Description of the Company and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Estimates and Assumptions

Estimates and Assumptions

The preparation of unaudited interim consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues, expenses and allocated charges during the reporting period. Significant estimates pertain to impairments of goodwill, intangible assets and other long-lived assets, purchase price allocations, restructuring costs and other (charges) gains, net, income taxes, pension and other postretirement benefits, asset retirement obligations, environmental liabilities and loss contingencies, among others. Actual results could differ from those estimates.

Changes in accounting policy regarding pension and other postretirement benefits

Change in accounting policy regarding pension and other postretirement benefits

Effective January 1, 2013, the Company elected to change its accounting policy for recognizing actuarial gains and losses and changes in the fair value of plan assets for its defined benefit pension plans and other postretirement benefit plans. Previously, the Company recognized the actuarial gains and losses as a component of Accumulated other comprehensive income (loss), net within the consolidated balance sheets on an annual basis and amortized the gains and losses into operating results over the average remaining service period to retirement date for active plan participants or, for retired participants, the average remaining life expectancy. For defined benefit pension plans, the unrecognized gains and losses were amortized when the net gains and losses exceeded 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. For other postretirement benefits, amortization occurred when the net gains and losses exceeded 10% of the accumulated postretirement benefit obligation at the beginning of the year.

Previously, differences between the actual rate of return on plan assets and the long-term expected rate of return on plan assets were not generally recognized in net periodic benefit cost in the year that the difference occurred. These differences were deferred and amortized into net periodic benefit cost over the average remaining future service period of employees. The asset gains and losses subject to amortization and the long-term expected return on plan assets were previously calculated using a five-year smoothing of asset gains and losses referred to as the market-related value to stabilize variability in the plan asset values.

The Company now applies the long-term expected rate of return to the fair value of plan assets and immediately recognizes the change in fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is required to be remeasured. Events requiring a plan remeasurement will be recognized in the quarter in which such remeasurement event occurs. The remaining components of the Company's net periodic benefit cost are recorded on a quarterly basis. While the Company's historical policy of recognizing the change in fair value of plan assets and net actuarial gains and losses is considered acceptable under US GAAP, the Company believes the new policy is preferable as it eliminates the delay in recognizing gains and losses within operating results. This change improves transparency within the Company's operating results by immediately recognizing the effects of economic and interest rate trends on plan investments and assumptions in the year these gains and losses are actually incurred. The policy changes have no impact on future pension and postretirement benefit plan funding or pension and postretirement benefits paid to participants. Financial information for all periods presented has been retrospectively adjusted.

In connection with the changes in accounting policy for pension and other postretirement benefits and in an attempt to properly match the actual operational expenses each business segment is incurring, the Company changed its allocation of net periodic benefit cost. Previously, the Company allocated all components of net periodic benefit cost to each business segment on a ratable basis. The Company now allocates only the service cost and amortization of prior service cost components of its pension and postretirement plans to its business segments. All other components of net periodic benefit cost are recorded to Other Activities. The components of net periodic benefit cost that are no longer allocated to each business segment include interest cost, expected return on assets and net actuarial gains and losses as these components are considered financing activities managed at the corporate level. The Company believes the revised expense allocation more appropriately matches the cost incurred for active employees to the respective business segment. Business segment information for prior periods has been retrospectively adjusted (Note 18).

The retrospective effect of the change in accounting policy for pension and other postretirement benefits to the consolidated statement of operations is as follows:

	Three Months Ended March 31, 2012
	As Previously Reported		Effect of Change		As Adjusted
	(In $ millions, except per share data)
Cost of sales	(1,363	)	4		(1,359	)
Gross profit	270		4		274
Selling, general and administrative expenses	(134	)	8		(126	)
Research and development expenses	(26	)	1		(25	)
Operating profit (loss)	98		13		111
Earnings (loss) from continuing operations before tax	107		13		120
Income tax (provision) benefit	76		(3	)	73
Earnings (loss) from continuing operations	183		10		193
Net earnings (loss)	183		10		193
Net earnings (loss) attributable to Celanese Corporation	183		10		193
Earnings (loss) per common share - basic
Continuing operations	1.17		0.06		1.23
Discontinued operations	—		—		—
Net earnings (loss) - basic	1.17		0.06		1.23
Earnings (loss) per common share - diluted
Continuing operations	1.15		0.06		1.21
Discontinued operations	—		—		—
Net earnings (loss) - diluted	1.15		0.06		1.21

The retrospective effect of the change in accounting policy for pension and other postretirement benefits to the consolidated statement of comprehensive income (loss) is as follows:

	Three Months Ended March 31, 2012
	As Previously Reported	Effect of Change		As Adjusted
	(In $ millions)
Net earnings (loss)	183	10		193
Pension and postretirement benefits	6	(10	)	(4	)
Total other comprehensive income (loss), net of tax	33	(10	)	23
Total comprehensive income (loss), net of tax	216	—		216
Comprehensive (income) loss attributable to Celanese Corporation	216	—		216

The retrospective effect of the change in accounting policy for pension and other postretirement benefits to the consolidated balance sheet is as follows:

	As of December 31, 2012
	As Previously Reported		Effect of Change		As Adjusted
	(In $ millions)
Retained earnings	2,986		(993	)	1,993
Accumulated other comprehensive income (loss), net	(1,082	)	993		(89	)

The cumulative effect of the change in accounting policy for pension and other postretirement benefits on Retained earnings as of December 31, 2011 was a decrease of $760 million, with an equivalent increase to Accumulated other comprehensive income.

The retrospective effect of the change in accounting policy for pension and other postretirement benefits to the consolidated statement of cash flows is as follows:

	Three Months Ended March 31, 2012
	As Previously Reported		Effect of Change		As Adjusted
	(In $ millions)
Net earnings (loss)	183		10		193
Pension and postretirement benefit expense	—		3		3
Pension and postretirement contributions	—		(66	)	(66	)
Deferred income taxes, net	(94	)	3		(91	)
Other liabilities	(82	)	50		(32	)

The retrospective effect of the change in accounting policy for pension and other postretirement benefits to the business segment financial information (Note 18) is as follows:

	Three Months Ended March 31, 2012
	As Previously Reported		Effect of Change	As Adjusted
	(In $ millions)
Operating Profit (Loss)
Advanced Engineered Materials	21		3	24
Consumer Specialties	39		1	40
Industrial Specialties	19		1	20
Acetyl Intermediates	60		2	62
Other Activities	(41	)	6	(35	)
Total	98		13	111