31, 2016

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 35 (1 ) 34

(2)

Consumer Specialties 3 (6 ) (3 )
Total Materials Solutions 22 (2 ) 20
 
Industrial Specialties 11 1 12
Acetyl Intermediates (2 ) 6 4
Total Acetyl Chain 2 5 (1 ) 6
 
Total Company 11 2 (1 ) 12
___________________________

(1)

  2017 includes the effect of the acquisition of the nylon compounding
division of Nilit Group.

(2)

2017 includes the effect of the SO.F.TER. S.p.A. acquisition.
 
 

Three Months Ended December 31, 2016 Compared to Three Months
Ended September 30, 2016

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 1 (1 )
Consumer Specialties 2 (2 )
Total Materials Solutions 2 (1 ) (1 )
 
Industrial Specialties (7 ) (2 ) (2 ) (11 )
Acetyl Intermediates 2 (1 ) 1
Total Acetyl Chain (2 ) 1 (2 ) 1 (2 )
 
Total Company (1 ) 1 (1 ) (1 )
 
 

Three Months Ended September 30, 2016 Compared to Three Months
Ended June 30, 2016

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials (1 ) 1
Consumer Specialties (4 ) (4 )
Total Materials Solutions (2 ) (2 )
 
Industrial Specialties (6 ) (1 ) (7 )
Acetyl Intermediates
Total Acetyl Chain (2 ) (1 ) 1 (2 )
 
Total Company (2 ) (2 )
 
 
Table 4a
Factors Affecting Segment Net Sales Sequentially – Unaudited
(cont.)
 
Three Months Ended June 30, 2016 Compared to Three Months Ended
March 31, 2016
 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 6 (2 ) 1 5
Consumer Specialties (3 ) (1 ) (4 )
Total Materials Solutions 2 (2 ) 1 1
 
Industrial Specialties 4 (1 ) 1 4
Acetyl Intermediates (11 ) (11 )
Total Acetyl Chain (7 ) (1 ) 1 (7 )
 
Total Company (4 ) (1 ) 1 (4 )
 
 

Three Months Ended March 31, 2016 Compared to Three Months
Ended December 31, 2015

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 12 12
Consumer Specialties 6 (7 ) (1 )
Total Materials Solutions 10 (3 ) 7
 
Industrial Specialties 9 (3 ) 6
Acetyl Intermediates 7 (4 ) 3
Total Acetyl Chain 8 (4 ) (1 ) 3
 
Total Company 9 (4 ) 5
 
 
Table 4b
Factors Affecting Segment Net Sales Year Over Year – Unaudited
 
Three Months Ended June 30, 2017 Compared to Three Months Ended
June 30, 2016
 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 44 (2 ) (1 ) 41
Consumer Specialties (9 ) (9 ) (18 )
Total Materials Solutions 23 (4 ) (1 ) 18
 
Industrial Specialties (1 ) 3 (2 )
Acetyl Intermediates (4 ) 14 (1 ) 1 10
Total Acetyl Chain (3 ) 12 (2 ) (1 ) 6
 
Total Company 8 5 (1 ) 12
 
 

Three Months Ended March 31, 2017 Compared to Three Months
Ended March 31, 2016

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 44 (3 ) (2 ) 39
Consumer Specialties (2 ) (8 ) (1 ) (11 )
Total Materials Solutions 25 (5 ) (1 ) 19
 
Industrial Specialties 1 (2 ) (2 ) (3 )
Acetyl Intermediates (12 ) 7 (2 ) (7 )
Total Acetyl Chain (9 ) 5 (2 ) 1 (5 )
 
Total Company 5 1 (2 ) 1 5
 
 

Three Months Ended December 31, 2016 Compared to Three Months
Ended December 31, 2015

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 20 (2 ) (1 ) 17
Consumer Specialties 2 (11 ) (9 )
Total Materials Solutions 12 (6 ) 6
 
Industrial Specialties (1 ) (6 ) (1 ) (8 )
Acetyl Intermediates (4 ) (2 ) (2 ) 1 (7 )
Total Acetyl Chain (4 ) (3 ) (2 ) 1 (8 )
 
Total Company 2 (4 ) (1 ) 1 (2 )
 
 

Three Months Ended September 30, 2016 Compared to Three Months
Ended September 30, 2015

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 16 (4 ) 12
Consumer Specialties (2 ) (7 ) (9 )
Total Materials Solutions 8 (5 ) 3
 
Industrial Specialties (1 ) (9 ) (1 ) (11 )
Acetyl Intermediates (3 ) (11 ) 1 (13 )
Total Acetyl Chain (3 ) (12 ) 2 (13 )
 
Total Company 1 (9 ) 2 (6 )
 
 

Three Months Ended June 30, 2016 Compared to Three Months Ended
June 30, 2015

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 8 (4 ) 1 5
Consumer Specialties 2 (8 ) (6 )
Total Materials Solutions 5 (5 ) 1 1
 
Industrial Specialties (1 ) (8 ) (9 )
Acetyl Intermediates (5 ) (13 ) 2 (16 )
Total Acetyl Chain (4 ) (12 ) 2 (14 )
 
Total Company (10 ) 1 (9 )
 
 

Three Months Ended March 31, 2016 Compared to Three Months
Ended March 31, 2015

 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 5 (2 ) (1 ) 2
Consumer Specialties 17 (9 ) 8
Total Materials Solutions 9 (5 ) 4
 
Industrial Specialties (9 ) (1 ) (10 )
Acetyl Intermediates 6 (13 ) (2 ) 2 (7 )
Total Acetyl Chain 5 (13 ) (2 ) 1 (9 )
 
Total Company 7 (10 ) (2 ) 1 (4 )
 
 
Table 4c
Factors Affecting Segment Net Sales Year Over Year – Unaudited
 
Year Ended December 31, 2016 Compared to Year Ended December 31,
2015
 
    Volume     Price     Currency     Other     Total
(In percentages)
Advanced Engineered Materials 11 (2 ) 9
Consumer Specialties 4 (8 ) (4 )
Total Materials Solutions 8 (5 ) 3
 
Industrial Specialties (1 ) (8 ) (1 ) (10 )
Acetyl Intermediates (2 ) (10 ) (1 ) 2 (11 )
Total Acetyl Chain (2 ) (10 ) (1 ) 2 (11 )
 
Total Company 2 (8 ) (1 ) 2 (5 )
 
 
Table 5
Free Cash Flow – Reconciliation of a Non-GAAP Measure – Unaudited
 
    Q2 ’17     Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions)
Net cash provided by (used in) investing activities (325 ) (64 ) (439 ) (247 ) (54 ) (63 ) (75 )
Net cash provided by (used in) financing activities 21 (270 ) (759 ) (292 ) 265 (259 ) (473 )
 
Net cash provided by (used in) operating activities 298 192 893 (47 ) 304 349 287
Capital expenditures on property, plant and equipment (54 ) (62 ) (246 ) (60 ) (58 ) (58 ) (70 )
Capital (distributions to) contributions from NCI (4 ) (4 ) (24 ) (9 ) (9 ) (6 )  
Free cash flow(1)(2) 240   126   623   (116 ) 237   285   217  
______________________________

(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 from or
distributions to Mitsui & Co., Ltd. (“Mitsui”) related to our joint
venture, Fairway Methanol LLC (“Fairway”).

(2)

Excludes required debt service and capital lease payments of $27
million and $56 million for the years ending December 31, 2017 and
2016, respectively.
 
 
Table 6
Cash Dividends Received – Unaudited
 
    Q2 ’17     Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions)
Dividends from equity method investments 59 50 131 15 6 73 37
Dividends from cost method investments 29 29 108 26 26 29 27
Total 88 79 239 41 32 102 64
 
 
Table 7
Net Debt – Reconciliation of a Non-GAAP Measure – Unaudited
 
    Q2 ’17     Q1 ’17     2016       Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16
(In $ millions)
Short-term borrowings and current installments of long-term debt –
third party and affiliates
384 107 118 118 92 119 116
Long-term debt, net of unamortized deferred financing costs 2,931   2,851   2,890   2,890   2,923   2,464   2,487  
Total debt 3,315 2,958 3,008 3,008 3,015 2,583 2,603
Cash and cash equivalents (511 ) (501 ) (638 ) (638 ) (1,252 ) (735 ) (716 )
Net debt 2,804   2,457   2,370   2,370   1,763   1,848   1,887  
 
 
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:
 
    Q2 ’17     Q1 ’17     2016     Q4 ’16     Q3 ’16     Q2 ’16     Q1 ’16     Income Statement Classification
(In $ millions)

Employee termination benefits(1)

2 2 11 3 3 5 Other charges (gains), net
Plant/office closures (3 ) 57 4 1 2 1 Cost of sales / SG&A / Other charges (gains), net
Business optimization 7 3 1 1 2 Cost of sales / SG&A
Asset impairments 2 1 1 Other charges (gains), net
(Gain) loss on disposition of business and assets, net 2 (4 ) (2 ) (2 ) (Gain) loss on disposition, net
Commercial disputes (2 ) (2 ) Other charges (gains), net
Write-off of other productive assets 4 1 1 2 Cost of sales / R&D
Employee benefit plan changes 1 1 1 Cost of sales / SG&A / R&D
Actuarial (gain) loss on pension and postretirement plans 102 102 Cost of sales / SG&A / R&D
Start-up costs 2 1 1 Cost of sales
Mergers and acquisitions 7 9 3 2 1 Cost of sales / SG&A
InfraServ ownership change 8 Other charges (gains), net / Equity in net earnings (loss) of
affiliates
Other 1   (3 )       Equity in net earnings (loss) of affiliates
Certain Items attributable to Celanese Corporation 18   65   130   106   7   9 8
______________________________

(1)

  Primarily associated with site shutdown costs.
 
 
Table 9
Return on Invested Capital (Adjusted) – Presentation of a
Non-GAAP Measure – Unaudited
 
            2016

(In $ millions,
except percentages)

Net earnings (loss) attributable to Celanese Corporation 900
 

Adjusted EBIT (Table 1)

1,278
Adjusted effective tax rate (Table 3a) 17 %
Adjusted EBIT tax effected 1,061
 
2016 2015 Average
(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt –
third parties and affiliates
118 513 316
Long-term debt, net of unamortized deferred financing costs 2,890 2,468 2,679
Celanese Corporation stockholders’ equity 2,588 2,378 2,483  
Invested capital 5,478  
 
Return on invested capital (adjusted) 19.4 %
 
Net earnings (loss) attributable to Celanese Corporation as a
percentage of invested capital
16.4 %

Celanese Corporation
Investor Relations
Surabhi
Varshney, +1-972-443-3078
Surabhi.Varshney@celanese.com
or
Media
– U.S.

Travis Jacobsen, +1-972-443-3750
William.Jacobsen@celanese.com
or
Media
– Europe

Jens Kurth, +49(0)69 45009 1574
Jens.Kurth@celanese.com

Source: Celanese Corporation