Consolidating Guarantor Financial Information

3 Months Ended

Mar. 31, 2020

Consolidating Guarantor Financial Information [Abstract]

Consolidating Guarantor Financial Information

The Senior Notes were issued by Celanese US ("Issuer") and are guaranteed by Celanese Corporation ("Parent Guarantor") and the Subsidiary Guarantors (Note 8). The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor. The Parent Guarantor and Subsidiary Guarantors have guaranteed the Notes fully and unconditionally and jointly and severally.

For cash management purposes, the Company transfers cash between the Parent Guarantor, Issuer, Subsidiary Guarantors and non-guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest on the Company's outstanding debt, Common Stock dividends and Common Stock repurchases. The unaudited interim consolidating statements of cash flows for the three months ended March 31, 2020 and 2019 present such intercompany financing activities, contributions and dividends consistent with how such activity would be presented in a stand-alone statement of cash flows.

The Company has not presented separate financial information and other disclosures for each of its Subsidiary Guarantors because it believes such financial information and other disclosures would not provide investors with any additional information that would be material in evaluating the sufficiency of the guarantees.

The unaudited interim consolidating financial statements for the Parent Guarantor, the Issuer, the Subsidiary Guarantors and the non-guarantors are as follows:

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF OPERATIONS



	Three Months Ended March 31, 2020
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net sales	—		—		560		1,203		(303	)	1,460
Cost of sales	—		—		(460	)	(946	)	294		(1,112	)
Gross profit	—		—		100		257		(9	)	348
Selling, general and administrative expenses	—		—		(54	)	(71	)	—		(125	)
Amortization of intangible assets	—		—		(2	)	(3	)	—		(5	)
Research and development expenses	—		—		(7	)	(10	)	—		(17	)
Other (charges) gains, net	—		—		(8	)	2		—		(6	)
Foreign exchange gain (loss), net	—		—		(1	)	—		—		(1	)
Gain (loss) on disposition of businesses and assets, net	—		—		(2	)	2		—		—
Operating profit (loss)	—		—		26		177		(9	)	194
Equity in net earnings (loss) of affiliates	226		222		188		51		(630	)	57
Non-operating pension and other postretirement employee benefit (expense) income	—		—		25		3		—		28
Interest expense	(8	)	(9	)	(30	)	(5	)	24		(28	)
Interest income	—		13		10		4		(25	)	2
Dividend income - equity investments	—		—		—		36		1		37
Other income (expense), net	—		8		1		(7	)	—		2
Earnings (loss) from continuing operations before tax	218		234		220		259		(639	)	292
Income tax (provision) benefit	—		(8	)	5		(63	)	1		(65	)
Earnings (loss) from continuing operations	218		226		225		196		(638	)	227
Earnings (loss) from operation of discontinued operations	—		—		—		(7	)	—		(7	)
Income tax (provision) benefit from discontinued operations	—		—		—		—		—		—
Earnings (loss) from discontinued operations	—		—		—		(7	)	—		(7	)
Net earnings (loss)	218		226		225		189		(638	)	220
Net (earnings) loss attributable to noncontrolling interests	—		—		—		(2	)	—		(2	)
Net earnings (loss) attributable to Celanese Corporation	218		226		225		187		(638	)	218

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF OPERATIONS



	Three Months Ended March 31, 2019
	Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net sales	—	—		624		1,373		(310	)	1,687
Cost of sales	—	—		(458	)	(1,077	)	301		(1,234	)
Gross profit	—	—		166		296		(9	)	453
Selling, general and administrative expenses	—	—		(40	)	(80	)	—		(120	)
Amortization of intangible assets	—	—		(2	)	(4	)	—		(6	)
Research and development expenses	—	—		(6	)	(10	)	—		(16	)
Other (charges) gains, net	—	—		—		4		—		4
Foreign exchange gain (loss), net	—	—		—		5		—		5
Gain (loss) on disposition of businesses and assets, net	—	—		(2	)	2		—		—
Operating profit (loss)	—	—		116		213		(9	)	320
Equity in net earnings (loss) of affiliates	337	337		217		43		(884	)	50
Non-operating pension and other postretirement employee benefit (expense) income	—	—		15		2		—		17
Interest expense	—	(10	)	(31	)	(7	)	17		(31	)
Interest income	—	13		2		3		(17	)	1
Dividend income - equity investments	—	—		—		32		—		32
Other income (expense), net	—	1		—		(5	)	—		(4	)
Earnings (loss) from continuing operations before tax	337	341		319		281		(893	)	385
Income tax (provision) benefit	—	(4	)	(7	)	(36	)	1		(46	)
Earnings (loss) from continuing operations	337	337		312		245		(892	)	339
Earnings (loss) from operation of discontinued operations	—	—		(1	)	—		—		(1	)
Income tax (provision) benefit from discontinued operations	—	—		—		—		—		—
Earnings (loss) from discontinued operations	—	—		(1	)	—		—		(1	)
Net earnings (loss)	337	337		311		245		(892	)	338
Net (earnings) loss attributable to noncontrolling interests	—	—		—		(1	)	—		(1	)
Net earnings (loss) attributable to Celanese Corporation	337	337		311		244		(892	)	337

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)



	Three Months Ended March 31, 2020
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net earnings (loss)	218		226		225		189		(638	)	220
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss)	(2	)	(2	)	(44	)	(54	)	100		(2	)
Gain (loss) on cash flow hedges	(39	)	(39	)	(1	)	—		40		(39	)
Total other comprehensive income (loss), net of tax	(41	)	(41	)	(45	)	(54	)	140		(41	)
Total comprehensive income (loss), net of tax	177		185		180		135		(498	)	179
Comprehensive (income) loss attributable to noncontrolling interests	—		—		—		(2	)	—		(2	)
Comprehensive income (loss) attributable to Celanese Corporation	177		185		180		133		(498	)	177



	Three Months Ended March 31, 2019
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net earnings (loss)	337		337		311		245		(892	)	338
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss)	7		7		(18	)	(24	)	35		7
Gain (loss) on cash flow hedges	(3	)	(3	)	6		8		(11	)	(3	)
Total other comprehensive income (loss), net of tax	4		4		(12	)	(16	)	24		4
Total comprehensive income (loss), net of tax	341		341		299		229		(868	)	342
Comprehensive (income) loss attributable to noncontrolling interests	—		—		—		(1	)	—		(1	)
Comprehensive income (loss) attributable to Celanese Corporation	341		341		299		228		(868	)	341

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATING BALANCE SHEET



	As of March 31, 2020
	Parent Guarantor	Issuer	Subsidiary Guarantors	Non- Guarantors	Eliminations		Consolidated
	(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents	—	20	21	529	—		570
Trade receivables - third party and affiliates	—	—	131	866	(144	)	853
Non-trade receivables, net	57	1,521	2,136	786	(4,193	)	307
Inventories, net	—	—	366	725	(55	)	1,036
Marketable securities	—	—	22	16	—		38
Other assets	—	43	14	55	(61	)	51
Total current assets	57	1,584	2,690	2,977	(4,453	)	2,855
Investments in affiliates	4,236	5,375	4,316	851	(13,797	)	981
Property, plant and equipment, net	—	—	1,476	2,202	—		3,678
Operating lease right-of-use assets	—	—	51	150	—		201
Deferred income taxes	—	—	—	96	(5	)	91
Other assets	—	1,683	224	435	(1,961	)	381
Goodwill	—	—	399	657	—		1,056
Intangible assets, net	—	—	123	179	—		302
Total assets	4,293	8,642	9,279	7,547	(20,216	)	9,545
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	1,845	720	1,384	361	(3,561	)	749
Trade payables - third party and affiliates	—	—	299	569	(144	)	724
Other liabilities	—	70	162	383	(193	)	422
Income taxes payable	—	—	436	97	(500	)	33
Total current liabilities	1,845	790	2,281	1,410	(4,398	)	1,928
Noncurrent Liabilities
Long-term debt	—	3,516	1,677	90	(1,927	)	3,356
Deferred income taxes	—	7	101	155	(5	)	258
Uncertain tax positions	—	2	—	169	(10	)	161
Benefit obligations	—	—	252	316	—		568
Operating lease liabilities	—	—	41	134	—		175
Other liabilities	—	91	90	115	(33	)	263
Total noncurrent liabilities	—	3,616	2,161	979	(1,975	)	4,781
Total Celanese Corporation stockholders' equity	2,448	4,236	4,837	4,770	(13,843	)	2,448
Noncontrolling interests	—	—	—	388	—		388
Total equity	2,448	4,236	4,837	5,158	(13,843	)	2,836
Total liabilities and equity	4,293	8,642	9,279	7,547	(20,216	)	9,545

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATING BALANCE SHEET



	As of December 31, 2019
	Parent Guarantor	Issuer	Subsidiary Guarantors	Non- Guarantors	Eliminations		Consolidated
	(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents	—	—	16	447	—		463
Trade receivables - third party and affiliates	—	—	122	851	(123	)	850
Non-trade receivables, net	56	1,188	1,925	743	(3,581	)	331
Inventories, net	—	—	360	725	(47	)	1,038
Marketable securities	—	—	24	16	—		40
Other assets	—	36	11	38	(42	)	43
Total current assets	56	1,224	2,458	2,820	(3,793	)	2,765
Investments in affiliates	4,064	5,217	4,206	841	(13,353	)	975
Property, plant and equipment, net	—	—	1,461	2,252	—		3,713
Operating lease right-of-use assets	—	—	50	153	—		203
Deferred income taxes	—	—	—	101	(5	)	96
Other assets	—	1,661	195	445	(1,963	)	338
Goodwill	—	—	399	675	—		1,074
Intangible assets, net	—	—	125	187	—		312
Total assets	4,120	8,102	8,894	7,474	(19,114	)	9,476
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	1,596	374	1,089	385	(2,948	)	496
Trade payables - third party and affiliates	17	—	333	553	(123	)	780
Other liabilities	—	49	188	397	(173	)	461
Income taxes payable	—	—	439	80	(502	)	17
Total current liabilities	1,613	423	2,049	1,415	(3,746	)	1,754
Noncurrent Liabilities
Long-term debt	—	3,565	1,677	101	(1,934	)	3,409
Deferred income taxes	—	3	101	158	(5	)	257
Uncertain tax positions	—	—	—	169	(4	)	165
Benefit obligations	—	—	257	332	—		589
Operating lease liabilities	—	—	40	140	1		181
Other liabilities	—	47	93	118	(35	)	223
Total noncurrent liabilities	—	3,615	2,168	1,018	(1,977	)	4,824
Total Celanese Corporation stockholders' equity	2,507	4,064	4,677	4,650	(13,391	)	2,507
Noncontrolling interests	—	—	—	391	—		391
Total equity	2,507	4,064	4,677	5,041	(13,391	)	2,898
Total liabilities and equity	4,120	8,102	8,894	7,474	(19,114	)	9,476

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF CASH FLOWS



	Three Months Ended March 31, 2020
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net cash provided by (used in) operating activities	241		(280	)	129		169		—		259
Investing Activities
Capital expenditures on property, plant and equipment	—		—		(69	)	(50	)	—		(119	)
Return of capital from subsidiary	—		—		5		—		(5	)	—
Intercompany loan receipts (disbursements)	—		—		(19	)	—		19		—
Other, net	—		—		—		(9	)	—		(9	)
Net cash provided by (used in) investing activities	—		—		(83	)	(59	)	14		(128	)
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less	—		—		(20	)	—		(19	)	(39	)
Proceeds from short-term borrowings	—		300		—		—		—		300
Repayments of long-term debt	—		—		(1	)	(8	)	—		(9	)
Purchases of treasury stock, including related fees	(167	)	—		—		—		—		(167	)
Common stock dividends	(74	)	—		—		—		—		(74	)
Return of capital to parent	—		—		—		(5	)	5		—
Distributions to noncontrolling interests	—		—		—		(5	)	—		(5	)
Other, net	—		—		(20	)	(2	)	—		(22	)
Net cash provided by (used in) financing activities	(241	)	300		(41	)	(20	)	(14	)	(16	)
Exchange rate effects on cash and cash equivalents	—		—		—		(8	)	—		(8	)
Net increase (decrease) in cash and cash equivalents	—		20		5		82		—		107
Cash and cash equivalents as of beginning of period	—		—		16		447		—		463
Cash and cash equivalents as of end of period	—		20		21		529		—		570

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF CASH FLOWS



	Three Months Ended March 31, 2019
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net cash provided by (used in) operating activities	282		26		1,032		528		(1,561	)	307
Investing Activities
Capital expenditures on property, plant and equipment	—		—		(42	)	(37	)	—		(79	)
Acquisitions, net of cash acquired	—		—		(31	)	(60	)	—		(91	)
Return of capital from subsidiary	—		—		4		—		(4	)	—
Intercompany loan receipts (disbursements)	—		—		(646	)	—		646		—
Other, net	—		—		2		(9	)	—		(7	)
Net cash provided by (used in) investing activities	—		—		(713	)	(106	)	642		(177	)
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less	—		246		(9	)	(4	)	(36	)	197
Proceeds from short-term borrowings	—		—		—		610		(610	)	—
Repayments of short-term borrowings	—		—		—		(12	)	—		(12	)
Repayments of long-term debt	—		—		—		(7	)	—		(7	)
Purchases of treasury stock, including related fees	(212	)	—		—		—		—		(212	)
Dividends to parent	—		(272	)	(251	)	(1,038	)	1,561		—
Common stock dividends	(70	)	—		—		—		—		(70	)
Return of capital to parent	—		—		—		(4	)	4		—
Distributions to noncontrolling interests	—		—		—		(4	)	—		(4	)
Other, net	—		—		(20	)	(2	)	—		(22	)
Net cash provided by (used in) financing activities	(282	)	(26	)	(280	)	(461	)	919		(130	)
Exchange rate effects on cash and cash equivalents	—		—		—		2		—		2
Net increase (decrease) in cash and cash equivalents	—		—		39		(37	)	—		2
Cash and cash equivalents as of beginning of period	—		—		30		409		—		439
Cash and cash equivalents as of end of period	—		—		69		372		—		441