EX-99.2 3 q220208-kex992.htm EXHIBIT 99.2 Exhibit
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Exhibit 99.2

Non-US GAAP Financial Measures and Supplemental Information
July 28, 2020
In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.
Purpose
The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.
Presentation
This document presents the Company's three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.
Use of Non-US GAAP Financial Measures
From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.
Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Financial Information/Financial Document Library page of our website, investors.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.
Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Financial Information/Financial Document Library page of our website, investors.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.
This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.
Specific Measures Used
This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free

1

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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.

2

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Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway"). We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations.
Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.
Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our stockholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns.
Supplemental Information
Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:
Net sales for each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for each of our business segments.
Cash dividends received from our equity investments.
For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as NCI. Beginning in 2014, this includes Fairway for which the Company's ownership percentage is 50%. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.
Results Unaudited
The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

3

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Table 1
Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions)
Net earnings (loss) attributable to Celanese Corporation
107

 
218

 
852

 
43

 
263

 
209

 
337

(Earnings) loss from discontinued operations
3

 
7

 
6

 
(1
)
 
5

 
1

 
1

Interest income
(1
)
 
(2
)
 
(6
)
 
(2
)
 
(1
)
 
(2
)
 
(1
)
Interest expense
27

 
28

 
115

 
28

 
27

 
29

 
31

Refinancing expense

 

 
4

 

 

 
4

 

Income tax provision (benefit)
35

 
65

 
124

 
(3
)
 
53

 
28

 
46

Certain Items attributable to Celanese Corporation (Table 8)
28

 
26

 
381

 
238

 
29

 
107

 
7

Adjusted EBIT
199

 
342

 
1,476

 
303

 
376

 
376

 
421

Depreciation and amortization expense(1)
86

 
83

 
329

 
84

 
82

 
82

 
81

Operating EBITDA
285

 
425

 
1,805

 
387

 
458

 
458

 
502

 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions)
Engineered Materials

 
2

 
4

 
2

 
1

 

 
1

Acetate Tow

 

 
9

 
2

 
5

 
2

 

Acetyl Chain
1

 

 
10

 
3

 
6

 

 
1

Other Activities(2)

 

 

 

 

 

 

Accelerated depreciation and amortization expense
1

 
2

 
23

 
7

 
12

 
2

 
2

Depreciation and amortization expense(1)
86

 
83

 
329

 
84

 
82

 
82

 
81

Total depreciation and amortization expense
87

 
85

 
352

 
91

 
94

 
84

 
83

______________________________
(1) 
Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.
(2) 
Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

4

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited
 
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Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
(13
)
 
(3.1
)%
 
102

 
18.1
%
 
446

 
18.7
%
 
88

 
16.3
%
 
111

 
18.8
%
 
103

 
17.4
 %
 
144

 
21.7
%
Acetate Tow
31

 
24.4
 %
 
27

 
20.9
%
 
52

 
8.2
%
 
22

 
14.9
%
 
34

 
21.5
%
 
(44
)
 
(26.8
)%
 
40

 
24.1
%
Acetyl Chain(1)
121

 
18.3
 %
 
135

 
16.9
%
 
678

 
20.0
%
 
108

 
14.0
%
 
180

 
20.8
%
 
188

 
21.7
 %
 
202

 
22.7
%
Other Activities(2)
(56
)
 
 
 
(70
)
 
 
 
(342
)
 
 
 
(150
)
 
 
 
(65
)
 
 
 
(61
)
 
 
 
(66
)
 
 
Total
83

 
7.0
 %
 
194

 
13.3
%

834

 
13.2
%
 
68

 
4.7
%
 
260

 
16.4
%
 
186

 
11.7
 %
 
320

 
19.0
%
Less: Net Earnings (Loss) Attributable to NCI(1)
2

 
 
 
2

 
 
 
6

 
 
 
2

 
 
 
2

 
 
 
1

 
 
 
1

 
 
Operating Profit (Loss) Attributable to Celanese Corporation
81

 
6.8
 %
 
192

 
13.2
%
 
828

 
13.1
%
 
66

 
4.6
%
 
258


16.3
%
 
185

 
11.6
 %
 
319

 
18.9
%
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
(13
)
 
(3.1
)%
 
102

 
18.1
%
 
446

 
18.7
%
 
88

 
16.3
%
 
111

 
18.8
%
 
103

 
17.4
 %
 
144

 
21.7
%
Acetate Tow
31

 
24.4
 %
 
27

 
20.9
%
 
52

 
8.2
%
 
22

 
14.9
%
 
34

 
21.5
%
 
(44
)
 
(26.8
)%
 
40

 
24.1
%
Acetyl Chain(1)
119

 
18.0
 %
 
133

 
16.6
%
 
672

 
19.8
%
 
106

 
13.7
%
 
178

 
20.5
%
 
187

 
21.6
 %
 
201

 
22.6
%
Other Activities(2)
(56
)
 
 
 
(70
)
 
 
 
(342
)
 


 
(150
)
 
 
 
(65
)
 
 
 
(61
)
 
 
 
(66
)
 
 
Total
81

 
6.8
 %
 
192

 
13.2
%
 
828

 
13.1
%
 
66

 
4.6
%
 
258

 
16.3
%
 
185

 
11.6
 %
 
319

 
18.9
%
Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
26

 
 
 
53

 
 
 
168

 
 
 
45

 
 
 
41

 
 
 
36

 
 
 
46

 
 
Acetate Tow
32

 
 
 
37

 
 
 
112

 
 
 
24

 
 
 
27

 
 
 
29

 
 
 
32

 
 
Acetyl Chain

 
 
 
1

 
 
 
5

 
 
 
1

 
 
 
2

 
 
 
1

 
 
 
1

 
 
Other Activities(2)
5

 
 
 
5

 
 
 
2

 
 
 

 
 
 
2

 
 
 
1

 
 
 
(1
)
 
 
Total
63

 
 
 
96

 
 
 
287

 
 
 
70

 
 
 
72

 
 
 
67

 
 
 
78

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

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetate Tow

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Acetyl Chain

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
 
Other Activities(2)
27

 
 
 
28

 
 
 
(20
)
 
 
 
(71
)
 
 
 
17

 
 
 
17

 
 
 
17

 
 
Total
27

 
 
 
28

 
 
 
(20
)
 
 
 
(71
)
 
 
 
17

 
 
 
17

 
 
 
17

 
 
Certain Items Attributable to Celanese Corporation (Table 8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
27

 
 
 
10

 
 
 
7

 
 
 
3

 
 
 
2

 
 
 
9

 
 
 
(7
)
 
 
Acetate Tow
1

 
 
 
3

 
 
 
104

 
 
 
8

 
 
 
10

 
 
 
86

 
 
 

 
 
Acetyl Chain
(3
)
 
 
 
5

 
 
 
50

 
 
 
37

 
 
 
11

 
 
 
1

 
 
 
1

 
 
Other Activities(2)
3

 
 
 
8

 
 
 
220

 
 
 
190

 
 
 
6

 
 
 
11

 
 
 
13

 
 
Total
28

 
 
 
26

 
 
 
381

 
 
 
238

 
 
 
29

 
 
 
107

 
 
 
7

 
 
Adjusted EBIT / Adjusted EBIT Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
40

 
9.5
 %
 
165

 
29.3
%
 
621

 
26.0
%
 
136

 
25.2
%
 
154

 
26.1
%
 
148

 
25.0
 %
 
183

 
27.6
%
Acetate Tow
64

 
50.4
 %
 
67

 
51.9
%
 
268

 
42.1
%
 
54

 
36.5
%
 
71

 
44.9
%
 
71

 
43.3
 %
 
72

 
43.4
%
Acetyl Chain
116

 
17.5
 %
 
139

 
17.4
%
 
727

 
21.4
%
 
144

 
18.7
%
 
191

 
22.0
%
 
189

 
21.8
 %
 
203

 
22.8
%
Other Activities(2)
(21
)
 
 
 
(29
)
 
 
 
(140
)
 
 
 
(31
)
 


 
(40
)
 
 
 
(32
)
 
 
 
(37
)
 
 
Total
199

 
16.7
 %
 
342

 
23.4
%
 
1,476

 
23.4
%
 
303

 
21.2
%
 
376

 
23.7
%
 
376

 
23.6
 %
 
421

 
25.0
%
___________________________
(1) 
Net earnings (loss) attributable to NCI is included within the Acetyl Chain segment.
(2) 
Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

5

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)
 
celaneseimagea19.jpg

 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions, except percentages)
Depreciation and Amortization Expense(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
32

 
 
 
32

 
 
 
127

 
 
 
33

 
 
 
32

 
 
 
31

 
 
 
31

 
 
Acetate Tow
9

 
 
 
8

 
 
 
36

 
 
 
8

 
 
 
9

 
 
 
9

 
 
 
10

 
 
Acetyl Chain
41

 
 
 
39

 
 
 
151

 
 
 
39

 
 
 
37

 
 
 
38

 
 
 
37

 
 
Other Activities(2) 
4

 
 
 
4

 
 
 
15

 
 
 
4

 
 
 
4

 
 
 
4

 
 
 
3

 
 
Total
86

 
 
 
83

 
 
 
329

 
 
 
84

 
 
 
82

 
 
 
82

 
 
 
81

 
 
Operating EBITDA / Operating EBITDA Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineered Materials
72

 
17.1
%
 
197

 
35.0
%
 
748

 
31.3
%
 
169

 
31.4
%
 
186

 
31.5
%
 
179

 
30.2
%
 
214

 
32.3
%
Acetate Tow
73

 
57.5
%
 
75

 
58.1
%
 
304

 
47.8
%
 
62

 
41.9
%
 
80

 
50.6
%
 
80

 
48.8
%
 
82

 
49.4
%
Acetyl Chain
157

 
23.7
%
 
178

 
22.3
%
 
878

 
25.9
%
 
183

 
23.7
%
 
228

 
26.3
%
 
227

 
26.2
%
 
240

 
27.0
%
Other Activities(2)
(17
)
 
 
 
(25
)
 
 
 
(125
)
 
 
 
(27
)
 
 
 
(36
)
 
 
 
(28
)
 
 
 
(34
)
 
 
Total
285

 
23.9
%
 
425

 
29.1
%
 
1,805

 
28.7
%
 
387

 
27.0
%
 
458

 
28.9
%
 
458

 
28.8
%
 
502

 
29.8
%
___________________________
(1) 
Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.
(2) 
Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

6

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Table 3
Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
 
 
per share
 
(In $ millions, except per share data)
Earnings (loss) from continuing operations attributable to Celanese Corporation
110

 
0.93

 
225

 
1.88

 
858

 
6.89

 
42

 
0.35

 
268

 
2.17

 
210

 
1.67

 
338

 
2.64

Income tax provision (benefit)
35

 
 
 
65

 
 
 
124

 
 
 
(3
)
 
 
 
53

 
 
 
28

 
 
 
46

 
 
Earnings (loss) from continuing operations before tax
145

 
 
 
290

 
 
 
982

 
 
 
39

 
 
 
321

 
 
 
238

 
 
 
384

 
 
Certain Items attributable to Celanese Corporation (Table 8)
28

 
 
 
26

 
 
 
381

 
 
 
238

 
 
 
29

 
 
 
107

 
 
 
7

 
 
Refinancing and related expenses

 
 
 

 
 
 
4

 
 
 

 
 
 

 
 
 
4

 
 
 

 
 
Adjusted earnings (loss) from continuing operations before tax
173

 
 
 
316

 
 
 
1,367

 
 
 
277

 
 
 
350

 
 
 
349

 
 
 
391

 
 
Income tax (provision) benefit on adjusted earnings(1)
(18
)
 
 
 
(41
)
 
 
 
(178
)
 
 
 
(36
)
 
 
 
(38
)
 
 
 
(49
)
 
 
 
(55
)
 
 
Adjusted earnings (loss) from continuing operations(2)
155

 
1.30

 
275

 
2.29

 
1,189

 
9.53

 
241

 
1.99

 
312

 
2.53

 
300

 
2.38

 
336

 
2.62

 
Diluted shares (in millions)(3)
Weighted average shares outstanding
118.3

 
 
 
119.3

 
 
 
123.9

 
 
 
120.3

 
 
 
122.7

 
 
 
125.3

 
 
 
127.5

 
 
Incremental shares attributable to equity awards
0.5

 
 
 
0.6

 
 
 
0.8

 
 
 
0.6

 
 
 
0.6

 
 
 
0.5

 
 
 
0.7

 
 
Total diluted shares
118.8

 


 
119.9

 
 
 
124.7

 
 
 
120.9

 
 
 
123.3

 
 
 
125.8

 
 
 
128.2

 
 
______________________________
(1) 
Calculated using adjusted effective tax rates (Table 3a) as follows:
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In percentages)
Adjusted effective tax rate
10
 
 
 
13
 
 
 
13
 
 
 
13
 
 
 
11
 
 
 
14
 
 
 
14
 
 
(2) 
Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.
 
 
Actual Plan Asset Returns
 
Expected Plan Asset Returns
 
 
(In percentages)
2019
 
16.7

 
6.5

(3) 
Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.

7

celaneseimagea20.jpg

Table 3a
Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited
 
Estimated
 
Actual
 
2020
 
2019
 
(In percentages)
US GAAP annual effective tax rate
18

 
13

Discrete quarterly recognition of GAAP items(1)
(5
)
 

Tax impact of other charges and adjustments(2)
(1
)
 

Utilization of foreign tax credits
(2
)
 
(3
)
Changes in valuation allowances, excluding impact of other charges and adjustments(3)
1

 
3

Other(4)
1

 

Adjusted tax rate
12

 
13

______________________________
Note: As part of the year-end reconciliation, we updated the reconciliation of the GAAP effective tax rate for actual results.
(1) 
Such as changes in tax laws (including US tax reform), deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.
(2) 
Reflects the tax impact on pre-tax adjustments presented in Certain Items (Table 8), which are excluded from pre-tax income for adjusted earnings per share purposes.
(3) 
Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.
(4) 
Tax impacts related to full-year forecasted tax opportunities and related costs.

8

celaneseimagea20.jpg

Table 4
Net Sales by Segment - Unaudited
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions)
Engineered Materials
420

 
563

 
2,386

 
539

 
591

 
593

 
663

Acetate Tow
127

 
129

 
636

 
148

 
158

 
164

 
166

Acetyl Chain
662

 
799

 
3,392

 
771

 
867

 
865

 
889

Intersegment eliminations(1)
(16
)
 
(31
)
 
(117
)
 
(26
)
 
(30
)
 
(30
)
 
(31
)
Net sales
1,193

 
1,460

 
6,297

 
1,432

 
1,586

 
1,592

 
1,687

___________________________
(1) 
Includes intersegment sales primarily related to the Acetyl Chain.

9

celaneseimagea20.jpg

Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
Three Months Ended June 30, 2020 Compared to Three Months Ended March 31, 2020
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
(25
)
 

 
 
 
(25
)
 
Acetate Tow
(3
)
 
1

 
 
 
(2
)
 
Acetyl Chain
(6
)
 
(11
)
 
 
 
(17
)
(1) 
 
 
 
 
 
 
 
 
 
 
 
Total Company
(13
)
 
(6
)
 
 
1
 
(18
)
 
Three Months Ended March 31, 2020 Compared to Three Months Ended December 31, 2019
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
4

 

 
 
 
4

 
Acetate Tow
(9
)
 
(4
)
 
 
 
(13
)
 
Acetyl Chain
5

 
(1
)
 
 
 
4

 
 
 
 
 
 
 
 
 
 
 
 
Total Company
3

 
(1
)
 
 
 
2

 
Three Months Ended December 31, 2019 Compared to Three Months Ended September 30, 2019
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
(9
)
 
 
 
 
(9
)
 
Acetate Tow
(6
)
 
 
 
 
(6
)
 
Acetyl Chain
(11
)
 
 
 
 
(11
)
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
(10
)
 
 
 
 
(10
)
 
Three Months Ended September 30, 2019 Compared to Three Months Ended June 30, 2019
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
2

 
(2
)
 
(1
)
 
 
(1
)
 
Acetate Tow
(2
)
 
(1
)
 

 
 
(3
)
 
Acetyl Chain
1

 

 
(1
)
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Total Company
2

 
(1
)
 
(1
)
 
 

 


 

Three Months Ended June 30, 2019 Compared to Three Months Ended March 31, 2019
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
(7
)
 
(3
)
 
(1
)
 
 
(11
)
 
Acetate Tow
(1
)
 

 

 
 
(1
)
 
Acetyl Chain
2

 
(4
)
 
(1
)
 
 
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
(2
)
 
(3
)
 
(1
)
 
 
(6
)
 
Three Months Ended March 31, 2019 Compared to Three Months Ended December 31, 2018
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
 
(In percentages)
 
Engineered Materials
5
 
2

 
 
 
7

(2) 
Acetate Tow
1
 
2

 
 
 
3

 
Acetyl Chain
5
 
(10
)
 
 
 
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
Total Company
5
 
(5
)
 
 
 

 
________________________
(1) 
2020 includes the effect of the acquisition of the Elotex® brand.
(2) 
2019 includes the effect of the acquisition of Next Polymers Ltd.

10

celaneseimagea20.jpg

Table 4b
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(27
)
 
(1
)
 
(1
)
 
 
(29
)
Acetate Tow
(18
)
 
(5
)
 

 
 
(23
)
Acetyl Chain
(14
)
 
(8
)
 
(1
)
 
 
(23
)
 
 
 
 
 
 
 
 
 
 
Total Company
(20
)
 
(5
)
 
(1
)
 
1
 
(25
)
Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(9
)
 
(5
)
 
(1
)
 
 
(15
)
Acetate Tow
(17
)
 
(5
)
 

 
 
(22
)
Acetyl Chain
(3
)
 
(7
)
 
(1
)
 
1
 
(10
)
 
 
 
 
 
 
 
 
 
 
Total Company
(7
)
 
(6
)
 
(1
)
 
1
 
(13
)
Three Months Ended December 31, 2019 Compared to Three Months Ended December 31, 2018
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(9
)
 
(3
)
 
(1
)
 
 
(13
)
Acetate Tow
(8
)
 

 

 
 
(8
)
Acetyl Chain
(4
)
 
(13
)
 
(1
)
 
 
(18
)
 
 
 
 
 
 
 
 
 
 
Total Company
(6
)
 
(8
)
 
(1
)
 
 
(15
)
Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(4
)
 
(2
)
 
(2
)
 
 
(8
)
Acetate Tow

 

 

 
 

Acetyl Chain
6

 
(18
)
 
(2
)
 
 
(14
)
 
 
 
 
 
 
 
 
 
 
Total Company
2

 
(11
)
 
(2
)
 
1
 
(10
)


 


Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(8
)
 

 
(3
)
 
 
(11
)
Acetate Tow
1

 
1

 
(1
)
 
 
1

Acetyl Chain
(1
)
 
(14
)
 
(3
)
 
 
(18
)
 
 
 
 
 
 
 
 
 
 
Total Company
(3
)
 
(8
)
 
(3
)
 
 
(14
)
Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(3
)
 
7

 
(4
)
 
 

Acetate Tow
(1
)
 

 

 
 
(1
)
Acetyl Chain
(4
)
 
(8
)
 
(3
)
 
 
(15
)
 
 
 
 
 
 
 
 
 
 
Total Company
(3
)
 
(2
)
 
(4
)
 
 
(9
)













11

celaneseimagea20.jpg

Table 4c
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Year Ended December 31, 2019 Compared to Year Ended December 31, 2018
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(In percentages)
Engineered Materials
(5
)
 

 
(3
)
 
 
(8
)
Acetate Tow
(2
)
 

 

 
 
(2
)
Acetyl Chain
(1
)
 
(13
)
 
(2
)
 
 
(16
)
 
 
 
 
 
 
 
 
 
 
Total Company
(3
)
 
(7
)
 
(2
)
 
 
(12
)

12

celaneseimagea20.jpg

Table 5
Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions, except percentages)
Net cash provided by (used in) investing activities
(181
)
 
(128
)
 
(493
)
 
(168
)
 
(82
)
 
(66
)
 
(177
)
Net cash provided by (used in) financing activities
(232
)
 
(16
)
 
(935
)
 
(199
)
 
(299
)
 
(307
)
 
(130
)
 


 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
379

 
259

 
1,454

 
326

 
397

 
424

 
307

Capital expenditures on property, plant and equipment
(88
)
 
(119
)
 
(370
)
 
(144
)
 
(82
)
 
(65
)
 
(79
)
Distributions to NCI
(8
)
 
(5
)
 
(10
)
 
(3
)
 

 
(3
)
 
(4
)
Free cash flow(1)(2)
283

 
135

 
1,074

 
179

 
315

 
356

 
224

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
1,193

 
1,460

 
6,297

 
1,432

 
1,586

 
1,592

 
1,687

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Free cash flow as % of Net sales
23.7
%
 
9.2
%
 
17.1
%
 
12.5
%
 
19.9
%
 
22.4
%
 
13.3
%
______________________________
(1) 
Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for capital contributions or distributions to Mitsui related to our joint venture, Fairway.
(2) 
Excludes required debt service and finance lease payments of $26 million and $24 million for the years ended December 31, 2020 and 2019, respectively.

13

celaneseimagea20.jpg

Table 6
Cash Dividends Received - Unaudited
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions)
Dividends from equity method investments
59

 
46

 
168

 
42

 
15

 
41

 
70

Dividends from equity investments without readily determinable fair values
32

 
37

 
113

 
24

 
27

 
30

 
32

Total
91

 
83

 
281

 
66

 
42

 
71

 
102

Table 7
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
 
Q2 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates
1,045

 
749

 
496

 
496

 
368

 
319

 
743

Long-term debt, net of unamortized deferred financing costs
2,989

 
3,356

 
3,409

 
3,409

 
3,359

 
3,444

 
2,933

Total debt
4,034

 
4,105

 
3,905

 
3,905

 
3,727

 
3,763

 
3,676

Cash and cash equivalents
(539
)
 
(570
)
 
(463
)
 
(463
)
 
(497
)
 
(491
)
 
(441
)
Net debt
3,495

 
3,535

 
3,442

 
3,442

 
3,230

 
3,272

 
3,235


14

celaneseimagea20.jpg

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 '20
 
Q1 '20
 
2019
 
Q4 '19
 
Q3 '19
 
Q2 '19
 
Q1 '19
 
Income Statement Classification
 
(In $ millions)
 
 
Plant/office closures
(4
)
 
3

 
26

 
12

 
9

 
2

 
3

 
Cost of sales / SG&A / Other (charges) gains, net / Gain (loss) on disposition of businesses and assets, net
Asset impairments
25

 
4

 
94

(1) 
2

 
9

 
83

 

 
Cost of sales / Other (charges) gains, net
Clear Lake incident

 
4

 
34

 
32

 
2

 

 

 
Cost of sales
COVID-19
1

 
1

 

 

 

 

 

 
Cost of sales / SG&A
Mergers and acquisitions
3

 
7

 
12

 
3

 
2

 
4

 
3

 
Cost of sales / SG&A
Actuarial (gain) loss on pension and postretirement plans

 

 
88

 
88

 

 

 

 
Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income
Restructuring
2

 
7

 
27

 
6

 
7

 
15

 
(1
)
 
SG&A / Other (charges) gains, net / Non-operating pension and other postretirement employee benefit (expense) income
European Commission investigation
2

 

 
89

 
89

 

 

 

 
Other (charges) gains, net
Commercial disputes
(1
)
 

 
10

 
6

 

 
2

 
2

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

 

 
1

 

 

 
1

 

 
SG&A / Gain (loss) on disposition of businesses and assets, net
Certain Items attributable to Celanese Corporation
28

 
26

 
381

 
238

 
29

 
107

 
7

 
 
______________________________

(1) 
Includes $5 million of asset impairments in 2019 related to the Clear Lake incident.

15

celaneseimagea20.jpg

Table 9
Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited
 
 
 
 
 
2019
 
 
 
 
 
(In $ millions, except percentages)
Net earnings (loss) attributable to Celanese Corporation
 
 
 
 
852

 
 
 
 
 
 
Adjusted EBIT (Table 1)
 
 
 
 
1,476

Adjusted effective tax rate (Table 3a)
 
 
 
 
13
%
Adjusted EBIT tax effected
 
 
 
 
1,284

 
 
 
 
 
 
 
2019
 
2018
 
Average
 
(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates
496

 
561

 
529

Long-term debt, net of unamortized deferred financing costs
3,409

 
2,970

 
3,190

Celanese Corporation stockholders' equity
2,507

 
2,984

 
2,746

Invested capital
 
 
 
 
6,465

 
 
 
 
 
 
Return on invested capital (adjusted)
 
 
 
 
19.9
%
 
 
 
 
 
 
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital
 
 
 
 
13.2
%

16