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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2023
CELANESE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-32410 98-0420726
     
(State or other jurisdiction
of incorporation)
(Commission File
Number)
(IRS Employer
Identification No.)
222 West Las Colinas Blvd. Suite 900N, Irving, TX 75039
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (972) 443-4000

N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s)  Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share CE The New York Stock Exchange
1.125% Senior Notes due 2023 CE /23 The New York Stock Exchange
1.250% Senior Notes due 2025 CE /25 The New York Stock Exchange
4.777% Senior Notes due 2026 CE /26A The New York Stock Exchange
2.125% Senior Notes due 2027 CE /27 The New York Stock Exchange
0.625% Senior Notes due 2028 CE /28 The New York Stock Exchange
5.337% Senior Notes due 2029 CE /29A The New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
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Item 2.02 Results of Operations and Financial Condition
On February 23, 2023, Celanese Corporation (the "Company") issued a press release reporting the financial results for its fourth quarter and full year 2022. A copy of the press release is attached to this Current Report on Form 8-K ("Current Report") as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure. Each non-US GAAP financial measure appearing in the press release is accompanied by the most directly comparable US GAAP financial measure and is reconciled to the most comparable US GAAP financial measure in Exhibit 99.2, which includes other supplemental information of interest to investors, analysts and other parties, including the reasons why management believes such Non-US GAAP financial measures provide useful information to investors, and which is incorporated herein solely for purposes of this Item 2.02 disclosure.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are being furnished herewith:
Exhibit
Number
 
Description
   
99.1
99.2
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document contained in Exhibit 101)
* In connection with the disclosure set forth in Item 2.02, the information in this Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section. The information in this Current Report, including the exhibits, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
       
 
CELANESE CORPORATION
 
  By: /s/ MICHAEL R. SULLIVAN
  Name:  Michael R. Sullivan
  Title:   Vice President, Deputy General Counsel and Assistant Corporate Secretary 
 
Date: February 23, 2023
3
EX-99.1 2 q420228-kex991.htm EX-99.1 Document

Exhibit 99.1
celogoa02a01a10a01a02a01a36a.jpg
Celanese Corporation
222 West Las Colinas Blvd.
Suite 900N
Irving, Texas 75039
Celanese Corporation Reports Full Year 2022 and Fourth Quarter Earnings

Dallas, February 23, 2023: Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported highest-ever GAAP diluted earnings per share of $17.41 and second-highest ever adjusted earnings per share of $15.88 for full year 2022. The Company generated record net sales of $9.7 billion in the year, an increase of 13 percent over the prior record set in 2021. Full year net sales reflected increases in pricing and volume of 11 percent and 6 percent over 2021, respectively. The Company delivered year over year pricing growth and productivity across both business segments to largely offset over $1.2 billion in raw material, energy, and supply chain cost inflation over 2021. As a result, the Company reported 2022 consolidated operating profit of $1.4 billion and adjusted EBIT of $2.2 billion. During the year, the Company generated record operating cash flow of $1.8 billion and free cash flow of $1.3 billion. Celanese returned $297 million in cash to shareholders via dividends in 2022.
On November 1, 2022, the Company successfully completed the acquisition of the Mobility & Materials (M&M) business of DuPont, acquiring a broad portfolio of engineered thermoplastics and elastomers, industry-renowned brands and intellectual property, global production assets, and a world-class organization. The acquisition establishes Celanese as the preeminent global specialty materials company. Full year 2022 financial results reflect the contribution of M&M performance in November and December.
The difference between GAAP diluted earnings per share and adjusted earnings per share for 2022 was primarily due to an income tax provision for U.S. GAAP that was a benefit for full year 2022 as a result of non-recurring internal restructuring transactions related to the M&M acquisition. The impact of the beneficial tax recognition more than offset the impact of costs related to the M&M acquisition, including approximately $267 million in M&A-related costs, and $158 million in net interest expense incurred prior to transaction closing and certain fees related to debt issued.
Celanese also reported fourth quarter GAAP diluted earnings per share of $7.03 and adjusted earnings per share of $1.44. The Company generated operating cash flow of $541 million and free cash flow of $395 million in the quarter.
"Our team delivered resilient performance despite an exceptionally challenging end to 2022 including accelerated destocking, poor sequential demand in Asia due to COVID, challenging competitive dynamics in Europe, and the impact of Winter Storm Elliott," said Lori Ryerkerk, chair and chief executive officer. "Our 2022 adjusted earnings per share performance was within 12 percent of our all-time high delivered in 2021 and 44 percent higher than our next best year. Despite the impact of elevated volatility across a number of external dynamics, our Celanese team continues to execute our business models and demonstrate a long-term underlying lift in the earnings power of the company."
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Fourth Quarter 2022 Financial Highlights:
Three Months Ended
December 31,
2022
September 30,
2022
December 31,
2021
(unaudited)
(In $ millions, except per share data)
Net Sales
Engineered Materials 1,237  929  707 
Acetyl Chain 1,135  1,397  1,590 
Intersegment Eliminations (24) (25) (22)
Total 2,348  2,301  2,275 
Operating Profit (Loss)
Engineered Materials 25  114  67 
Acetyl Chain 204  312  539 
Other Activities (173) (118) (89)
Total 56  308  517 
Net Earnings (Loss)
769  193  526 
Adjusted EBIT(1)
Engineered Materials 138  206  113 
Acetyl Chain 242  349  574 
Other Activities (78) (45) (35)
Total 302  510  652 
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials 35  70  30 
Acetyl Chain 30  34  36 
Operating EBITDA(1)
453  607  745 
Diluted EPS - continuing operations $ 7.03  $ 1.76  $ 4.83 
Diluted EPS - total $ 7.03  $ 1.75  $ 4.79 
Adjusted EPS(1)
$ 1.44  $ 3.94  $ 4.91 
Net cash provided by (used in) investing activities (10,713) (143) (1,286)
Net cash provided by (used in) financing activities 1,944  8,600  (99)
Net cash provided by (used in) operating activities 541  467  584 
Free cash flow(1)
395  325  415 
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Year Ended December 31,
2022 2021
(unaudited)
(In $ millions, except per share data)
Net Sales
Engineered Materials 4,024  2,718 
Acetyl Chain 5,743  5,894 
Intersegment Eliminations (94) (75)
Total 9,673  8,537 
Operating Profit (Loss)
Engineered Materials 429  411 
Acetyl Chain 1,447  1,875 
Other Activities (498) (340)
Total 1,378  1,946 
Net Earnings (Loss)
1,902  1,896 
Adjusted EBIT(1)
Engineered Materials 779  571 
Acetyl Chain 1,609  2,056 
Other Activities (217) (154)
Total 2,171  2,473 
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials 207  127 
Acetyl Chain 143  154 
Operating EBITDA(1)
2,617  2,835 
Diluted EPS - continuing operations $ 17.41  $ 17.06 
Diluted EPS - total $ 17.34  $ 16.86 
Adjusted EPS(1)
$ 15.88  $ 18.12 
Net cash provided by (used in) investing activities (11,141) (1,119)
Net cash provided by (used in) financing activities 10,290  (1,042)
Net cash provided by (used in) operating activities 1,819  1,757 
Free cash flow(1)
1,263  1,263 
____________________________
(1)See "Non-US GAAP Financial Measures" below.
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Recent Highlights:
•Completed the acquisition of Mobility & Materials on November 1, 2022.
•Announced the signing of a term sheet to form a standalone Food Ingredients joint venture (JV) in which Celanese will contribute its Food Ingredients business and Mitsui will acquire a 70 percent stake. The transaction is expected to close in the third quarter and cash proceeds will be used to pay down debt.
•Completed a strategic overhaul of the acetate flake and tow products as part of the Acetyl Chain which is expected to deliver significant margin expansion in those products in 2023.
•Completed an ultra-low capital project, at the EVA facility in Edmonton, to repurpose existing manufacturing and infrastructure assets and unlock approximately 35 percent incremental capacity to meet strong demand growth.
Full Year 2022 and Fourth Quarter Business Segment Overview
Acetyl Chain
The Acetyl Chain reported 2022 net sales of $5.7 billion, a 3 percent decrease from record net sales set in the prior year. Full year net sales reflected a 6 percent increase in pricing, 6 percent decrease in volume, and 3 percent unfavorable impact from foreign currency. As a result of commercial pricing actions, the business offset the majority of approximately $650 million in raw material, energy, and supply chain cost inflation over the prior year. In the first half of 2022, the Acetyl Chain maintained volumes across its global network by pivoting volume from Asia to incremental demand and margin in the Western Hemisphere. In the second half of the year, weaker fundamental demand was amplified by destocking, particularly across Europe and China and the Acetyl Chain took decisive actions to reduce cost and align its production to market demand. The Frankfurt VAM unit, the highest-cost facility in its global VAM network, was idled for the majority of the second half of 2022. Additionally, the Acetyl Chain intentionally idled all five of its major production units in China at different points in the fourth quarter. As a result, the Acetyl Chain generated GAAP operating profit of $1.4 billion and adjusted EBIT of $1.6 billion, at margins of 25 and 28 percent, respectively. The 2022 results reflect a resegmentation of the former Acetate Tow reporting segment into the Acetyl Chain due to the successful completion of the strategic overhaul of that business as a derivative of acetic acid.
The Acetyl Chain delivered fourth quarter net sales of $1.1 billion due to sequential pricing and volume declines of 10 percent and 9 percent, respectively. In the last two weeks of the quarter, the business proactively shut down its U.S. Gulf Coast production network in anticipation of Winter Storm Elliott, resulting in over 130 kt of lost production in addition to supply chain disruptions. Despite these challenges, the Acetyl Chain delivered fourth quarter GAAP operating profit of $204 million and adjusted EBIT of $242 million, in the upper half of the guidance range provided.     
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Engineered Materials
Engineered Materials delivered record net sales of $4.0 billion in 2022, a 48 percent increase over the prior year. Net sales was driven by volume and price increases of 33 percent and 23 percent, respectively, and an 8 percent unfavorable impact from foreign currency. Organic volume growth in the automotive, electronics, and medical end-markets as well as volume contributions from the Santoprene and M&M acquisitions offset the impact of underlying demand softness and destocking in the second half of the year. The Santoprene acquisition, which closed in the fourth quarter of 2021, contributed across the full year. The M&M acquisition, which closed on November 1, 2022, contributed in the last two months of 2022. Pricing across 2022 expanded significantly as a result of broad commercial initiatives, including the implementation of an energy surcharge, to mitigate nearly $600 million in raw material, energy, and supply chain cost inflation. Enhanced product mix also elevated pricing, due in part to the medical implant business returning to a pre-COVID condition in the second half of the year. Engineered Materials delivered 2022 GAAP operating profit of $429 million and adjusted EBIT of $779 million. The difference between GAAP operating profit and adjusted EBIT was due primarily to costs associated with the acquisition of M&M. Affiliate earnings contributed $202 million during the year.
Engineered Materials reported fourth quarter net sales of $1.2 billion due to a sequential volume increase of 34 percent and pricing decrease of 1 percent. Volume increased sequentially due to the impact of the M&M acquisition which was partially offset by seasonality and broad destocking. Pricing decreased as the impact of a lower energy surcharge and challenging competitive dynamics in Europe more than offset the impact of improved mix. Engineered Materials reported fourth quarter GAAP operating profit of $25 million and adjusted EBIT of $138 million which included affiliate earnings of $31 million.
Cash Flow and Tax
Celanese generated full year 2022 operating cash flow of $1.8 billion and free cash flow of $1.3 billion. Capital expenditures across the year were $543 million. Celanese returned $297 million in cash to shareholders via dividends in the year.
The tax rate for U.S. GAAP purposes was a benefit of (34) percent for full year 2022 due to deferred tax benefits related to non-recurring internal restructuring transactions related to the M&M acquisition, to centralize ownership of intellectual property with the business, and to facilitate future deployment of cash to service acquisition indebtedness. The effective tax rate for adjusted earnings was 13 percent for 2022 as certain benefits of the internal restructuring will be realized in future periods.
Outlook
"Our March order books reflect improvement in many of the recent external challenges we have seen, and we are taking action to address those which still persist," said Lori Ryerkerk. "We are confident that the back half of the first quarter will represent an inflection point and that sequential earnings improvement across our businesses will drive anticipated first quarter adjusted earnings per share of $1.50 to $1.75, inclusive of approximately $0.30 per share of M&M transaction amortization1. We expect an upward trajectory in our quarterly earnings across 2023 as a result of demand improvement reflected in our current order books, enhancements to our businesses, and M&M synergies."
1 Calculated as intangible amortization from the M&M transaction divided by diluted weighted average shares outstanding
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A reconciliation of forecasted adjusted earnings per share to U.S. GAAP diluted earnings per share is not available without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, is not practical. For more information, see "Non-GAAP Financial Measures" below.
The Company's prepared remarks related to the fourth quarter will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library on February 23, 2023. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our investor relations website under Financial Information/Non-GAAP Financial Measures. See also "Non-GAAP Financial Measures" below.
Contacts:
Investor Relations Media - U.S. Media - Europe
Brandon Ayache Brian Bianco Petra Czugler
Phone: +1 972 443 8509 Phone: +1 972 443 4400 Phone: +49 69 45009 1206
brandon.ayache@celanese.com media@celanese.com petra.czugler@celanese.com
Celanese Corporation is a global chemical leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 13,300 employees worldwide and had 2022 net sales of $9.7 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com.
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Forward-Looking Statements
This release may contain "forward-looking statements," which include information concerning the Company's plans, objectives, goals, strategies, future revenues or 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. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; volatility or changes in the price and availability of raw materials and energy, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources; the length and depth of product and industry business cycles, particularly in the automotive, electrical, mobility, textiles, medical, electronics and construction industries; the ability to pass increases in raw material prices, logistics costs and other costs on to customers or otherwise improve margins through price increases; the accuracy or inaccuracy of our beliefs and assumptions regarding anticipated benefits of the acquisition (the "M&M Acquisition") by us of the majority of the Mobility & Materials business (the "M&M Business") of DuPont de Nemours, Inc., including as a result of the performance of the M&M Business between signing and closing of the M&M Acquisition; the possibility that we will not be able to realize anticipated improvements in the M&M Business's financial performance — including optimizing pricing, currency mix and inventory — or realize the anticipated benefits of the M&M Acquisition, including synergies and growth opportunities, within the anticipated timeframe, or at all, whether as a result of difficulties arising from the operation or integration of the M&M Business or other unanticipated delays, costs, inefficiencies or liabilities; increased commercial, legal or regulatory complexity of entering into, or expanding our exposure to, certain end markets and geographies; risks in the global economy and equity and credit markets and their potential impact on our ability to pay down debt in the future and/or refinance at suitable rates, in a timely manner, or at all; diversion of management's attention from ongoing business operations and opportunities and other disruption caused by the M&M Acquisition and the integration processes and their impact on our existing business and relationships; risks and costs associated with increased leverage from the M&M Acquisition, including increased interest expense and potential reduction of business and strategic flexibility; the ability to maintain plant utilization rates and to implement planned capacity additions, expansions and maintenance; the ability to reduce or maintain their current levels of production costs and to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; the ability to identify desirable potential acquisition or divestiture opportunities and to complete such transactions, including obtaining regulatory approvals, consistent with the Company's strategy; market acceptance of our products and technology; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, transportation, logistics or supply chain disruptions, cybersecurity incidents, terrorism or political unrest, public health crises (including, but not limited to, the COVID-19 pandemic), or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the occurrence of acts of war (such as the Russia-Ukraine conflict) or terrorist incidents or as a result of weather, natural disasters, or other crises; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in applicable tariffs, duties and trade agreements, tax rates or legislation throughout the world including, but not limited to, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in the United States and other jurisdictions; changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property; potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change or other sustainability matters; potential liability resulting from pending or future claims or litigation, including investigations or enforcement actions, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; tax rates and changes thereto; our ability to obtain regulatory approval for, and satisfy closing conditions to, any transactions described herein that have not closed; and various other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission.

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

Non-GAAP Financial Measures
Presentation
This document presents the Company's two business segments, Engineered Materials and the Acetyl Chain.
Use of Non-US GAAP Financial Information
This release uses the following Non-US GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, 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 do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales.
•Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization.
•Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We do not
7


provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
•Free cash flow is a liquidity measure used by the Company and is defined by the Company as cash flow from operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway").
    Reconciliation of Non-US GAAP Financial Measures
Reconciliations of the Non-US GAAP financial measures used in this press release to the comparable US GAAP financial measure, together with information about the purposes and uses of Non-US GAAP financial measures, are included in our Non-US GAAP Financial Measures and Supplemental Information document filed as an exhibit to our Current Report on Form 8-K filed with the SEC on or about February 23, 2023 and also available on our website at investors.celanese.com under Financial Information/Financial Document Library.
Results Unaudited
The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.
Supplemental Information
Additional information about our prior period performance is included in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial Measures and Supplemental Information document.
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Consolidated Statements of Operations - Unaudited
Three Months Ended
December 31,
2022
September 30,
2022
December 31,
2021
(In $ millions, except share and per share data)
Net sales 2,348  2,301  2,275 
Cost of sales (1,964) (1,755) (1,554)
Gross profit 384  546  721 
Selling, general and administrative expenses (269) (184) (170)
Amortization of intangible assets (30) (10) (8)
Research and development expenses (37) (25) (23)
Other (charges) gains, net (15) — 
Foreign exchange gain (loss), net (2) — 
Gain (loss) on disposition of businesses and assets, net (2) (2) (3)
Operating profit (loss) 56  308  517 
Equity in net earnings (loss) of affiliates 31  73  36 
Non-operating pension and other postretirement employee benefit (expense) income (57) 25  (7)
Interest expense (168) (154) (21)
Refinancing expense —  —  — 
Interest income 33  34 
Dividend income - equity investments 30  30  33 
Other income (expense), net (2)
Earnings (loss) from continuing operations before tax (70) 321  557 
Income tax (provision) benefit 840  (127) (27)
Earnings (loss) from continuing operations 770  194  530 
Earnings (loss) from operation of discontinued operations (1) —  (3)
Income tax (provision) benefit from discontinued operations —  (1) (1)
Earnings (loss) from discontinued operations (1) (1) (4)
Net earnings (loss) 769  193  526 
Net (earnings) loss attributable to noncontrolling interests (2) (2) (2)
Net earnings (loss) attributable to Celanese Corporation 767  191  524 
Amounts attributable to Celanese Corporation  
Earnings (loss) from continuing operations 768  192  528 
Earnings (loss) from discontinued operations (1) (1) (4)
Net earnings (loss) 767  191  524 
Earnings (loss) per common share - basic
Continuing operations 7.08  1.77  4.86 
Discontinued operations (0.01) (0.01) (0.04)
Net earnings (loss) - basic 7.07  1.76  4.82 
Earnings (loss) per common share - diluted
Continuing operations 7.03  1.76  4.83 
Discontinued operations —  (0.01) (0.04)
Net earnings (loss) - diluted 7.03  1.75  4.79 
Weighted average shares (in millions)  
Basic 108.5  108.4  108.6 
Diluted 109.2  109.1  109.4 

9


Consolidated Statements of Operations - Unaudited
Year Ended December 31,
2022 2021
(In $ millions, except share and per share data)
Net sales 9,673  8,537 
Cost of sales (7,293) (5,855)
Gross profit 2,380  2,682 
Selling, general and administrative expenses (824) (633)
Amortization of intangible assets (62) (25)
Research and development expenses (112) (86)
Other (charges) gains, net (8)
Foreign exchange gain (loss), net (1)
Gain (loss) on disposition of businesses and assets, net
Operating profit (loss) 1,378  1,946 
Equity in net earnings (loss) of affiliates 220  146 
Non-operating pension and other postretirement employee benefit (expense) income
17  106 
Interest expense (405) (91)
Refinancing expense —  (9)
Interest income 69 
Dividend income - equity investments 133  147 
Other income (expense), net (5)
Earnings (loss) from continuing operations before tax 1,421  2,248 
Income tax (provision) benefit 489  (330)
Earnings (loss) from continuing operations 1,910  1,918 
Earnings (loss) from operation of discontinued operations (9) (27)
Income tax (provision) benefit from discontinued operations
Earnings (loss) from discontinued operations (8) (22)
Net earnings (loss) 1,902  1,896 
Net (earnings) loss attributable to noncontrolling interests (8) (6)
Net earnings (loss) attributable to Celanese Corporation 1,894  1,890 
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations 1,902  1,912 
Earnings (loss) from discontinued operations (8) (22)
Net earnings (loss) 1,894  1,890 
Earnings (loss) per common share - basic
Continuing operations 17.55  17.19 
Discontinued operations (0.07) (0.20)
Net earnings (loss) - basic 17.48  16.99 
Earnings (loss) per common share - diluted
Continuing operations 17.41  17.06 
Discontinued operations (0.07) (0.20)
Net earnings (loss) - diluted 17.34  16.86 
Weighted average shares (in millions)
Basic 108.4  111.2 
Diluted 109.2  112.1 


10


Consolidated Balance Sheets - Unaudited
As of
December 31,
2022
As of
December 31,
2021
(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents 1,508  536 
Trade receivables - third party and affiliates, net 1,379  1,161 
Non-trade receivables, net 675  506 
Inventories 2,808  1,524 
Other assets 241  80 
Total current assets 6,611  3,807 
Investments in affiliates 1,062  823 
Property, plant and equipment, net 5,584  4,193 
Operating lease right-of-use assets 413  236 
Deferred income taxes 808  248 
Other assets 547  521 
Goodwill 7,142  1,412 
Intangible assets, net 4,105  735 
Total assets 26,272  11,975 
LIABILITIES AND EQUITY    
Current Liabilities    
Short-term borrowings and current installments of long-term debt - third party and affiliates
1,306  791 
Trade payables - third party and affiliates 1,518  1,160 
Other liabilities 1,201  473 
Income taxes payable 43  81 
Total current liabilities 4,068  2,505 
Long-term debt, net of unamortized deferred financing costs 13,373  3,176 
Deferred income taxes 1,242  555 
Uncertain tax positions 322  280 
Benefit obligations 411  558 
Operating lease liabilities 364  200 
Other liabilities 387  164 
Commitments and Contingencies  
Stockholders' Equity  
Treasury stock, at cost (5,491) (5,492)
Additional paid-in capital 372  333 
Retained earnings 11,274  9,677 
Accumulated other comprehensive income (loss), net (518) (329)
Total Celanese Corporation stockholders' equity 5,637  4,189 
Noncontrolling interests 468  348 
Total equity 6,105  4,537 
Total liabilities and equity 26,272  11,975 


11
EX-99.2 3 q420228-kex992.htm EX-99.2 Document
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Exhibit 99.2
Non-US GAAP Financial Measures and Supplemental Information
February 23, 2023
In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.
Purpose
The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.
Presentation
This document presents the Company's two business segments, Engineered Materials and the Acetyl Chain.
Use of Non-US GAAP Financial Measures
From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.
Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Financial Information/Financial Document Library page of our website, investors.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.
Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Financial Information/Financial Document Library page of our website, investors.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.
This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.
Specific Measures Used
This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt
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is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity.
Definitions
•Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8). We believe that adjusted EBIT provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of unusual, non-operational or restructuring-related activities that affect comparability. Our management recognizes that adjusted EBIT has inherent limitations because of the excluded items. Adjusted EBIT is one of the measures management uses for planning and budgeting, monitoring and evaluating financial and operating results and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. Adjusted EBIT margin has the same uses and limitations as Adjusted EBIT.
•Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. We believe that Operating EBITDA provides transparent and useful information to investors, analysts and other parties in evaluating our operating performance relative to our peer companies. Operating EBITDA margin is defined by the Company as Operating EBITDA divided by net sales. Operating EBITDA margin has the same uses and limitations as Operating EBITDA.
•Operating profit (loss) attributable to Celanese Corporation is defined by the Company as operating profit (loss), less earnings (loss) attributable to noncontrolling interests ("NCI"). We believe that operating profit (loss) attributable to Celanese Corporation provides transparent and useful information to management, investors, analysts and other parties in evaluating our core operational performance. Operating margin attributable to Celanese Corporation is defined by the Company as operating profit (loss) attributable to Celanese Corporation divided by net sales. Operating margin attributable to Celanese Corporation has the same uses and limitations as Operating profit (loss) attributable to Celanese Corporation.
•Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We believe that adjusted earnings per share provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of the above stated items that affect comparability and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.
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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. Free cash flow is not a measure of cash available for discretionary expenditures since the Company has certain debt service and finance lease payments that are not deducted from that measure.
•Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.
•Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our stockholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns.
Supplemental Information
Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:
•Net sales for each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for each of our business segments.
•Cash dividends received from our equity investments.
•For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as NCI. 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.
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Table 1
Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions)
Net earnings (loss) attributable to Celanese Corporation
1,894  767  191  434  502  1,890  524  506  538  322 
(Earnings) loss from discontinued operations
—  22  13 
Interest income (69) (33) (34) (1) (1) (8) (1) (2) (4) (1)
Interest expense 405  168  154  48  35  91  21  21  24  25 
Refinancing expense —  —  —  —  —  —  —  — 
Income tax provision (benefit) (489) (840) 127  112  112  330  27  102  116  85 
Certain Items attributable to Celanese Corporation (Table 8)
422  239  71  47  65  139  77  (1) 13  50 
Adjusted EBIT 2,171  302  510  646  713  2,473  652  648  691  482 
Depreciation and amortization expense(1)
446  151  97  98  100  362  93  91  90  88 
Operating EBITDA 2,617  453  607  744  813  2,835  745  739  781  570 
         
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions)
Engineered Materials 13 
Acetyl Chain —  —  —  —  —  —  —  — 
Other Activities(2)
—  —  —  —  —  —  —  — 
Accelerated depreciation and amortization expense
16 
Depreciation and amortization expense(1)
446  151  97  98  100  362  93  91  90  88 
Total depreciation and amortization expense
462  153  100  103  106  371  97  93  91  90 
______________________________
(1)Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.
(2)Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).
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Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited
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2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin
Engineered Materials 429  10.7  % 25  2.0  % 114  12.3  % 166  17.5  % 124  13.6  % 411  15.1  % 67  9.5  % 91  13.3  % 123  18.0  % 130  20.2  %
Acetyl Chain(1)
1,447  25.2  % 204  18.0  % 312  22.3  % 428  27.5  % 503  30.4  % 1,875  31.8  % 539  33.9  % 529  33.0  % 540  35.2  % 267  22.9  %
Other Activities(2)
(498) (173) (118) (111) (96) (340) (89) (84) (96) (71)
Total 1,378  14.2  % 56  2.4  % 308  13.4  % 483  19.4  % 531  20.9  % 1,946  22.8  % 517  22.7  % 536  23.7  % 567  25.8  % 326  18.1  %
Less: Net Earnings (Loss) Attributable to NCI(1)
Operating Profit (Loss) Attributable to Celanese Corporation 1,370  14.2  % 54  2.3  % 306  13.3  % 481  19.3  % 529  20.8  % 1,940  22.7  % 515  22.6  % 535  23.6  % 565  25.7  % 325  18.1  %
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
Engineered Materials 429  10.7  % 25  2.0  % 114  12.3  % 166  17.5  % 124  13.6  % 411  15.1  % 67  9.5  % 91  13.3  % 123  18.0  % 130  20.2  %
Acetyl Chain(1)
1,439  25.1  % 202  17.8  % 310  22.2  % 426  27.3  % 501  30.3  % 1,869  31.7  % 537  33.8  % 528  33.0  % 538  35.0  % 266  22.8  %
Other Activities(2)
(498) (173) (118) (111) (96) (340) (89) (84) (96) (71)
Total 1,370  14.2  % 54  2.3  % 306  13.3  % 481  19.3  % 529  20.8  % 1,940  22.7  % 515  22.6  % 535  23.6  % 565  25.7  % 325  18.1  %
Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
Engineered Materials 207  35  70  53  49  127  30  40  32  25 
Acetyl Chain 143  30  34  39  40  154  36  36  39  43 
Other Activities(2)
12 
Total 362  66  108  93  95  288  67  77  75  69 
Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation
Engineered Materials —  —  —  —  —  —  —  —  —  — 
Acetyl Chain —  —  —  —  —  —  —  —  —  — 
Other Activities(2)
17  (57) 25  25  24  106  (7) 37  38  38 
Total 17  (57) 25  25  24  106  (7) 37  38  38 
Certain Items Attributable to Celanese Corporation (Table 8)
Engineered Materials 143  78  22  38  33  16 
Acetyl Chain 27  10  10  33  (1) (1) 34 
Other Activities(2)
252  151  44  32  25  73  60  (6) 11 
Total 422  239  71  47  65  139  77  (1) 13  50 
Adjusted EBIT / Adjusted EBIT Margin
Engineered Materials 779  19.4  % 138  11.2  % 206  22.2  % 224  23.6  % 211  23.2  % 571  21.0  % 113  16.0  % 137  20.0  % 161  23.6  % 160  24.8  %
Acetyl Chain 1,609  28.0  % 242  21.3  % 349  25.0  % 475  30.5  % 543  32.9  % 2,056  34.9  % 574  36.1  % 563  35.1  % 576  37.5  % 343  29.4  %
Other Activities(2)
(217) (78) (45) (53) (41) (154) (35) (52) (46) (21)
Total 2,171  22.4  % 302  12.9  % 510  22.2  % 646  26.0  % 713  28.1  % 2,473  29.0  % 652  28.7  % 648  28.6  % 691  31.4  % 482  26.8  %
___________________________
(1)Net earnings (loss) attributable to NCI is included within the Acetyl Chain segment.
(2)Other Activities includes corporate SG&A expenses, results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).
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Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)
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2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions, except percentages)
Depreciation and Amortization Expense(1)
Engineered Materials 213  90  40  41  42  135  35  33  34  33 
Acetyl Chain 211  52  53  52  54  210  53  54  52  51 
Other Activities(2)
22  17 
Total 446  151  97  98  100  362  93  91  90  88 
Operating EBITDA / Operating EBITDA Margin
Engineered Materials 992  24.7  % 228  18.4  % 246  26.5  % 265  28.0  % 253  27.8  % 706  26.0  % 148  20.9  % 170  24.9  % 195  28.6  % 193  29.9  %
Acetyl Chain 1,820  31.7  % 294  25.9  % 402  28.8  % 527  33.8  % 597  36.1  % 2,266  38.4  % 627  39.4  % 617  38.5  % 628  40.9  % 394  33.8  %
Other Activities(2)
(195) (69) (41) (48) (37) (137) (30) (48) (42) (17)
Total 2,617  27.1  % 453  19.3  % 607  26.4  % 744  29.9  % 813  32.0  % 2,835  33.2  % 745  32.7  % 739  32.6  % 781  35.5  % 570  31.7  %
___________________________
(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, 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).
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Table 3
Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
per share per share per share 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
1,902  17.41  768  7.03  192  1.76  440  4.03  502  4.61  1,912  17.06  528  4.83  519  4.67  542  4.81  323  2.83 
Income tax provision (benefit)
(489) (840) 127  112  112  330  27  102  116  85 
Earnings (loss) from continuing operations before tax
1,413  (72) 319  552  614  2,242  555  621  658  408 
Certain Items attributable to Celanese Corporation (Table 8)
422  239  71  47  65  139  77  (1) 13  50 
Refinancing and related expenses 158  (1) 14  (1) 104  (1) 26  (1) 14  (1) —  —  — 
Adjusted earnings (loss) from continuing operations before tax
1,993  181  494  625  693  2,390  632  629  671  458 
Income tax (provision) benefit on adjusted earnings(2)
(259) (24) (64) (81) (90) (359) (95) (94) (105) (64)
Adjusted earnings (loss) from continuing operations(3)
1,734  15.88  157  1.44  430  3.94  544  4.99  603  5.54  2,031  18.12  537  4.91  535  4.82  566  5.02  394  3.46 
Diluted shares (in millions)(4)
Weighted average shares outstanding
108.4  108.5  108.4  108.4  108.2  111.2  108.6  110.5  112.3  113.5 
Incremental shares attributable to equity awards
0.8  0.7  0.7  0.7  0.7  0.9  0.8  0.5  0.5  0.5 
Total diluted shares 109.2  109.2  109.1  109.1  108.9  112.1  109.4  111.0  112.8  114.0 
______________________________
(1)Includes net interest expense and certain fees related to debt issued as part of our acquisition of a majority of the Mobility & Materials business ("M&M Business") of DuPont de Nemours, Inc.
(2)Calculated using adjusted effective tax rates (Table 3a) as follows:
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
Adjusted effective tax rate
13  13  13  13  13  15  15  15  16  14 
(3)Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.
Actual Plan Asset Returns Expected Plan Asset Returns
(In percentages)
Q4 '22 & 2022 (18.4) 5.4 
Q4 '21 & 2021 1.1  6.3 
(4)Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.
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Table 3a
Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited
Actual
2022 2021
(In percentages)
US GAAP annual effective tax rate (34) 15 
Discrete quarterly recognition of GAAP items(1)
(6) (2)
Tax impact of other charges and adjustments(2)
(1)
Utilization of foreign tax credits —  (1)
Changes in valuation allowances, excluding impact of other charges and adjustments(3)
(1)
Other, includes effect of discrete current year transactions(4)(5)
45 
Adjusted tax rate 13  15 
______________________________
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)Includes tax impacts related to full-year actual tax opportunities and related costs.
(5)Includes the reversal of 2022 U.S. GAAP deferred tax benefits related to non-recurring internal restructuring transactions related to the M&M acquisition, to centralize ownership of intellectual property with the business and to facilitate future deployment of cash to service acquisition indebtedness. Certain benefits of the internal restructuring will be realized in future periods for adjusted earnings purposes.
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Table 4
Net Sales by Segment - Unaudited
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions)
Engineered Materials 4,024  1,237  929  948  910  2,718  707  684  682  645 
Acetyl Chain 5,743  1,135  1,397  1,559  1,652  5,894  1,590  1,602  1,535  1,167 
Intersegment eliminations(1)
(94) (24) (25) (21) (24) (75) (22) (20) (19) (14)
Net sales 9,673  2,348  2,301  2,486  2,538  8,537  2,275  2,266  2,198  1,798 
___________________________
(1)Includes intersegment sales primarily related to the Acetyl Chain.
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Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
Three Months Ended December 31, 2022 Compared to Three Months Ended September 30, 2022
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 34  (1) —  —  33 
(1)
Acetyl Chain (9) (10) —  —  (19)

Total Company (6) —  — 
Three Months Ended September 30, 2022 Compared to Three Months Ended June 30, 2022
Volume Price Currency Other Total
(In percentages)
Engineered Materials (1) (3) —  (2)
Acetyl Chain (3) (5) (2) —  (10)

Total Company (2) (3) (2) —  (7)
Three Months Ended June 30, 2022 Compared to Three Months Ended March 31, 2022
Volume Price Currency Other Total
(In percentages)
Engineered Materials (3) — 
Acetyl Chain (6) (2) —  (6)

Total Company (2) (2) —  (2)
Three Months Ended March 31, 2022 Compared to Three Months Ended December 31, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 23  (1) —  29 
Acetyl Chain (3) —  — 

Total Company 12  (1) —  12 
________________________
(1)2022 includes the effect of the acquisition of the majority of the M&M Business.



Three Months Ended December 31, 2021 Compared to Three Months Ended September 30, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials (1) (1) — 
(2)
Acetyl Chain (8) (1) —  (1)

Total Company (7) (1) —  — 
Three Months Ended September 30, 2021 Compared to Three Months Ended June 30, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials (2) (1) —  — 
Acetyl Chain (1) — 
Total Company (1) — 
Three Months Ended June 30, 2021 Compared to Three Months Ended March 31, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials (1) —  — 
Acetyl Chain 24  —  —  31 
Total Company 18  —  —  22 
Three Months Ended March 31, 2021 Compared to Three Months Ended December 31, 2020
Volume Price Currency Other Total
  (In percentages)
Engineered Materials —  13 
Acetyl Chain (8) 20  —  13 
Total Company (3) 15  —  13 
________________________
(2)2021 includes the effect of the acquisition of the Santoprene™ thermoplastic vulcanizates elastomers business.
10

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Table 4b
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Three Months Ended December 31, 2022 Compared to Three Months Ended December 31, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 67  17  (9) —  75 
Acetyl Chain (12) (14) (3) —  (29)
Total Company 13  (5) (5) — 
Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021
Volume Price Currency Other Total
(In percentages)
Engineered Materials 23  25  (12) —  36 
Acetyl Chain (10) (5) —  (13)
Total Company (2) (5) — 
Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 24  24  (9) —  39 
Acetyl Chain (5) 11  (4) — 
Total Company 14  (4) —  13 
Three Months Ended March 31, 2022 Compared to Three Months Ended March 31, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 20  25  (4) —  41 
Acetyl Chain 38  (3) —  42 
Total Company 12  32  (3) —  41 




Three Months Ended December 31, 2021 Compared to Three Months Ended December 31, 2020
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 20  (1) —  24 
Acetyl Chain (6) 60  (1) —  53 
Total Company (2) 46  (1) —  43 
Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 11  17  —  30 
Acetyl Chain 67  —  78 
Total Company 10  50  —  61 
Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 43  11  —  62 
Acetyl Chain 19  69  —  97 
Total Company 31  50  —  84 
Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
Volume Price Currency Other Total
  (In percentages)
Engineered Materials —  15 
Acetyl Chain —  22  —  27 
Total Company 14  —  23 

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Table 4c
Factors Affecting Segment Net Sales Year Over Year - Unaudited
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 33  23  (8) —  48 
Acetyl Chain (6) (3) —  (3)
Total Company 11  (4) —  13 
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020
Volume Price Currency Other Total
  (In percentages)
Engineered Materials 15  12  —  31 
Acetyl Chain 54  —  62 
Total Company 10  39  —  51 

12

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Table 5
Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions, except percentages)
Net cash provided by (used in) investing activities (11,141) (10,713) (143) (136) (149) (1,119) (1,286) (108) 177  98 
Net cash provided by (used in) financing activities 10,290  1,944  8,600  (159) (95) (1,042) (99) (228) (344) (371)
Net cash provided by (used in) operating activities 1,819  541  467  495  316  1,757  584  630  427  116 
Capital expenditures on property, plant and equipment (543) (143) (139) (124) (137) (467) (163) (102) (110) (92)
Distributions to NCI (13) (3) (3) (3) (4) (27) (6) (8) (8) (5)
Free cash flow(1)
1,263  395  325  368  175  1,263  415  520  309  19 
Net sales 9,673  2,348  2,301  2,486  2,538  8,537  2,275  2,266  2,198  1,798 
Free cash flow as % of Net sales 13.1  % 16.8  % 14.1  % 14.8  % 6.9  % 14.8  % 18.2  % 22.9  % 14.1  % 1.1  %
______________________________
(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.
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Table 6
Cash Dividends Received - Unaudited
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions)
Dividends from equity method investments 217  82  27  82  26  112  51  18  35 
Dividends from equity investments without readily determinable fair values 133  30  30  36  37  147  33  35  37  42 
Total 350  112  57  118  63  259  84  43  55  77 
Table 7
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21
(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates
1,306  1,306  977  809  860  791  791  103  500  497 
Long-term debt, net of unamortized deferred financing costs 13,373  13,373  11,360  3,022  3,132  3,176  3,176  3,724  3,156  3,135 
Total debt 14,679  14,679  12,337  3,831  3,992  3,967  3,967  3,827  3,656  3,632 
Cash and cash equivalents (1,508) (1,508) (9,671) (783) (605) (536) (536) (1,340) (1,054) (791)
Net debt 13,171  13,171  2,666  3,048  3,387  3,431  3,431  2,487  2,602  2,841 
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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:
2022 Q4 '22 Q3 '22 Q2 '22 Q1 '22 2021 Q4 '21 Q3 '21 Q2 '21 Q1 '21 Income Statement Classification
(In $ millions)
Exit and shutdown costs 52  14  29  18  (2) Cost of sales / SG&A / Other (charges) gains, net / Gain (loss) on disposition of businesses and assets, net / Non-operating pension and other postretirement employee benefit (expense) income
Asset impairments 13  12  (1) —  —  — 
Cost of sales / Other (charges) gains, net
Impact from plant incidents and natural disasters(1)
17  17  —  —  —  41  —  —  —  41  Cost of sales
Mergers, acquisitions and dispositions 267  138  44  29  56  29  19  —  Cost of sales / SG&A
Actuarial (gain) loss on pension and postretirement plans
80  80  —  —  —  43  43  —  —  —  Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income
Legal settlements and commercial disputes —  —  16  Cost of sales / SG&A / Other (charges) gains, net
Other (10) —  —  (10) —  (10) (14) (2) —  Cost of sales / SG&A / Gain (loss) on disposition of businesses and assets, net
Certain Items attributable to Celanese Corporation
422  239  71  47  65  139  77  (1) 13  50 
___________________________
(1)Primarily associated with Winter Storm Uri.
(2)Primarily associated with the sale of our Spondon site.
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Table 9
Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited
2022 2021
(In $ millions, except percentages) (In $ millions, except percentages)
Net earnings (loss) attributable to Celanese Corporation 1,894  1,890 
Adjusted EBIT (Table 1)
2,171  2,473 
Adjusted effective tax rate (Table 3a)
13  % 15  %
Adjusted EBIT tax effected 1,889  2,102 
2022 2021 Average 2021 2020 Average
(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates
1,306  791  1,049  791  496  644 
Long-term debt, net of unamortized deferred financing costs 13,373  3,176  8,275  3,176  3,227  3,202 
Celanese Corporation stockholders' equity 5,637  4,189  4,913  4,189  3,526  3,858 
Invested capital 14,237  7,704 
Return on invested capital (adjusted) 13.3  % 27.3  %
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital
13.3  % 24.5  %
16