CE-2012.3.31-10Q


 
 
 
 
 
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
_______________________________________________________
Form 10-Q
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2012
 
Or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Commission File Number) 001-32410
CELANESE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
98-0420726
(I.R.S. Employer
Identification No.)
 
 
222 West Las Colinas Blvd., Suite 900N
Irving, TX
(Address of Principal Executive Offices)
75039-5421
(Zip Code)
(972) 443-4000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ  No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No þ
The number of outstanding shares of the registrant’s Series A common stock, $0.0001 par value, as of April 17, 2012 was 156,400,883.
 
 
 
 
 



CELANESE CORPORATION AND SUBSIDIARIES

Form 10-Q
For the Quarterly Period Ended March 31, 2012

TABLE OF CONTENTS
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2



Item 1. Financial Statements 
CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
 
Three Months Ended
 
March 31,
 
2012
 
2011
 
(In $ millions, except share and per share data)
Net sales
1,633

 
1,589

Cost of sales
(1,363
)
 
(1,238
)
Gross profit
270

 
351

Selling, general and administrative expenses
(134
)
 
(128
)
Amortization of intangible assets
(13
)
 
(16
)
Research and development expenses
(26
)
 
(23
)
Other (charges) gains, net
—

 
3

Foreign exchange gain (loss), net
1

 
1

Gain (loss) on disposition of businesses and assets, net
—

 
—

Operating profit (loss)
98

 
188

Equity in net earnings (loss) of affiliates
51

 
43

Interest expense
(45
)
 
(55
)
Refinancing expense
—

 
—

Interest income
1

 
1

Dividend income - cost investments
—

 
—

Other income (expense), net
2

 
3

Earnings (loss) from continuing operations before tax
107

 
180

Income tax (provision) benefit
76

 
(42
)
Earnings (loss) from continuing operations
183

 
138

Earnings (loss) from operation of discontinued operations
—

 
6

Gain (loss) on disposition of discontinued operations
—

 
—

Income tax (provision) benefit from discontinued operations
—

 
(2
)
Earnings (loss) from discontinued operations
—

 
4

Net earnings (loss)
183

 
142

Net (earnings) loss attributable to noncontrolling interests
—

 
—

Net earnings (loss) attributable to Celanese Corporation
183

 
142

Cumulative preferred stock dividends
—

 
—

Net earnings (loss) available to common stockholders
183

 
142

Amounts attributable to Celanese Corporation
 

 
 

Earnings (loss) from continuing operations
183

 
138

Earnings (loss) from discontinued operations
—

 
4

Net earnings (loss)
183

 
142

Earnings (loss) per common share - basic
 

 
 

Continuing operations
1.17

 
0.88

Discontinued operations
—

 
0.03

Net earnings (loss) - basic
1.17

 
0.91

Earnings (loss) per common share - diluted
 

 
 

Continuing operations
1.15

 
0.87

Discontinued operations
—

 
0.03

Net earnings (loss) - diluted
1.15

 
0.90

Weighted average shares - basic
156,542,424

 
155,966,259

Weighted average shares - diluted
159,080,760

 
158,666,687


See the accompanying notes to the unaudited interim consolidated financial statements.

3


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)

 
Three Months Ended
 
March 31,
 
2012
 
2011
 
(In $ millions)
Net earnings (loss)
183

 
142

Other comprehensive income (loss), net of tax
 

 
 

Unrealized gain (loss) on marketable securities
—

 
—

Foreign currency translation
26

 
58

Unrealized gain (loss) on interest rate swaps
1

 
9

Pension and postretirement benefits
6

 
3

Total other comprehensive income (loss), net of tax
33

 
70

Total comprehensive income (loss), net of tax
216

 
212

Comprehensive (income) loss attributable to noncontrolling interests
—

 
—

Comprehensive income (loss) attributable to Celanese Corporation
216

 
212


See the accompanying notes to the unaudited interim consolidated financial statements.


4


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions, except share data)
ASSETS
 
 
 
Current assets
 

 
 

Cash and cash equivalents
727

 
682

Trade receivables - third party and affiliates (net of allowance for doubtful accounts - 2012: $9; 2011: $9)
928

 
871

Non-trade receivables, net
207

 
235

Inventories
753

 
712

Deferred income taxes
104

 
104

Marketable securities, at fair value
63

 
64

Other assets
35

 
35

Total current assets
2,817

 
2,703

Investments in affiliates
762

 
824

Property, plant and equipment (net of accumulated depreciation - 2012: $1,375; 2011: $1,316)
3,329

 
3,269

Deferred income taxes
562

 
421

Other assets
368

 
344

Goodwill
783

 
760

Intangible assets, net
202

 
197

Total assets
8,823

 
8,518

LIABILITIES AND EQUITY
 
 
 
Current liabilities
 

 
 

Short-term borrowings and current installments of long-term debt - third party and affiliates
155

 
144

Trade payables - third party and affiliates
758

 
673

Other liabilities
517

 
539

Deferred income taxes
19

 
17

Income taxes payable
22

 
12

Total current liabilities
1,471

 
1,385

Long-term debt
2,875

 
2,873

Deferred income taxes
138

 
92

Uncertain tax positions
176

 
182

Benefit obligations
1,435

 
1,492

Other liabilities
1,187

 
1,153

Commitments and contingencies


 


Stockholders’ equity
 

 
 

Preferred stock, $0.01 par value, 100,000,000 shares authorized (2012 and 2011: 0 issued and outstanding)
—

 
—

Series A common stock, $0.0001 par value, 400,000,000 shares authorized (2012: 179,741,924 issued and 156,375,729 outstanding; 2011: 179,385,105 issued and 156,463,811 outstanding)
—

 
—

Series B common stock, $0.0001 par value, 100,000,000 shares authorized (2012 and 2011: 0 issued and outstanding)
—

 
—

Treasury stock, at cost (2012: 23,366,195 shares; 2011: 22,921,294 shares)
(880
)
 
(860
)
Additional paid-in capital
641

 
627

Retained earnings
2,597

 
2,424

Accumulated other comprehensive income (loss), net
(817
)
 
(850
)
Total Celanese Corporation stockholders’ equity
1,541

 
1,341

Noncontrolling interests
—

 
—

Total equity
1,541

 
1,341

Total liabilities and equity
8,823

 
8,518


See the accompanying notes to the unaudited interim consolidated financial statements.

5


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENT OF EQUITY
 
Three Months Ended
 
March 31, 2012
 
Shares
 
Amount
 
(In $ millions, except share data)
Series A common stock
 

 
 

Balance as of the beginning of the period
156,463,811

 
—

Stock option exercises
341,655

 
—

Purchases of treasury stock
(444,901
)
 
—

Stock awards
15,164

 
—

Balance as of the end of the period
156,375,729

 
—

Treasury stock
 

 
 

Balance as of the beginning of the period
22,921,294

 
(860
)
Purchases of treasury stock, including related fees
444,901

 
(20
)
Balance as of the end of the period
23,366,195

 
(880
)
Additional paid-in capital
 

 
 

Balance as of the beginning of the period
 

 
627

Stock-based compensation, net of tax
 

 
8

Stock option exercises, net of tax
 

 
6

Balance as of the end of the period
 

 
641

Retained earnings
 

 
 

Balance as of the beginning of the period
 

 
2,424

Net earnings (loss) attributable to Celanese Corporation
 

 
183

Series A common stock dividends
 

 
(10
)
Balance as of the end of the period
 

 
2,597

Accumulated other comprehensive income (loss), net
 

 
 

Balance as of the beginning of the period
 

 
(850
)
Other comprehensive income (loss)
 

 
33

Balance as of the end of the period
 

 
(817
)
Total Celanese Corporation stockholders’ equity
 

 
1,541

Noncontrolling interests
 

 
 

Balance as of the beginning of the period
 

 
—

Net earnings (loss) attributable to noncontrolling interests
 

 
—

Balance as of the end of the period
 

 
—

Total equity
 

 
1,541


See the accompanying notes to the unaudited interim consolidated financial statements.



6


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Three Months Ended
 
March 31,
 
2012
 
2011
 
(In $ millions)
Operating activities
 

 
 

Net earnings (loss)
183

 
142

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities
 

 
 

Other charges (gains), net of amounts used
(4
)
 
(9
)
Depreciation, amortization and accretion
77

 
75

Deferred income taxes, net
(94
)
 
(2
)
(Gain) loss on disposition of businesses and assets, net
—

 
—

Refinancing expense
—

 
—

Other, net
72

 
38

Operating cash provided by (used in) discontinued operations
—

 
(2
)
Changes in operating assets and liabilities
 

 
 

Trade receivables - third party and affiliates, net
(47
)
 
(108
)
Inventories
(32
)
 
(60
)
Other assets
19

 
(18
)
Trade payables - third party and affiliates
123

 
75

Other liabilities
(82
)
 
1

Net cash provided by (used in) operating activities
215

 
132

Investing activities
 

 
 

Capital expenditures on property, plant and equipment
(106
)
 
(77
)
Acquisitions, net of cash acquired
(23
)
 
(8
)
Proceeds from sale of businesses and assets, net
—

 
4

Deferred proceeds from Ticona Kelsterbach plant relocation
—

 
—

Capital expenditures related to Ticona Kelsterbach plant relocation
(21
)
 
(54
)
Other, net
(5
)
 
(16
)
Net cash provided by (used in) investing activities
(155
)
 
(151
)
Financing activities
 

 
 

Short-term borrowings (repayments), net
10

 
(5
)
Proceeds from long-term debt
—

 
11

Repayments of long-term debt
(8
)
 
(9
)
Refinancing costs
—

 
—

Purchases of treasury stock, including related fees
(20
)
 
(3
)
Stock option exercises
7

 
5

Series A common stock dividends
(10
)
 
(8
)
Preferred stock dividends
—

 
—

Other, net
—

 
(2
)
Net cash provided by (used in) financing activities
(21
)
 
(11
)
Exchange rate effects on cash and cash equivalents
6

 
12

Net increase (decrease) in cash and cash equivalents
45

 
(18
)
Cash and cash equivalents as of beginning of period
682

 
740

Cash and cash equivalents as of end of period
727

 
722


See the accompanying notes to the unaudited interim consolidated financial statements.


7


CELANESE CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Company and Basis of Presentation
Description of the Company
Celanese Corporation and its subsidiaries (collectively, the “Company”) is a global technology and specialty materials company. The Company’s business involves processing chemical raw materials, such as methanol, carbon monoxide and ethylene, and natural products, including wood pulp, into value-added chemicals, thermoplastic polymers and other chemical-based products.
Definitions
In this Quarterly Report, the term “Celanese” refers to Celanese Corporation, a Delaware corporation, and not its subsidiaries. The term “Celanese US” refers to the Company’s subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.
Basis of Presentation
The unaudited interim consolidated financial statements for the three months ended March 31, 2012 and 2011 contained in this Quarterly Report on Form 10-Q (“Quarterly Report”) were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for all periods presented. The unaudited interim consolidated financial statements and other financial information included in this Quarterly Report, unless otherwise specified, have been presented to separately show the effects of discontinued operations.
In the opinion of management, the accompanying unaudited consolidated balance sheets and related unaudited interim consolidated statements of operations, comprehensive income (loss), cash flows and equity include all adjustments, consisting only of normal recurring items necessary for their fair presentation in conformity with US GAAP. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements as of and for the year ended December 31, 2011, filed on February 10, 2012 with the SEC as part of the Company’s Annual Report on Form 10-K.
Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results to be expected for the entire year.
In the ordinary course of business, the Company enters into contracts and agreements relative to a number of topics, including acquisitions, dispositions, joint ventures, supply agreements, product sales and other arrangements. The Company endeavors to describe those contracts or agreements that are material to its business, results of operations or financial position. The Company may also describe some arrangements that are not material but in which the Company believes investors may have an interest or which may have been included in a Form 8-K filing. Investors should not assume the Company has described all contracts and agreements relative to the Company’s business in this Quarterly Report.
For those consolidated subsidiaries in which the Company's ownership is less than 100%, the outside stockholders' interests are shown as noncontrolling interests.
The Company has reclassified certain prior period amounts to conform to the current period’s presentation.
Estimates and Assumptions
The preparation of unaudited interim consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues, expenses and allocated charges during the reporting period. Significant estimates pertain to impairments of goodwill, intangible assets and other long-lived assets, purchase price allocations, restructuring costs and other (charges) gains, net, income taxes, pension and other postretirement benefits, asset retirement obligations, environmental liabilities and loss contingencies, among others. Actual results could differ from those estimates.

8


2. Recent Accounting Pronouncements
None.
3. Acquisitions, Dispositions, Ventures and Plant Closures
Acquisitions
On January 3, 2012, the Company completed the acquisition of certain assets from Ashland Inc., including two product lines, Vinac® and Flexbond®, which will support the strategic growth of the Company's Emulsions business (Note 6). In February 2011, the Company acquired a business primarily consisting of emulsions process technology from Crown Paints Limited. Both of the acquired operations are included in the Industrial Specialties segment. Pro forma financial information since the respective acquisition dates has not been provided as the acquisitions did not have a material impact on the Company’s financial information.
The Company allocated the purchase price of the acquisitions to identifiable intangible assets acquired based on their estimated fair values. The excess of purchase price over the aggregate fair values was recorded as goodwill. Intangible assets were valued using the relief from royalty and discounted cash flow methodologies which are considered Level 3 measurements under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“FASB ASC Topic 820”). The relief from royalty method estimates the Company’s theoretical royalty savings from ownership of the intangible asset. Key assumptions used in this model include discount rates, royalty rates, growth rates, sales projections and terminal value rates, all of which require significant management judgment and, therefore, are susceptible to change. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment. The Company, with the assistance of third-party valuation consultants, calculated the fair value of the intangible assets acquired to allocate the purchase price at the respective acquisition date.
Plant Closures
• Spondon, Derby, United Kingdom
In August 2010, the Company announced it would consolidate its global acetate manufacturing capabilities by closing its acetate flake and tow manufacturing operations in Spondon, Derby, United Kingdom (Note 13). The Company expects to serve its acetate customers under this proposal by optimizing its global production network, which includes facilities in Lanaken, Belgium; Narrows, Virginia; and Ocotlan, Mexico, as well as the Company's acetate affiliate facilities in China. The Company expects the closure of the acetate flake and tow manufacturing operations in Spondon, Derby, United Kingdom to occur during the second half of 2012. The Spondon, Derby, United Kingdom operations are included in the Consumer Specialties segment.

• Pardies, France
In July 2009, the Company completed the consultation process with the workers council on its “Project of Closure” and social plan related to the Company’s Pardies, France facility pursuant to which the Company ceased all manufacturing operations and associated activities in December 2009 (Note 13). The Pardies, France operations are included in the Acetyl Intermediates segment.



9


4. Marketable Securities, at Fair Value
The Company’s captive insurance companies and nonqualified trusts hold available-for-sale securities for capitalization and funding requirements, respectively.
The amortized cost, gross unrealized gain, gross unrealized loss and fair values for available-for-sale securities by major security type are as follows:
 
 
Amortized
Cost
 
Gross
Unrealized
Gain
 
Gross
Unrealized
Loss
 
Fair
Value
 
 
(In $ millions)
Mutual funds
63

 
—

 
—

 
63

As of March 31, 2012
63

 
—

 
—

 
63

 
 
 
 
 
 
 
 
Mutual funds
64

 
—

 
—

 
64

As of December 31, 2011
64

 
—

 
—

 
64

See Note 16, Fair Value Measurements, for additional information regarding the fair value of the Company's marketable securities.
5. Inventories
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Finished goods
549

 
511

Work-in-process
36

 
38

Raw materials and supplies
168

 
163

Total
753

 
712

6. Goodwill and Intangible Assets, Net
Goodwill
 
Advanced
Engineered
Materials
 
Consumer
Specialties
 
Industrial
Specialties
 
Acetyl
Intermediates
 
Total
 
(In $ millions)
As of December 31, 2011
 

 
 

 
 

 
 

 
 

Goodwill
294

 
246

 
35

 
185

 
760

Accumulated impairment losses
—

 
—

 
—

 
—

 
—

Net book value
294

 
246

 
35

 
185

 
760

Acquisitions (Note 3)
—

 
—

 
8

 
—

 
8

Exchange rate changes
4

 
4

 
—

 
7

 
15

As of March 31, 2012
 
 
 
 
 
 
 
 
 
Goodwill
298

 
250

 
43

 
192

 
783

Accumulated impairment losses
—

 
—

 
—

 
—

 
—

Net book value
298

 
250

 
43

 
192

 
783

The Company assesses the recoverability of the carrying value of its reporting unit goodwill annually during the third quarter of its fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable.

10


Intangible Assets, Net
Finite-lived intangibles are as follows:
 
Licenses
 
Customer-
Related
Intangible
Assets
 
Developed
Technology
 
Covenants
Not to
Compete
and Other
 
Total
 
 
(In $ millions)
 
Gross Asset Value
 

 
 

 
 

 
 

 
 

 
As of December 31, 2011
32

 
513

 
27

 
22

 
594

 
Acquisitions (Note 3)
—

 
4

 
3

 
6

 
13

(1) 
Exchange rate changes
—

 
13

 
—

 
—

 
13

 
As of March 31, 2012
32

 
530

 
30

 
28

 
620

 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Amortization
 
 
 
 
 
 
 
 
 
 
As of December 31, 2011
(13
)
 
(433
)
 
(14
)
 
(18
)
 
(478
)
 
Amortization
(1
)
 
(10
)
 
(1
)
 
(1
)
 
(13
)
 
Exchange rate changes
—

 
(11
)
 
—

 
(1
)
 
(12
)
 
As of March 31, 2012
(14
)
 
(454
)
 
(15
)
 
(20
)
 
(503
)
 
Net book value
18

 
76

 
15

 
8

 
117

 
______________________________
(1)  
Weighted average amortization period of intangible assets acquired was 6 years.
Indefinite-lived intangibles are as follows:
 
Trademarks
and Trade Names
 
(In $ millions)
As of December 31, 2011
81

Acquisitions (Note 3)
2

Exchange rate changes
2

As of March 31, 2012
85

The Company’s trademarks and trade names have an indefinite life. Accordingly, no amortization expense is recorded on these intangible assets. For the three months ended March 31, 2012, the Company did not renew or extend any intangible assets.
Estimated amortization expense for the succeeding five fiscal years is as follows:
 
(In $ millions)
2013
32

2014
21

2015
10

2016
7

2017
6



11


7. Current Other Liabilities
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Salaries and benefits
75

 
101

Environmental (Note 11)
20

 
25

Restructuring (Note 13)
41

 
44

Insurance
17

 
19

Asset retirement obligations
27

 
22

Derivatives (Note 15)
23

 
26

Current portion of benefit obligations
47

 
47

Interest
43

 
25

Sales and use tax/foreign withholding tax payable
18

 
16

Uncertain tax positions
73

 
70

Other
133

 
144

Total
517

 
539

8. Noncurrent Other Liabilities
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Environmental (Note 11)
76

 
71

Insurance
67

 
64

Deferred revenue
39

 
40

Deferred proceeds(1)
920

 
892

Asset retirement obligations
38

 
42

Derivatives (Note 15)
9

 
13

Income taxes payable
3

 
2

Other
35

 
29

Total
1,187

 
1,153

______________________________
(1) 
Primarily relates to proceeds received from the Frankfurt, Germany Airport as part of a settlement for the Company to relocate its Kelsterbach, Germany Ticona operations, included in the Advanced Engineered Materials segment, to a new site (Note 20). Such proceeds will be deferred until the transfer of title to the Frankfurt, Germany Airport.
9. Debt
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates
 
 
 
Current installments of long-term debt
39

 
38

Short-term borrowings, including amounts due to affiliates
116

 
106

Total
155

 
144

The Company's weighted average interest rate on short-term borrowings, including amounts due to affiliates, was 4.0% as of March 31, 2012 compared to 4.3% as of December 31, 2011.

12


 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Long-term debt
 
 
 
Senior credit facilities
 
 
 
Term C loan facility due 2016
1,391

 
1,386

Senior unsecured notes due 2018, interest rate of 6.625%
600

 
600

Senior unsecured notes due 2021, interest rate of 5.875%
400

 
400

Pollution control and industrial revenue bonds, interest rates ranging from 5.7% to 6.7%, due at various dates through 2030
182

 
182

Obligations under capital leases due at various dates through 2054
248

 
248

Other bank obligations, interest rates ranging from 6.3% to 6.7%, due at various dates through 2017
93

 
95

Subtotal
2,914

 
2,911

Current installments of long-term debt
(39
)
 
(38
)
Total
2,875

 
2,873

Senior Notes
In September 2010, Celanese US completed the private placement of $600 million in aggregate principal amount of 6.625% senior unsecured notes due 2018 (the “6.625% Notes”) under an indenture dated September 24, 2010 (the “Indenture”) among Celanese US, Celanese, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee. In April 2011, Celanese US registered the 6.625% Notes under the Securities Act of 1933, as amended (the "Securities Act"). Celanese US pays interest on the 6.625% Notes on April 15 and October 15 of each year which commenced on April 15, 2011. The 6.625% Notes are redeemable, in whole or in part, at any time on or after October 15, 2014 at the redemption prices specified in the Indenture. Prior to October 15, 2014, Celanese US may redeem some or all of the 6.625% Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as specified in the Indenture. The 6.625% Notes are senior unsecured obligations of Celanese US and rank equally in right of payment with all other unsubordinated indebtedness of Celanese US. The 6.625% Notes are guaranteed on a senior unsecured basis by Celanese and each of the domestic subsidiaries of Celanese US that guarantee its obligations under its senior secured credit facilities (the “Subsidiary Guarantors”).
The Indenture contains covenants, including, but not limited to, restrictions on the Company’s ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends or make other restricted payments; engage in transactions with affiliates; or engage in other businesses.
In May 2011, Celanese US completed an offering of $400 million in aggregate principal amount of 5.875% senior unsecured notes due 2021 (the “5.875% Notes”) in a public offering registered under the Securities Act. The 5.875% Notes are guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors.
The 5.875% Notes were issued under an indenture and a first supplemental indenture, each dated May 6, 2011 (the “First Supplemental Indenture”) among Celanese US, Celanese, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee. Celanese US pays interest on the 5.875% Notes on June 15 and December 15 of each year which commenced on December 15, 2011. Prior to June 15, 2021, Celanese US may redeem some or all of the 5.875% Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as specified in the First Supplemental Indenture. The 5.875% Notes are senior unsecured obligations of Celanese US and rank equally in right of payment with all other unsubordinated indebtedness of Celanese US.
The First Supplemental Indenture contains covenants, including, but not limited to, restrictions on the Company’s ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends or make other restricted payments; engage in transactions with affiliates; or engage in other businesses.

13


Senior Credit Facilities
In September 2010, Celanese US, Celanese, and certain of the domestic subsidiaries of Celanese US entered into an amendment agreement (the “Amendment Agreement”) with the lenders under Celanese US’s existing senior secured credit facilities in order to amend and restate the corresponding Credit Agreement, dated as of April 2, 2007 (as previously amended, the “Existing Credit Agreement”, and as amended and restated by the Amendment Agreement, the “Amended Credit Agreement”). Our Amended Credit Agreement consists of the Term C loan facility, the Term B loan facility, a $600 million revolving credit facility terminating in 2015 and a $228 million credit-linked revolving facility terminating in 2014.
In May 2011, Celanese US, through its subsidiaries, prepaid its outstanding Term B loan facility under the Amendment Agreement set to mature in 2014 with an aggregate principal amount of $516 million using proceeds from the 5.875% Notes and cash on hand.
Borrowings under the Amended Credit Agreement bear interest at a variable interest rate based on LIBOR (for US dollars) or EURIBOR (for Euros), or, for US dollar-denominated loans under certain circumstances, a base rate, in each case plus a margin. The margin may increase or decrease 0.25% based on the following:
 
Estimated
Margin as of
 
Estimated Margin
 
Estimated Total Net
Leverage Ratio as of
 
 
Decreases .25%
 
Increases .25%
 
 
March 31, 2012
 
If the Estimated Total Net Leverage is:
 
March 31, 2012
Credit-linked revolving facility
1.50
%
 
 not applicable
 
  > 2.25:1.00
 
1.56

Term C
2.75
%
 
  < = 1.75:1.00
 
  > 2.25:1.00
 
1.56

The margin for borrowings under the revolving credit facility is currently 2.5% above LIBOR or EURIBOR, as applicable, subject to increase or reduction in certain circumstances based on changes in the Company’s corporate credit ratings. Term loan borrowings under the Amended Credit Agreement are subject to amortization at 1% of the initial principal amount per annum, payable quarterly. In addition, the Company pays quarterly commitment fees on the unused portions of the revolving credit facility and credit-linked revolving facility of 0.25% and 1.50% per annum, respectively.
The Amended Credit Agreement is guaranteed by Celanese and certain domestic subsidiaries of Celanese US and is secured by a lien on substantially all assets of Celanese US and such guarantors, subject to certain agreed exceptions (including for certain real property and certain shares of foreign subsidiaries), pursuant to the Guarantee and Collateral Agreement, dated as of April 2, 2007.
As a condition to borrowing funds or requesting letters of credit be issued under the revolving facility, the Company’s first lien senior secured leverage ratio (as calculated as of the last day of the most recent fiscal quarter for which financial statements have been delivered under the revolving facility) cannot exceed the threshold as specified below. Further, the Company’s first lien senior secured leverage ratio must be maintained at or below that threshold while any amounts are outstanding under the revolving credit facility.
The Company’s first lien senior secured leverage ratios and the borrowing capacity under the revolving credit facility are as follows:
 
As of March 31, 2012
 
 
 
 
 
 
 
Estimate, if Fully
 
Borrowing
 
Maximum
 
Estimate
 
Drawn
 
Capacity
 
 
 
 
 
 
 
(In $ millions)
First lien senior secured leverage ratios
3.90 to 1.00
 
1.07 to 1.00
 
1.52 to 1.00
 
600


14


The balances available for borrowing are as follows:
 
As of
 
March 31, 2012
 
(In $ millions)

Revolving credit facility
 

Borrowings outstanding
—

Letters of credit issued
—

Available for borrowing
600

Credit-linked revolving facility
 
Letters of credit issued
74

Available for borrowing
154

The Amended Credit Agreement contains covenants including, but not limited to, restrictions on the Company’s ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends or make other restricted payments; make investments; prepay or modify certain indebtedness; engage in transactions with affiliates; enter into sale-leaseback transactions or hedge transactions; or engage in other businesses.
The Amended Credit Agreement also maintains a number of events of default, including a failure to make any payment of principal or interest when due, a cross default to other debt of Celanese, Celanese US, or their subsidiaries, including the 6.625% Notes and 5.875% Notes, in an aggregate amount equal to more than $40 million and the occurrence of a change of control. Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations under the Amended Credit Agreement.
The Company is in compliance with all of the covenants related to its debt agreements as of March 31, 2012.
10. Benefit Obligations
The components of net periodic benefit costs are as follows:
 
Pension Benefits
 
Postretirement
Benefits
 
Three Months Ended March 31,
 
2012
 
2011
 
2012
 
2011
 
(In $ millions)
Service cost
7

 
7

 
—

 
—

Interest cost
43

 
46

 
3

 
4

Expected return on plan assets
(51
)
 
(50
)
 
—

 
—

Recognized actuarial (gain) loss
14

 
7

 
—

 
(1
)
Prior service credit
—

 
—

 
—

 
—

Curtailment (gain) loss
—

 
(1
)
 
—

 
—

Total
13

 
9

 
3

 
3

Commitments to fund benefit obligations during 2012 are as follows:
 
As of
 
Expected for
 
March 31, 2012
 
2012
 
(In $ millions)
Cash contributions to defined benefit pension plans
56

 
160

Benefit payments from nonqualified trusts related to nonqualified pension plans
4

 
15

Benefit payments to other postretirement benefit plans
7

 
25

The Company’s estimates of its US defined benefit pension plan contributions reflect the provisions of the Pension Protection Act of 2006.


15


The Company participates in a multiemployer defined benefit plan in Germany covering certain employees. The Company’s contributions to the multiemployer defined benefit plan are based on specified percentages of employee contributions and totaled $1 million for the three months ended March 31, 2012.
11. Environmental
General
The Company is subject to environmental laws and regulations worldwide that impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid and hazardous wastes. The Company believes that it is in substantial compliance with all applicable environmental laws and regulations. The Company is also subject to retained environmental obligations specified in various contractual agreements arising from the divestiture of certain businesses by the Company or one of its predecessor companies.
The components of environmental remediation reserves are as follows:
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Demerger obligations (Note 17)
34

 
34

Divestiture obligations (Note 17)
23

 
24

Active sites
21

 
20

US Superfund sites
14

 
14

Other environmental remediation reserves
4

 
4

Total
96

 
96

Remediation
Due to its industrial history and through retained contractual and legal obligations, the Company has the obligation to remediate specific areas on its own sites as well as on divested, orphan or US Superfund sites (as defined below). In addition, as part of the demerger agreement between the Company and Hoechst AG (“Hoechst”), a specified portion of the responsibility for environmental liabilities from a number of Hoechst divestitures was transferred to the Company (Note 17). The Company provides for such obligations when the event of loss is probable and reasonably estimable. The Company believes that environmental remediation costs will not have a material adverse effect on the financial position of the Company, but may have a material adverse effect on the results of operations or cash flows in any given period.
US Superfund Sites
In the US, the Company may be subject to substantial claims brought by US federal or state regulatory agencies or private individuals pursuant to statutory authority or common law. In particular, the Company has a potential liability under the US Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and related state laws (collectively referred to as “Superfund”) for investigation and cleanup costs at certain sites. At most of these sites, numerous companies, including the Company, or one of its predecessor companies, have been notified that the Environmental Protection Agency, state governing bodies or private individuals consider such companies to be potentially responsible parties (“PRP”) under Superfund or related laws. The proceedings relating to these sites are in various stages. The cleanup process has not been completed at most sites and the status of the insurance coverage for some of these proceedings is uncertain. Consequently, the Company cannot accurately determine its ultimate liability for investigation or cleanup costs at these sites.
As events progress at each site for which it has been named a PRP, the Company accrues, as appropriate, a liability for site cleanup. Such liabilities include all costs that are probable and can be reasonably estimated. In establishing these liabilities, the Company considers its shipment of waste to a site, its percentage of total waste shipped to the site, the types of wastes involved, the conclusions of any studies, the magnitude of any remedial actions that may be necessary and the number and viability of other PRPs. Often the Company joins with other PRPs to sign joint defense agreements that settle, among PRPs, each party’s percentage allocation of costs at the site. Although the ultimate liability may differ from the estimate, the Company routinely reviews the liabilities and revises the estimate, as appropriate, based on the most current information available.

16


One such site is the Lower Passaic River Study Area. The Company and 70 other companies are parties to a May 2007 Administrative Order on Consent with the US Environmental Protection Agency (“EPA”) to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of the contaminants in the lower 17-mile stretch known as the Lower Passaic River Study Area. The RI/FS is ongoing and may take several more years to complete. The Company has also been named as a third-party defendant along with more than 200 other entities in an action initially brought by the New Jersey Department of Environmental Protection (“NJDEP”) in the Supreme Court of New Jersey against Occidental Chemical Corporation and several other companies. This suit by the NJDEP seeks recovery of past and future clean-up costs, as well as unspecified economic damages, punitive damages, penalties and a variety of other forms of relief arising from alleged discharges into the Lower Passaic River. 
In 2007, the EPA issued a draft study that evaluated alternatives for early remedial action of a portion of the Passaic River at an estimated cost of $900 million to $2.3 billion. Several parties commented on the draft study, and to date, the EPA has not taken further action. The contamination allegedly released by the Company is likely an insignificant aspect of the final remedy, which would consequently limit the ultimate contribution from the Company. Because the RI/FS is still ongoing, and the EPA has not finalized its study or the scope of requested cleanup, and the Company's assessment that the contamination allegedly released by the Company is likely an insignificant aspect of the final remedy, the Company cannot reliably estimate its portion of the final remedial costs for this matter at this time. However, the Company currently believes that its portion of the costs would be less than approximately 1% to 2%. The Company is vigorously defending these and all related matters.
12. Stockholders’ Equity
Common Stock
The Company’s Board of Directors follows a policy of declaring, subject to legally available funds, a quarterly cash dividend on each share of the Company’s Series A Common Stock, par value $0.0001 per share ("Common Stock") unless the Company’s Board of Directors, in its sole discretion, determines otherwise. The amount available to pay cash dividends is restricted by the Company’s Amended Credit Agreement, the 6.625% Notes and the 5.875% Notes.
In April 2011, the Company announced that its Board of Directors approved a 20% increase in the Company’s quarterly Common Stock cash dividend. The Board of Directors increased the quarterly dividend rate from $0.05 to $0.06 per share of Common Stock on a quarterly basis and $0.20 to $0.24 per share of Common Stock on an annual basis beginning in August 2011.
Treasury Stock
The Company’s Board of Directors authorized the repurchase of the Common Stock as follows:
Date of Board Authorization
As of
March 31, 2012
 
(In $ millions)
February 2008
400

October 2008
100

April 2011
129

Total
629

The authorization gives management discretion in determining the timing and conditions under which shares may be repurchased. The share repurchase activity pursuant to this authorization is as follows:
 
Three Months Ended
 
Total From
February 2008 Through
 
March 31,
 
 
2012
 
2011
 
March 31, 2012
Shares repurchased
444,901

 
69,400

 
12,527,709

Average purchase price per share
$
46.34

 
$
43.42

 
$
38.07

Amount spent on repurchased shares (in millions)
$
20

 
$
3

 
$
476

The purchase of treasury stock reduces the number of shares outstanding and the repurchased shares may be used by the Company for compensation programs utilizing the Company’s stock and other corporate purposes. The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity.

17


Other Comprehensive Income (Loss), Net
 
Three Months Ended March 31,
 
2012
 
2011
 
Gross
Amount
 
Income
Tax
(Provision)
Benefit
 
Net
Amount
 
Gross
Amount
 
Income
Tax
(Provision)
Benefit
 
Net
Amount
 
(In $ millions)
Unrealized gain (loss) on marketable securities
—

 
—

 
—

 
—

 
—

 
—

Foreign currency translation
26

 
—

 
26

 
58

 
—

 
58

Unrealized gain (loss) on interest rate swaps
2

 
(1
)
 
1

 
14

 
(5
)
 
9

Pension and postretirement benefits
12

 
(6
)
 
6

 
6

 
(3
)
 
3

Total
40

 
(7
)
 
33

 
78

 
(8
)
 
70

Adjustments to Accumulated other comprehensive income (loss) are as follows:
 
 
 
Unrealized
Gain (Loss) on
Marketable
Securities
 
Foreign
Currency
Translation
 
Unrealized
Gain (Loss)
on Interest
Rate Swaps
 
Pension and
Postretire-
ment
Benefits
 
Accumulated
Other
Comprehensive
Income
(Loss), Net
 
 
 
(In $ millions)
As of December 31, 2011
(1
)
 
(28
)
 
(57
)
 
(764
)
 
(850
)
Current period change
—

 
26

 
2

 
12

 
40

Income tax (provision) benefit
—

 
—

 
(1
)
 
(6
)
 
(7
)
As of March 31, 2012
(1
)
 
(2
)
 
(56
)
 
(758
)
 
(817
)
13. Other (Charges) Gains, Net
 
Three Months Ended
 
March 31,
 
2012
 
2011
 
(In $ millions)
Employee termination benefits
—

 
(4
)
Ticona Kelsterbach plant relocation (Note 20)
—

 
(13
)
Commercial disputes
—

 
20

Total
—

 
3

2012
No significant Other (charges) gains, net were incurred during the three months ended March 31, 2012.
2011
As a result of the Company's Pardies, France Project of Closure and the planned closure of the Company's Spondon, Derby, United Kingdom facility (Note 3), the Company recorded $1 million and $2 million, respectively, of employee termination benefits during the three months ended March 31, 2011. The Pardies, France facility is included in the Acetyl Intermediates segment.
During March 2011, the Company received consideration of $16 million in connection with the settlement of a claim against a bankrupt supplier. In addition, the Company also recovered an additional $3 million from the settlement of an unrelated commercial dispute. These commercial dispute resolutions are included in the Acetyl Intermediates segment.

18


The changes in the restructuring reserves by business segment are as follows:
 
Advanced
Engineered
Materials
 
Consumer
Specialties
 
Industrial
Specialties
 
Acetyl
Intermediates
 
Other
 
Total
 
(In $ millions)
Employee Termination Benefits
 

 
 

 
 

 
 

 
 

 
 

As of December 31, 2011
8

 
18

 
—

 
5

 
11

 
42

Additions
—

 
1

 
—

 
—

 
—

 
1

Cash payments
(1
)
 
—

 
—

 
(1
)
 
(1
)
 
(3
)
Other changes
—

 
—

 
—

 
—

 
(1
)
 
(1
)
Exchange rate changes
—

 
1

 
—

 
—

 
—

 
1

As of March 31, 2012
7

 
20

 
—

 
4

 
9

 
40

 
 
 
 
 
 
 
 
 
 
 
 
Plant/Office Closures
 

 
 

 
 

 
 

 
 

 
 

As of December 31, 2011
—

 
—

 
—

 
1

 
1

 
2

Additions
—

 
—

 
—

 
—

 
—

 
—

Cash payments
—

 
—

 
—

 
—

 
—

 
—

Other changes
—

 
—

 
—

 
—

 
(1
)
 
(1
)
Exchange rate changes
—

 
—

 
—

 
—

 
—

 
—

As of March 31, 2012
—

 
—

 
—

 
1

 
—

 
1

Total
7

 
20

 
—

 
5

 
9

 
41

14. Income Taxes
 
Three Months Ended
 
March 31,
 
2012
 
2011
Effective income tax rate
(71
)%
 
23
%
The lower effective rate for the three months ended March 31, 2012 is primarily due to foreign tax credit carryforwards partially offset by deferred tax charges related to changes in assessment regarding permanent reinvestment of certain foreign earnings.
During the three months ended March 31, 2012, the Company determined that it was beneficial to amend certain prior year income tax returns to recognize the benefit of available foreign tax credit carryforwards. As a result, the Company recognized a tax benefit of $142 million. The available foreign tax credits are subject to a ten year carryforward period and begin to expire in 2014. The Company expects to fully utilize the credits within the prescribed carryforward period.
On February 15, 2012, the Company amended its existing joint venture and other related agreements with its venture partner in Polyplastics Co., Ltd (“Polyplastics”). The amended agreements (“Agreements”), among other items, modified certain dividend rights, resulting in a cash dividend payment to the Company of $72 million during the three months ended March 31, 2012. In addition, as a result of the Agreements, Polyplastics is required to pay certain annual dividends to the venture partners.  Consequently, Polyplastics' undistributed earnings will no longer be invested indefinitely. Accordingly, the Company recognized a deferred tax liability of $38 million that was recorded to Income tax provision (benefit) in the unaudited interim consolidated statement of operations during the three months ended March 31, 2012, related to the taxable outside basis difference of its investment in Polyplastics.
Subsequent to the execution of the Agreements during the three months ended March 31, 2012, the Company recorded a further net increase of $5 million to the deferred tax liability related to its investment in Polyplastics, comprised of $9 million recorded to Income tax provision (benefit) in the unaudited interim consolidated statement of operations partially offset by $4 million recorded to Foreign currency translation in the unaudited interim consolidated statement of comprehensive income (loss).

19


Liabilities for uncertain tax positions and related interest and penalties are recorded in Uncertain tax positions and current Other liabilities in the unaudited consolidated balance sheets. For the three months ended March 31, 2012, the total unrecognized tax benefits, interest and penalties related to uncertain tax positions decreased by $15 million for interest and changes in uncertain tax positions in US and foreign jurisdictions, and increased $6 million due to exchange rate changes.
The Company's US tax returns for the years 2009 and 2010 are currently under audit by the US Internal Revenue Service and certain of the Company's subsidiaries are under audit in jurisdictions outside of the US. In addition, certain statutes of limitations are scheduled to expire in the near future. It is reasonably possible that a further change in the unrecognized tax benefits may occur within the next twelve months related to the settlement of any of these audits or the lapse of applicable statutes of limitations. Such amounts have been reflected as the current portion of uncertain tax positions (Note 7).
15. Derivative Financial Instruments
Interest Rate Risk Management
To reduce the interest rate risk inherent in the Company’s variable rate debt, the Company utilizes interest rate swap agreements to convert a portion of its variable rate borrowings into a fixed rate obligation. These interest rate swap agreements are designated as cash flow hedges and fix the LIBOR portion of the Company’s US-dollar denominated variable rate borrowings (Note 9). If an interest rate swap agreement is terminated prior to its maturity, the amount previously recorded in Accumulated other comprehensive income (loss), net is recognized into earnings over the period that the hedged transaction impacts earnings. If the hedging relationship is discontinued because it is probable that the forecasted transaction will not occur according to the original strategy, any related amounts previously recorded in Accumulated other comprehensive income (loss), net are recognized into earnings immediately.
US-dollar interest rate swap derivative arrangements are as follows:
As of March 31, 2012
Notional Value
 
Effective Date
 
Expiration Date
 
Fixed Rate (1)
(In $ millions)
 
 
 
 
 
 
1,100

 
January 2, 2012
 
January 2, 2014
 
1.71
%
500

 
January 2, 2014
 
January 2, 2016
 
1.02
%
______________________________
(1) 
Fixes the LIBOR portion of the Company's US-dollar denominated variable rate borrowings (Note 9).
As of December 31, 2011
Notional Value
 
Effective Date
 
Expiration Date
 
Fixed Rate (1)
(In $ millions)
 
 
 
 
 
 
800

 
April 2, 2007
 
January 2, 2012
 
4.92
%
400

 
January 2, 2008
 
January 2, 2012
 
4.33
%
200

 
April 2, 2009
 
January 2, 2012
 
1.92
%
1,100

 
January 2, 2012
 
January 2, 2014
 
1.71
%
______________________________
(1) 
Fixes the LIBOR portion of the Company's US-dollar denominated variable rate borrowings (Note 9).
Foreign Exchange Risk Management
Certain subsidiaries have assets and liabilities denominated in currencies other than their respective functional currencies, which creates foreign exchange risk. The Company also enters into foreign currency forwards and swaps to minimize its exposure to foreign currency fluctuations. Through these instruments, the Company mitigates its foreign currency exposure on transactions with third party entities as well as intercompany transactions. The foreign currency forwards and swaps are not designated as hedges under FASB ASC Topic 815, Derivatives and Hedging. Gains and losses on foreign currency forwards and swaps entered into to offset foreign exchange impacts on intercompany balances are classified as Other income (expense), net, in the unaudited interim consolidated statements of operations. Gains and losses on foreign currency forwards and swaps entered into to offset foreign exchange impacts on all other assets and liabilities are classified as Foreign exchange gain (loss), net, in the unaudited interim consolidated statements of operations.

20


Gross notional values of the foreign currency forwards and swaps are as follows:
 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(In $ millions)
Total
888

 
896


Information regarding changes in the fair value of the Company’s derivative arrangements is as follows:
 
Three Months Ended
 
Three Months Ended
 
 
March 31, 2012
 
March 31, 2011
 
 
Gain (Loss)
Recognized in
Other
Comprehensive
Income (Loss)
 
Gain (Loss)
Recognized in
Earnings (Loss)
 
Gain (Loss)
Recognized in
Other
Comprehensive
Income (Loss)
 
Gain (Loss)
Recognized in
Earnings (Loss)
 
 
(In $ millions)
Derivatives designated as cash flow hedging instruments
 

 
 

 
 

 
 

 
Interest rate swaps
(1
)
(1) 
(3
)
(2) 
(1
)
(3) 
(16
)
(2) 
Derivatives not designated as hedging instruments
 

 
 

 
 

 
 

 
Interest rate swaps
—

 
—

(4) 
—

 
—

(4) 
Foreign currency forwards and swaps
—

 
(10
)
(5) 
—

 
(12
)
(5) 
Total
(1
)
 
(13
)
 
(1
)
 
(28
)
 
______________________________
(1) 
Amount excludes $1 million of tax expense recognized in Other comprehensive income (loss).
(2) 
Amount represents reclassification from Accumulated other comprehensive income (loss), net and is included in Interest expense in the unaudited interim consolidated statements of operations.
(3) 
Amount excludes $1 million of losses associated with the Company’s equity method investments’ derivative activity and $5 million of tax expense recognized in Other comprehensive income (loss).
(4) 
Included in Interest expense in the unaudited interim consolidated statements of operations.
(5) 
Included in Foreign exchange gain (loss), net for operating activity or Other income (expense), net for non-operating activity in the unaudited interim consolidated statements of operations.
See Note 16, Fair Value Measurements, for additional information regarding the fair value of the Company’s derivative arrangements.
16. Fair Value Measurements
The Company follows the provisions of FASB ASC Topic 820 for financial assets and liabilities. FASB ASC Topic 820 establishes a three-tiered fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation.
The three levels of inputs are defined as follows:
Level 1 - unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company
Level 2 - inputs that are observable in the marketplace other than those inputs classified as Level 1
Level 3 - inputs that are unobservable in the marketplace and significant to the valuation

21


The Company’s financial assets and liabilities are measured at fair value on a recurring basis and include securities available for sale and derivative financial instruments. Securities available for sale include equity securities. Derivative financial instruments include interest rate swaps and foreign currency forwards and swaps.
Marketable Securities. Where possible, the Company utilizes quoted prices in active markets to measure debt and equity securities; such items are classified as Level 1 in the hierarchy and include equity securities and US government bonds. When quoted market prices for identical assets are unavailable, varying valuation techniques are used. Common inputs in valuing these assets include, among others, benchmark yields, issuer spreads and recently reported trades. Such assets are classified as Level 2 in the hierarchy and typically include corporate bonds and other US government securities. Mutual funds are valued at the net asset value per share or unit multiplied by the number of shares or units held as of the measurement date.
Derivatives. Derivative financial instruments are valued in the market using discounted cash flow techniques. These techniques incorporate Level 1 and Level 2 inputs such as interest rates and foreign currency exchange rates. These market inputs are utilized in the discounted cash flow calculation considering the instrument’s term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation for interest rate swaps and foreign currency forwards and swaps are observable in the active markets and are classified as Level 2 in the hierarchy.

22


Assets and liabilities measured at fair value on a recurring basis are as follows:
 
Fair Value Measurement Using
 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Total
 
(In $ millions)
Marketable securities, at fair value
 

 
 

 
 

  
Mutual funds
63

 
—

 
63

  
Derivatives designated as cash flow hedging instruments
 
 
 
 
 
 
Interest rate swaps
—

 
3

 
3

(1) 
Derivatives not designated as hedging instruments
 
 
 
 
 
  
Foreign currency forwards and swaps
—

 
3

 
3

(2) 
Total assets as of March 31, 2012
63

 
6

 
69

  
Derivatives designated as cash flow hedging instruments
 

 
 

 
 

  
Interest rate swaps
—

 
(16
)
 
(16
)
(3) 
Interest rate swaps
—

 
(9
)
 
(9
)
(4) 
Derivatives not designated as hedging instruments
 
 
 
 
 
  
Interest rate swaps
—

 
—

 
—

(3) 
Foreign currency forwards and swaps
—

 
(7
)
 
(7
)
(3) 
Total liabilities as of March 31, 2012
—

 
(32
)
 
(32
)
 
Marketable securities, at fair value
 

 
 

 
 

  
Mutual funds
64

 
—

 
64

  
Derivatives not designated as hedging instruments


 


 


  
Foreign currency forwards and swaps
—

 
9

 
9

(2) 
Total assets as of December 31, 2011
64

 
9

 
73

  
Derivatives designated as cash flow hedging instruments
 

 
 

 
 

  
Interest rate swaps
—

 
(21
)
 
(21
)
(3) 
Interest rate swaps
—

 
(13
)
 
(13
)
(4) 
Derivatives not designated as hedging instruments
 
 
 
 
 
 
  Interest rate swaps


 
(2
)
 
(2
)
(3) 
Foreign currency forwards and swaps
—

 
(3
)
 
(3
)
(3) 
Total liabilities as of December 31, 2011
—

 
(39
)
 
(39
)
 
______________________________
(1) 
Included in noncurrent Other assets in the unaudited consolidated balance sheets.
(2) 
Included in current Other assets in the unaudited consolidated balance sheets.
(3) 
Included in current Other liabilities in the unaudited consolidated balance sheets.
(4) 
Included in noncurrent Other liabilities in the unaudited consolidated balance sheets.

23


Carrying values and fair values of financial instruments that are not carried at fair value are as follows:
 
 
 
Fair Value Measurement Using
 
Carrying Amount
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable Inputs
(Level 3)
 
Total
 
 
 
(In $ millions)
As of March 31, 2012
 
 
 
 
 
 
 
Cost investments
148

 
—

 
—

 
—

Insurance contracts in nonqualified trusts
65

 
65

 
—

 
65

Long-term debt, including current installments of long-term debt
2,914

 
2,735

 
248

 
2,983

As of December 31, 2011
 
 
 
 
 
 
 
Cost investments
147

 
—

 
—

 
—

Insurance contracts in nonqualified trusts
69

 
69

 
—

 
69

Long-term debt, including current installments of long-term debt
2,911

 
2,719

 
248

 
2,967

In general, the cost investments included in the table above are not publicly traded and their fair values are not readily determinable; however, the Company believes the carrying values approximate or are less than the fair values.
As of March 31, 2012 and December 31, 2011, the fair values of cash and cash equivalents, receivables, trade payables, short-term borrowings and the current installments of long-term debt approximate carrying values due to the short-term nature of these instruments. These items have been excluded from the table with the exception of the current installments of long-term debt. Additionally, certain noncurrent receivables, principally insurance recoverables, are carried at net realizable value.
The fair value of long-term debt is based on valuations from third-party banks and market quotations.
17. Commitments and Contingencies
The Company is involved in legal and regulatory proceedings, lawsuits and claims incidental to the normal conduct of business, relating to such matters as product liability, land disputes, contracts, antitrust, intellectual property, workers' compensation, chemical exposure, asbestos exposure, prior acquisitions and divestitures, past waste disposal practices and release of chemicals into the environment. The Company is actively defending those matters where the Company is named as a defendant. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, the Company's litigation accruals and estimates of possible loss or range of possible loss (“Possible Loss”) may not represent the ultimate loss to the Company from legal proceedings. For reasonably possible loss contingencies that may be material and when determinable, the Company estimates its Possible Loss, considering that the Company could incur no loss in certain matters. Thus, the Company's exposure and ultimate losses may be higher or lower, and possibly materially so, than the Company's litigation accruals and estimates of Possible Loss. For some matters, the Company is unable, at this time, to estimate its Possible Loss that is reasonably possible of occurring. Generally, the less progress that has been made in the proceedings or the broader the range of potential results, the more difficult for the Company to estimate the Possible Loss that it is reasonably possible the Company could incur. The Company may disclose certain information related to a plaintiff's claim against the Company alleged in the plaintiff's pleadings or otherwise publicly available. While information of this type may provide insight into the potential magnitude of a matter, it does not necessarily represent the Company's estimate of reasonably possible or probable loss. Some of the Company's exposure in legal matters may be offset by applicable insurance coverage. The Company does not consider the possible availability of insurance coverage in determining the amounts of any accruals or any estimates of Possible Loss.
Plumbing Actions
CNA Holdings LLC (“CNA Holdings”), a US subsidiary of the Company, which included the US business now conducted by the Ticona business that is included in the Advanced Engineered Materials segment, along with Shell Oil Company (“Shell”), E.I. DuPont de Nemours and Company (“DuPont”) and others, has been a defendant in a series of lawsuits, including a number of class actions, alleging that plastic resins manufactured by these companies that were utilized by others in the production of plumbing systems for residential property were defective for this use and/or contributed to the failure of such plumbing. Based on, among other things, the findings of outside experts and the successful use of Ticona's acetal copolymer in similar applications, CNA Holdings does not believe Ticona's acetal copolymer was defective for this use or contributed to the failure

24


of the plumbing. In addition, in many cases CNA Holdings' potential future exposure may be limited by, among other things, statutes of limitations and repose.
In November 1995, CNA Holdings, DuPont and Shell entered into national class action settlements in the Cox, et al. v. Hoechst Celanese Corporation, et al., No. 94-0047 (Chancery Ct., Obion County, Tennessee) matter. The time to file claims against the class has expired and the entity established by the court to administer the claims was dissolved in September 2010. In addition between 1995 and 2001, CNA Holdings was named as a defendant in various putative class actions. The majority of these actions have now been dismissed. As a result the Company recorded $59 million in reserve reductions and recoveries from associated insurance indemnifications during 2010. The reserve was further reduced by $4 million during the year ended December 31, 2011 following the dismissal of the remaining US case (St. Croix, Ltd., et al. v. Shell Oil Company d/b/a Shell Chemical Company, Case No. XC-97-CR-467, Virgin Islands Superior Court) which was appealed during the three months ended September 30, 2011.
As of March 31, 2012, the class actions in Canada are subject to a pending class settlement that would result in a dismissal of those cases. The Company does not believe the Possible Loss associated with the remaining matters is material. As of March 31, 2012, the Company did not record any recoveries or reductions in legal reserves related to plumbing actions (Note 13) to Other (charges) gains, net in the unaudited interim consolidated statements of operations.
Polyester Staple Antitrust Litigation
CNA Holdings, the successor in interest to Hoechst Celanese Corporation (“HCC”), Celanese Americas Corporation and Celanese GmbH (collectively, the “Celanese Entities”) and Hoechst, the former parent of HCC, were named as defendants in two actions (involving multiple individual participants) filed in September 2006 by US purchasers of polyester staple fibers manufactured and sold by HCC. The actions alleged that the defendants participated in a conspiracy to fix prices, rig bids and allocate customers of polyester staple sold in the US. These actions were consolidated in a proceeding by a Multi-District Litigation Panel in the US District Court for the Western District of North Carolina styled In re Polyester Staple Antitrust Litigation, MDL 1516. On June 12, 2008 the court dismissed these actions with prejudice against all Celanese Entities in consideration of a payment by the Company. This proceeding related to sales by the polyester staple fibers business which Hoechst sold to KoSa B.V., f/k/a Arteva B.V., a subsidiary of Koch Industries, Inc. (“KoSa”) in 1998. In November 2003, KoSa sought recovery from the Company (Koch Industries, Inc. et al. v. Hoechst Aktiengesellschaft et al., No. 03-cv-8679 Southern District NY) alleging a variety of claims, including indemnification and breach of representations, arising out of the 1998 sale. During the fourth quarter of 2010, the parties settled the case pursuant to a confidential agreement and the case was dismissed with prejudice.
Prior to December 31, 2008, the Company had entered into tolling arrangements with four other alleged US purchasers of polyester staple fibers manufactured and sold by the Celanese Entities. These purchasers were not included in the settlement and one such company filed suit against the Company in December 2008 (Milliken & Company v. CNA Holdings, Inc., Celanese Americas Corporation and Hoechst AG (No. 8-SV-00578 W.D.N.C.)). On September 15, 2011, the case was dismissed with prejudice based on a stipulation and proposed order of voluntary dismissal.
Commercial Actions
In April 2007, Southern Chemical Corporation (“Southern”) filed a petition in the 190th Judicial District Court of Harris County, Texas styled Southern Chemical Corporation v. Celanese Ltd. (Cause No. 2007-25490), seeking declaratory judgment relating to the terms of a multi-year methanol supply contract. The trial court granted the Company's motion for summary judgment in March 2008 dismissing Southern's claims. In September 2009, the intermediate Texas appellate court reversed the trial court decision and remanded the case to the trial court. The Texas Supreme Court subsequently declined both parties' requests that it hear the case. On August 15, 2010, Southern filed a second amended petition adding a claim for breach of contract and seeking equitable damages in an unspecified amount from the Company. Southern amended its complaint again in June, August and November 2011, abandoning its declaratory judgment claim and adding new claims for fraud and tortious interference with a third-party contract. More specifically, Southern now claims the Company “materially misrepresented its intended use of the methanol to be supplied by Southern” and “violated the material terms of the contract and failed to correct these breaches after Southern provided notice.” These alleged breaches include “selling, transferring, swapping or tolling methanol to or with entities other than the Company and to entities or operations outside the U.S. or Mexico.” In the November 2011 complaint, Southern is seeking compensatory damages of $1.3 billion, as well as pre- and post-judgment interest, attorneys' fees and punitive damages equaling two times its actual damages. Southern also is seeking rescission or termination of the contract. Trial has been set for July 17, 2012. The Company is actively defending the matter. The Company believes that Southern's claims lack merit and that its alleged damages are inaccurate and, in any event, grossly inflated. Based on the Company's evaluation of currently available information, including that discovery is ongoing and involves foreign entities, the

25


plaintiff is seeking relief other than compensatory damages, the matter presents meaningful legal uncertainties (including the applicable damage theory(ies)), and there are significant facts and legal claims in dispute, the Company cannot estimate the Possible Loss for this matter, if any, in excess of immaterial amounts accrued.
Award Proceedings in relation to Domination Agreement and Squeeze-Out
The Company's subsidiary, BCP Holdings GmbH (“BCP Holdings”), a German limited liability company, is a defendant in two special award proceedings initiated by minority stockholders of Celanese GmbH seeking the court's review of the amounts (i) of the fair cash compensation and of the guaranteed dividend offered in the purchaser offer under the 2004 Domination Agreement (the “Domination Agreement”) and (ii) the fair cash compensation paid for the 2006 squeeze-out (“Squeeze-Out”) of all remaining stockholders of Celanese GmbH.
Pursuant to a settlement agreement between BCP Holdings and certain former Celanese GmbH stockholders, if the court sets a higher value for the fair cash compensation or the guaranteed payment under the Domination Agreement or the Squeeze-Out compensation, former Celanese GmbH stockholders who ceased to be stockholders of Celanese GmbH due to the Squeeze-Out will be entitled to claim for their shares the higher of the compensation amounts determined by the court in these different proceedings related to the Domination Agreement and the Squeeze-Out. If the fair cash compensation determined by the court is higher than the Squeeze-Out compensation of €66.99, then 1,069,465 shares will be entitled to an adjustment. If the court determines the value of the fair cash compensation under the Domination Agreement to be lower than the original Squeeze-Out compensation, but determines a higher value for the Squeeze-Out compensation, 924,078 shares would be entitled to an adjustment. Payments already received by these stockholders as compensation for their shares will be offset so that persons who ceased to be stockholders of Celanese GmbH due to the Squeeze-Out are not entitled to more than the higher of the amount set in the two court proceedings.
In September 2011, an expert appointed by the court hearing the Domination Agreement stockholders' claims to assist it in determining the value of Celanese GmbH rendered an opinion. The expert opined that the fair cash compensation for these stockholders (145,387 shares) should be increased from €41.92 to €51.86. This non-binding opinion recommends a total increase in share value to €2 million for those claims under the Domination Agreement. The opinion has no effect on the Squeeze-Out proceeding because the share price recommended is lower than the price those stockholders already received in the Squeeze-Out. However, the opinion also advocates that the guaranteed dividend should be increased from €2.89 to €3.79, aggregating an increase in total guaranteed dividends of €1 million to the Squeeze-Out claimants. The Company evaluated the non-binding opinion of the expert and submitted a written response during the three months ended December 31, 2011. The court then asked the expert to update his opinion. No hearing date has been set. No expert has yet been appointed in the Squeeze-Out proceedings.
For those claims brought under the Domination Agreement, based on the Company's evaluation of currently available information, including the non-binding expert opinion, the fact that the court has asked the expert to update his opinion, and the fact that the court may adopt this new opinion or apply its own (there are legal questions about the applicable valuation method), which could increase or decrease the Company's potential exposure, the Company does not believe that the Possible Loss is material.
For those remaining claims brought by the Squeeze-Out claimants, based on the Company's evaluation of currently available information, including that damages sought are unspecified, unsupported or uncertain, the matter presents meaningful legal uncertainties (including novel issues of law and the applicable valuation method), there are significant facts in dispute and the court has not yet appointed an expert, the Company cannot estimate the Possible Loss, if any, at this time.
Guarantees
The Company has agreed to guarantee or indemnify third parties for environmental and other liabilities pursuant to a variety of agreements, including asset and business divestiture agreements, leases, settlement agreements and various agreements with affiliated companies. Although many of these obligations contain monetary and/or time limitations, others do not provide such limitations.
As indemnification obligations often depend on the occurrence of unpredictable future events, the future costs associated with them cannot be determined at this time.
The Company has accrued for all probable and reasonably estimable losses associated with all known matters or claims that have been brought to its attention. These known obligations include the following:

26


•
Demerger Obligations
In connection with the Hoechst demerger, the Company agreed to indemnify Hoechst, and its legal successors, for various liabilities under the demerger agreement, including for environmental liabilities associated with contamination arising either from environmental damage in general ("Category A") or under 19 divestiture agreements entered into by Hoechst prior to the demerger ("Category B") (Note 11).
The Company's obligation to indemnify Hoechst, and its legal successors, is capped under Category B at €250 million. If and to the extent the environmental damage should exceed €750 million in aggregate, the Company's obligation to indemnify Hoechst and its legal successors applies, but is then limited to 33.33% of the remediation cost without further limitations. Cumulative payments under the divestiture agreements as of March 31, 2012 are $57 million. Most of the divestiture agreements have become time barred and/or any notified environmental damage claims have been partially settled.
The Company has also undertaken in the demerger agreement to indemnify Hoechst and its legal successors for (i) 33.33% of any and all Category A liabilities that result from Hoechst being held as the responsible party pursuant to public law or current or future environmental law or by third parties pursuant to private or public law related to contamination and (ii) liabilities that Hoechst is required to discharge, including tax liabilities, which are associated with businesses that were included in the demerger but were not demerged due to legal restrictions on the transfers of such items. These indemnities do not provide for any monetary or time limitations. The Company has not been requested by Hoechst to make any payments in connection with this indemnification. Accordingly, the Company has not made any payments to Hoechst or its legal successors.
Based on the Company's evaluation of currently available information, including the lack of requests for indemnification, the Company cannot estimate the Possible Loss for the remaining demerger obligations, if any, in excess of amounts accrued.
•
Divestiture Obligations
The Company and its predecessor companies agreed to indemnify third-party purchasers of former businesses and assets for various pre-closing conditions, as well as for breaches of representations, warranties and covenants. Such liabilities also include environmental liability, product liability, antitrust and other liabilities. These indemnifications and guarantees represent standard contractual terms associated with typical divestiture agreements and, other than environmental liabilities, the Company does not believe that they expose the Company to any significant risk (Note 11).
The Company has divested numerous businesses, investments and facilities through agreements containing indemnifications or guarantees to the purchasers. Many of the obligations contain monetary and/or time limitations, ranging from one year to thirty years. The aggregate amount of outstanding indemnifications and guarantees provided for under these agreements is $197 million as of March 31, 2012. Other agreements do not provide for any monetary or time limitations.
Based on the Company's evaluation of currently available information, including the number of requests for indemnification or other payment received by the Company, the Company cannot estimate the Possible Loss for the remaining divestiture obligations, if any, in excess of amounts accrued.
Purchase Obligations
In the normal course of business, the Company enters into various purchase commitments for goods and services which extend through 2028. The Company maintains a number of “take-or-pay” contracts for purchases of raw materials, utilities and other services. Certain of the contracts contain a contract termination buy-out provision that allows for the Company to exit the contracts for amounts less than the remaining take-or-pay obligations. The Company does not expect to incur any material losses under take-or-pay contractual arrangements. Additionally, the Company has other outstanding commitments representing maintenance and service agreements, energy and utility agreements, consulting contracts and software agreements. As of March 31, 2012, the Company had unconditional purchase obligations of $3.8 billion.
The Company holds variable interests in entities that supply certain raw materials and services to the Company. The variable interests primarily relate to cost-plus contractual arrangements with the suppliers and recovery of capital expenditures for certain plant assets plus a rate of return on such assets. The entities are not consolidated because the Company is not the primary beneficiary of the entities as it does not have the power to direct the activities of the entities that most significantly impact the entities' economic performance. Related to these variable interest entities, the Company has $6 million and $135 million of capital lease obligations included in current installments of long-term debt and Long-term debt, respectively, and $117 million of related machinery and equipment included in Property, plant, and equipment, net in the unaudited consolidated balance sheet as of March 31, 2012. The Company's maximum exposure to loss as a result of its involvement with these variable interest entities as of March 31, 2012 is included within the take-or-pay obligation discussed above and relates

27


primarily to contract termination penalties.
During March 2010, the Company successfully completed an amended raw material purchase agreement with a supplier who had filed for bankruptcy. During March 2011, the Company received consideration of $16 million in connection with the settlement of a claim against this bankrupt supplier. The consideration was recorded to Other charges (gains), net in the unaudited interim consolidated statements of operations in the Acetyl Intermediates segment. During April 2011, the Company received additional consideration of $1 million related to the same settlement.
18. Segment Information
 
Advanced
Engineered
Materials
 
Consumer
Specialties
 
Industrial
Specialties
 
Acetyl
Intermediates
 
Other
Activities
 
Eliminations
 
Consolidated
 
(In $ millions)
 
Three Months Ended March 31, 2012
Net sales
317

  
 
264

(1) 
 
309

 
852

(1) 
 
—

 
(109
)
 
1,633

 
Other (charges) gains, net
—

 
 
(1
)
 
 
—

 
—

 
 
1

 
—

 
—

 
Equity in net earnings (loss) of affiliates
43

  
 
1

  
 
—

 
1

 
 
6

 
—

 
51

 
Earnings (loss) from continuing operations before tax
64

  
 
40

  
 
19

 
61

 
 
(77
)
 
—

 
107

 
Depreciation and amortization
27

  
 
9

  
 
15

 
20

 
 
3

 
—

 
74

 
Capital expenditures
7

  
 
16

  
 
8

 
31

 
 
8

 
—

 
70

(2) 
 
As of March 31, 2012
Goodwill and intangibles, net
391

 
 
280

 
 
74

 
240

 
 
—

 
—

 
985

 
Total assets
2,786

 
 
1,198

 
 
968

 
2,153

 
 
1,718

 
—

 
8,823

 
 
Three Months Ended March 31, 2011
Net sales
328

 
 
266

(1) 
 
290

 
813

(1) 
 
1

 
(109
)
 
1,589

  
Other (charges) gains, net
(13
)
 
 
(1
)
 
 
—

 
18

 
 
(1
)
 
—

 
3

 
Equity in net earnings (loss) of affiliates
34

 
 
1

  
 
—

 
2

  
 
6

 
—

 
43

 
Earnings (loss) from continuing operations before tax
73

 
 
55

 
 
25

 
114

  
 
(87
)
 
—

 
180

 
Depreciation and amortization
21

 
 
12

  
 
10

 
25

 
 
4

 
—

 
72

 
Capital expenditures
17

 
 
13

  
 
12

 
15

  
 
2

 
—

 
59

(2) 
 
As of December 31, 2011
Goodwill and intangibles, net
391

 
 
277

 
 
54

 
235

 
 
—

 
—

 
957

 
Total assets
2,787

 
 
1,154

 
 
901

 
2,035

 
 
1,641

 
—

 
8,518

 
_______________________________________
(1) 
Net sales for Acetyl Intermediates and Consumer Specialties include inter-segment sales of $108 million and $1 million, respectively, for the three months ended March 31, 2012 and $108 million and $1 million, respectively, for the three months ended March 31, 2011.
(2) 
Excludes expenditures related to the relocation of the Company’s Ticona plant in Kelsterbach (Note 20) and includes a decrease in accrued capital expenditures of $36 million and $18 million for the three months ended March 31, 2012 and 2011, respectively.

28


19. Earnings (Loss) Per Share
 
Three Months Ended March 31,
 
2012
 
2011
 
Basic
 
Diluted
 
Basic
 
Diluted
 
(In $ millions, except share and per share data)
Amounts attributable to Celanese Corporation
 

 
 

 
 

 
 

Earnings (loss) from continuing operations
183

 
183

 
138

 
138

Earnings (loss) from discontinued operations
—

 
—

 
4

 
4

Net earnings (loss)
183

 
183

 
142

 
142

Cumulative preferred stock dividends
—

 
—

 
—

 
—

Net earnings (loss) available to common stockholders
183

 
183

 
142

 
142

Weighted-average shares - basic
156,542,424

 
156,542,424

 
155,966,259

 
155,966,259

Dilutive stock options
 

 
1,855,015

 
 

 
1,992,598

Dilutive restricted stock units
 

 
683,321

 
 

 
707,830

Assumed conversion of preferred stock
 

 
—

 
 

 
—

Weighted-average shares - diluted

 
159,080,760

 

 
158,666,687

Per share
 

 
 

 
 

 
 

Earnings (loss) from continuing operations
1.17

 
1.15

 
0.88

 
0.87

Earnings (loss) from discontinued operations
—

 
—

 
0.03

 
0.03

Net earnings (loss)
1.17

 
1.15

 
0.91

 
0.90


Securities not included in the computation of diluted net earnings per share as their effect would have been antidilutive are as follows:
 
Three Months Ended
 
March 31,
 
2012
 
2011
Stock options
—

 
180,625

Restricted stock units
—

 
—

Total
—

 
180,625

20. Plant Relocation
In November 2006, the Company finalized a settlement agreement with the Frankfurt, Germany Airport (“Fraport”) to relocate the Kelsterbach, Germany Ticona operations resolving several years of legal disputes related to the planned Fraport expansion. As a result of the settlement, the Company transitioned Ticona’s operations from Kelsterbach to the Frankfurt Hoechst Industrial Park in the Rhine Main area in Germany. Under the original agreement, Fraport agreed to pay the Company a total of €670 million to offset costs associated with the transition of the operations from its prior location and the closure of the Kelsterbach plant. The Company subsequently expanded the scope of the new production facilities.
The Company received its final payment from Fraport of €110 million in June 2011 and ceased POM operations at the Kelsterbach, Germany Ticona facility prior to July 31, 2011. In September 2011, the Company announced the opening of its new POM production facility in Frankfurt Hoechst Industrial Park, Germany.
The Fraport agreement requires the Company to complete certain activities no later than December 31, 2013 at which time title to the site will transfer to Fraport. Assets of €70 million included in Property, plant and equipment, net and €39 million included in noncurrent Other assets in the unaudited consolidated balance sheets will be transferred to Fraport or otherwise disposed of upon the transfer of title to Fraport.


29


A summary of the financial statement impact associated with the Ticona Kelsterbach plant relocation is as follows:
 
Three Months Ended
 
Total From
Inception Through
 
March 31,
 
 
2012
 
2011
 
March 31, 2012
 
(In $ millions)
Deferred proceeds (1)
—

 
—

 
907

Costs expensed
—

 
13

 
106

Costs capitalized (2)
13

 
49

 
1,105

Lease buyout
—

 
—

 
22

Employee termination benefits
—

 
—

 
8

_____________________________
(1) 
Included in noncurrent Other liabilities in the unaudited consolidated balance sheets. Amounts reflect the US dollar equivalent at the time of receipt.
(2) 
Includes a decrease in accrued capital expenditures of $8 million and $5 million for the three months ended March 31, 2012 and 2011, respectively.
21. Consolidating Guarantor Financial Information
The 6.625% Notes and the 5.875% Notes (collectively, the “Notes”) were issued by Celanese US (the “Issuer”) and are guaranteed by Celanese Corporation (the “Parent Guarantor”) and the Subsidiary Guarantors (Note 9). The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor. The Parent Guarantor and Subsidiary Guarantors have guaranteed the Notes fully and unconditionally and jointly and severally.
For cash management purposes, the Company transfers cash between Parent Guarantor, Issuer, Subsidiary Guarantors and non-guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments. As a result, the Company presents such intercompany financing activities, contributions and dividends within the category where the ultimate use of cash to third parties is presented in the accompanying unaudited interim consolidated statements of cash flows.
The Company has not presented separate financial information and other disclosures for each of its Subsidiary Guarantors because it believes such financial information and other disclosures would not provide investors with any additional information that would be material in evaluating the sufficiency of the guarantees.
The unaudited interim consolidating financial statements for the Parent Guarantor, the Issuer, the Subsidiary Guarantors and the non-guarantors are as follows:











30


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF OPERATIONS
 
Three Months Ended March 31, 2012
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
Net sales
—

 
—

 
640

 
1,249

 
(256
)
 
1,633

Cost of sales
—

 
—

 
(482
)
 
(1,148
)
 
267

 
(1,363
)
Gross profit
—

 
—

 
158

 
101

 
11

 
270

Selling, general and administrative expenses
—

 
—

 
(46
)
 
(88
)
 
—

 
(134
)
Amortization of intangible assets
—

 
—

 
(5
)
 
(8
)
 
—

 
(13
)
Research and development expenses
—

 
—

 
(16
)
 
(10
)
 
—

 
(26
)
Other (charges) gains, net
—

 
—

 
1

 
(1
)
 
—

 
—

Foreign exchange gain (loss), net
—

 
—

 
—

 
1

 
—

 
1

Gain (loss) on disposition of businesses and assets, net
—

 
—

 
—

 
—

 
—

 
—

Operating profit (loss)
—

 
—

 
92

 
(5
)
 
11

 
98

Equity in net earnings (loss) of affiliates
183

 
197

 
40

 
42

 
(411
)
 
51

Interest expense
—

 
(48
)
 
(11
)
 
(18
)
 
32

 
(45
)
Refinancing expense
—

 
—

 
—

 
—

 
—

 
—

Interest income
—

 
15

 
16

 
2

 
(32
)
 
1

Dividend income - cost investments
—

 
—

 
—

 
—

 
—

 
—

Other income (expense), net
—

 
1

 
—

 
1

 
—

 
2

Earnings (loss) from continuing operations before tax
183

 
165

 
137

 
22

 
(400
)
 
107

Income tax (provision) benefit
—

 
18

 
62

 
(1
)
 
(3
)
 
76

Earnings (loss) from continuing operations
183

 
183

 
199

 
21

 
(403
)
 
183

Earnings (loss) from operation of discontinued operations
—

 
—

 
—

 
—

 
—

 
—

Gain (loss) on disposition of discontinued operations
—

 
—

 
—

 
—

 
—

 
—

Income tax (provision) benefit from discontinued operations
—

 
—

 
—

 
—

 
—

 
—

Earnings (loss) from discontinued operations
—

 
—

 
—

 
—

 
—

 
—

Net earnings (loss)
183

 
183

 
199

 
21

 
(403
)
 
183

Net (earnings) loss attributable to noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

Net earnings (loss) attributable to Celanese Corporation
183

 
183

 
199

 
21

 
(403
)
 
183




31


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF OPERATIONS
 
Three Months Ended March 31, 2011
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
Net sales
—

 
—

 
615

 
1,231

 
(257
)
 
1,589

Cost of sales
—

 
—

 
(436
)
 
(1,051
)
 
249

 
(1,238
)
Gross profit
—

 
—

 
179

 
180

 
(8
)
 
351

Selling, general and administrative expenses
—

 
—

 
(39
)
 
(89
)
 
—

 
(128
)
Amortization of intangible assets
—

 
—

 
(4
)
 
(12
)
 
—

 
(16
)
Research and development expenses
—

 
—

 
(13
)
 
(10
)
 
—

 
(23
)
Other (charges) gains, net
—

 
—

 
19

 
(16
)
 
—

 
3

Foreign exchange gain (loss), net
—

 
—

 
—

 
1

 
—

 
1

Gain (loss) on disposition of businesses and assets, net
—

 
—

 
—

 
—

 
—

 
—

Operating profit (loss)
—

 
—

 
142

 
54

 
(8
)
 
188

Equity in net earnings (loss) of affiliates
142

 
178

 
28

 
36

 
(341
)
 
43

Interest expense
—

 
(51
)
 
(12
)
 
(10
)
 
18

 
(55
)
Refinancing expense
—

 
—

 
—

 
—

 
—

 
—

Interest income
—

 
6

 
9

 
4

 
(18
)
 
1

Dividend income - cost investments
—

 
—

 
—

 
—

 
—

 
—

Other income (expense), net
—

 
2

 
—

 
1

 
—

 
3

Earnings (loss) from continuing operations before tax
142

 
135

 
167

 
85

 
(349
)
 
180

Income tax (provision) benefit
—

 
7

 
(44
)
 
(6
)
 
1

 
(42
)
Earnings (loss) from continuing operations
142

 
142

 
123

 
79

 
(348
)
 
138

Earnings (loss) from operation of discontinued operations
—

 
—

 
6

 
—

 
—

 
6

Gain (loss) on disposition of discontinued operations
—

 
—

 
—

 
—

 
—

 
—

Income tax (provision) benefit from discontinued operations
—

 
—

 
(2
)
 
—

 
—

 
(2
)
Earnings (loss) from discontinued operations
—

 
—

 
4

 
—

 
—

 
4

Net earnings (loss)
142

 
142

 
127

 
79

 
(348
)
 
142

Net (earnings) loss attributable to noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

Net earnings (loss) attributable to Celanese Corporation
142

 
142

 
127

 
79

 
(348
)
 
142



32


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 
Three Months Ended March 31, 2012
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
Net earnings (loss)
183

 
183

 
199

 
21

 
(403
)
 
183

Other comprehensive income (loss), net of tax
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities
—

 
—

 
—

 
—

 
—

 
—

Foreign currency translation
26

 
26

 
(11
)
 
(6
)
 
(9
)
 
26

Unrealized gain (loss) on interest rate swaps
1

 
1

 
—

 
—

 
(1
)
 
1

Pension and postretirement benefits
6

 
6

 
6

 
(2
)
 
(10
)
 
6

Total other comprehensive income (loss), net of tax
33

 
33

 
(5
)
 
(8
)
 
(20
)
 
33

Total comprehensive income (loss), net of tax
216

 
216

 
194

 
13

 
(423
)
 
216

Comprehensive (income) loss attributable to noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

Comprehensive income (loss) attributable to Celanese Corporation
216

 
216

 
194

 
13

 
(423
)
 
216


33


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 
Three Months Ended March 31, 2011
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
Net earnings (loss)
142

 
142

 
127

 
79

 
(348
)
 
142

Other comprehensive income (loss), net of tax
 
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities
—

 
—

 
—

 
—

 
—

 
—

Foreign currency translation
58

 
58

 
(19
)
 
77

 
(116
)
 
58

Unrealized gain (loss) on interest rate swaps
9

 
9

 
—

 
—

 
(9
)
 
9

Pension and postretirement benefits
3

 
3

 
3

 
—

 
(6
)
 
3

Total other comprehensive income (loss), net of tax
70

 
70

 
(16
)
 
77

 
(131
)
 
70

Total comprehensive income (loss), net of tax
212

 
212

 
111

 
156

 
(479
)
 
212

Comprehensive (income) loss attributable to noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

Comprehensive income (loss) attributable to Celanese Corporation
212

 
212

 
111

 
156

 
(479
)
 
212



34


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATING BALANCE SHEETS
 
As of March 31, 2012
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
ASSETS
 

 
 

 
 

 
 

 
 

 
 

Current assets
 

 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
—

 
—

 
135

 
592

 
—

 
727

Trade receivables - third party and affiliates
—

 
—

 
322

 
729

 
(123
)
 
928

Non-trade receivables, net
—

 
16

 
1,671

 
532

 
(2,012
)
 
207

Inventories, net
—

 
—

 
205

 
602

 
(54
)
 
753

Deferred income taxes
—

 
—

 
87

 
17

 
—

 
104

Marketable securities, at fair value
—

 
—

 
63

 
—

 
—

 
63

Other assets
—

 
4

 
14

 
34

 
(17
)
 
35

Total current assets
—

 
20

 
2,497

 
2,506

 
(2,206
)
 
2,817

Investments in affiliates
1,515

 
3,149

 
1,485

 
549

 
(5,936
)
 
762

Property, plant and equipment, net
—

 
—

 
756

 
2,573

 
—

 
3,329

Deferred income taxes
—

 
17

 
524

 
21

 
—

 
562

Other assets
—

 
1,947

 
133

 
321

 
(2,033
)
 
368

Goodwill
—

 
—

 
306

 
477

 
—

 
783

Intangible assets, net
—

 
—

 
79

 
123

 
—

 
202

Total assets
1,515

 
5,133

 
5,780

 
6,570

 
(10,175
)
 
8,823

LIABILITIES AND EQUITY
Current liabilities
 

 
 

 
 

 
 

 
 

 
 

Short-term borrowings and current installments of long-term debt - third party and affiliates
—

 
1,526

 
180

 
137

 
(1,688
)
 
155

Trade payables - third party and affiliates
—

 
—

 
267

 
614

 
(123
)
 
758

Other liabilities
—

 
64

 
333

 
476

 
(356
)
 
517

Deferred income taxes
—

 
16

 
(16
)
 
19

 
—

 
19

Income taxes payable
(29
)
 
(376
)
 
415

 
14

 
(2
)
 
22

Total current liabilities
(29
)
 
1,230

 
1,179

 
1,260

 
(2,169
)
 
1,471

Noncurrent liabilities
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
—

 
2,377

 
835

 
1,691

 
(2,028
)
 
2,875

Deferred income taxes
—

 
—

 
42

 
96

 
—

 
138

Uncertain tax positions
3

 
1

 
32

 
140

 
—

 
176

Benefit obligations
—

 
—

 
1,285

 
150

 
—

 
1,435

Other liabilities
—

 
10

 
105

 
1,085

 
(13
)
 
1,187

Total noncurrent liabilities
3

 
2,388

 
2,299

 
3,162

 
(2,041
)
 
5,811

Total Celanese Corporation stockholders’ equity
1,541

 
1,515

 
2,302

 
2,148

 
(5,965
)
 
1,541

Noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

Total equity
1,541

 
1,515

 
2,302

 
2,148

 
(5,965
)
 
1,541

Total liabilities and equity
1,515

 
5,133

 
5,780

 
6,570

 
(10,175
)
 
8,823



35


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATING BALANCE SHEETS
 
As of December 31, 2011
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
ASSETS
 

 
 

 
 

 
 

 
 

 
 

Current assets
 

 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
—

 
—

 
133

 
549

 
—

 
682

Trade receivables - third party and affiliates
—

 
—

 
297

 
694

 
(120
)
 
871

Non-trade receivables, net
—

 
10

 
1,651

 
562

 
(1,988
)
 
235

Inventories, net
—

 
—

 
187

 
590

 
(65
)
 
712

Deferred income taxes
—

 
—

 
87

 
17

 
—

 
104

Marketable securities, at fair value
—

 
—

 
64

 
—

 
—

 
64

Other assets
—

 
6

 
18

 
45

 
(34
)
 
35

Total current assets
—

 
16

 
2,437

 
2,457

 
(2,207
)
 
2,703

Investments in affiliates
1,315

 
2,978

 
1,530

 
535

 
(5,534
)
 
824

Property, plant and equipment, net
—

 
—

 
735

 
2,534

 
—

 
3,269

Deferred income taxes
—

 
17

 
382

 
22

 
—

 
421

Other assets
—

 
1,903

 
132

 
296

 
(1,987
)
 
344

Goodwill
—

 
—

 
298

 
462

 
—

 
760

Intangible assets, net
—

 
—

 
69

 
128

 
—

 
197

Total assets
1,315

 
4,914

 
5,583

 
6,434

 
(9,728
)
 
8,518

LIABILITIES AND EQUITY
Current liabilities
 

 
 

 
 

 
 

 
 

 
 

Short-term borrowings and current installments of long-term debt - third party and affiliates
—

 
1,492

 
176

 
131

 
(1,655
)
 
144

Trade payables - third party and affiliates
—

 
—

 
258

 
535

 
(120
)
 
673

Other liabilities
—

 
63

 
353

 
506

 
(383
)
 
539

Deferred income taxes
—

 
16

 
(16
)
 
17

 
—

 
17

Income taxes payable
(29
)
 
(373
)
 
384

 
35

 
(5
)
 
12

Total current liabilities
(29
)
 
1,198

 
1,155

 
1,224

 
(2,163
)
 
1,385

Noncurrent liabilities
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
—

 
2,372

 
834

 
1,650

 
(1,983
)
 
2,873

Deferred income taxes
—

 
—

 
—

 
92

 
—

 
92

Uncertain tax positions
3

 
16

 
27

 
136

 
—

 
182

Benefit obligations
—

 
—

 
1,346

 
146

 
—

 
1,492

Other liabilities
—

 
13

 
99

 
1,055

 
(14
)
 
1,153

Total noncurrent liabilities
3

 
2,401

 
2,306

 
3,079

 
(1,997
)
 
5,792

Total Celanese Corporation stockholders’ equity
1,341

 
1,315

 
2,122

 
2,131

 
(5,568
)
 
1,341

Noncontrolling interests
—

 
—

 
—

 
—

 
—

 
—

Total equity
1,341

 
1,315

 
2,122

 
2,131

 
(5,568
)
 
1,341

Total liabilities and equity
1,315

 
4,914

 
5,583

 
6,434

 
(9,728
)
 
8,518


36


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF CASH FLOWS
 
Three Months Ended March 31, 2012
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
Net cash provided by (used in) operating activities
—

 
—

 
109

 
106

 
—

 
215

Investing activities
 

 
 

 
 

 
 

 
 

 
 

Capital expenditures on property, plant and equipment
—

 
—

 
(54
)
 
(52
)
 
—

 
(106
)
Acquisitions, net of cash acquired
—

 
—

 
(23
)
 
—

 
—

 
(23
)
Proceeds from sale of businesses and assets, net
—

 
—

 
—

 
—

 
—

 
—

Deferred proceeds from Ticona Kelsterbach plant relocation
—

 
—

 
—

 
—

 
—

 
—

Capital expenditures related to Ticona Kelsterbach plant relocation
—

 
—

 
—

 
(21
)
 
—

 
(21
)
Other, net
—

 
—

 
(3
)
 
(2
)
 
—

 
(5
)
Net cash provided by (used in) investing activities
—

 
—

 
(80
)
 
(75
)
 
—

 
(155
)
Financing activities
 

 
 

 
 

 
 

 
 

 
 

Short-term borrowings (repayments), net
—

 
—

 
3

 
7

 
—

 
10

Proceeds from long-term debt
—

 
—

 
—

 
—

 
—

 
—

Repayments of long-term debt
—

 
(3
)
 
(1
)
 
(4
)
 
—

 
(8
)
Refinancing costs
—

 
—

 
—

 
—

 
—

 
—

Proceeds and repayments from intercompany financing activities
—

 
3

 
(3
)
 
—

 
—

 
—

Purchases of treasury stock, including related fees
(20
)
 
—

 
—

 
—

 
—

 
(20
)
Dividends from subsidiary
23

 
23

 
—

 
—

 
(46
)
 
—

Dividends to parent
—

 
(23
)
 
(23
)
 
—

 
46

 
—

Contributions from parent to subsidiary
—

 
—

 
(3
)
 
3

 
—

 
—

Stock option exercises
7

 
—

 
—

 
—

 
—

 
7

Series A common stock dividends
(10
)
 
—

 
—

 
—

 
—

 
(10
)
Preferred stock dividends
—

 
—

 
—

 
—

 
—

 
—

Other, net
—

 
—

 
—

 
—

 
—

 
—

Net cash provided by (used in) financing activities
—

 
—

 
(27
)
 
6

 
—

 
(21
)
Exchange rate effects on cash and cash equivalents
—

 
—

 
—

 
6

 
—

 
6

Net increase (decrease) in cash and cash equivalents
—

 
—

 
2

 
43

 
—

 
45

Cash and cash equivalents as of beginning of period
—

 
—

 
133

 
549

 
—

 
682

Cash and cash equivalents as of end of period
—

 
—

 
135

 
592

 
—

 
727


37


CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF CASH FLOWS
 
Three Months Ended March 31, 2011
 
Parent
Guarantor
 
Issuer
 
Subsidiary
Guarantors
 
Non-
Guarantors
 
Eliminations
 
Consolidated
 
(In $ millions)
Net cash provided by (used in) operating activities
—

 
—

 
102

 
30

 
—

 
132

Investing activities
 

 
 

 
 

 
 

 
 

 
 

Capital expenditures on property, plant and equipment
—

 
—

 
(32
)
 
(45
)
 
—

 
(77
)
Acquisitions, net of cash acquired
—

 
—

 
(8
)
 
—

 
—

 
(8
)
Proceeds from sale of businesses and assets, net
—

 
—

 
1

 
3

 
—

 
4

Deferred proceeds from Ticona Kelsterbach plant relocation
—

 
—

 
—

 
—

 
—

 
—

Capital expenditures related to Ticona Kelsterbach plant relocation
—

 
—

 
—

 
(54
)
 
—

 
(54
)
Other, net
—

 
—

 
(2
)
 
(14
)
 
—

 
(16
)
Net cash provided by (used in) investing activities
—

 
—

 
(41
)
 
(110
)
 
—

 
(151
)
Financing activities
 

 
 

 
 

 
 

 
 

 
 

Short-term borrowings (repayments), net
—

 
—

 
(6
)
 
1

 
—

 
(5
)
Proceeds from long term debt
—

 
—

 
—

 
11

 
—

 
11

Repayments of long-term debt
—

 
(5
)
 
—

 
(4
)
 
—

 
(9
)
Refinancing costs
—

 
—

 
—

 
—

 
—

 
—

Proceeds and repayments from intercompany financing activities
—

 
5

 
(5
)
 
—

 
—

 
—

Purchases of treasury stock, including related fees
(3
)
 
—

 
—

 
—

 
—

 
(3
)
Dividends from subsidiary
9

 
9

 
—

 
—

 
(18
)
 
—

Dividends to parent
—

 
(9
)
 
(9
)
 
—

 
18

 
—

Contributions from parent to subsidiary
—

 
—

 
—

 
—

 
—

 
—

Stock option exercises
5

 
—

 
—

 
—

 
—

 
5

Series A common stock dividends
(8
)
 
—

 
—

 
—

 
—

 
(8
)
Preferred stock dividends
—

 
—

 
—

 
—

 
—

 
—

  Other, net
—

 
—

 
(2
)
 
—

 
—

 
(2
)
Net cash provided by (used in) financing activities
3

 
—

 
(22
)
 
8

 
—

 
(11
)
Exchange rate effects on cash and cash equivalents
—

 
—

 
—

 
12

 
—

 
12

Net increase (decrease) in cash and cash equivalents
3

 
—

 
39

 
(60
)
 
—

 
(18
)
Cash and cash equivalents as of beginning of period
—

 
—

 
128

 
612

 
—

 
740

Cash and cash equivalents as of end of period
3

 
—

 
167

 
552

 
—

 
722




38


22. Subsequent Events
On April 5, 2012, the Company declared a quarterly cash dividend of $0.06 per share on its Common Stock amounting to $9 million. The cash dividends are for the period from February 1, 2012 to April 30, 2012 and will be paid on May 1, 2012 to holders of record as of April 17, 2012.
On April 23, 2012, the Company announced that its Board of Directors approved a 25% increase in the Company's quarterly Common Stock cash dividend. The Directors increased the quarterly dividend rate from $0.06 to $0.075 per share of Common Stock on a quarterly basis and $0.24 to $0.30 per share of Common Stock on an annual basis. The new dividend rate will be applicable to dividends payable beginning in August 2012.








39


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
In this Quarterly Report on Form 10-Q (“Quarterly Report”), the term “Celanese” refers to Celanese Corporation, a Delaware corporation, and not its subsidiaries. The terms the “Company,” “we,” “our” and “us,” refer to Celanese and its subsidiaries on a consolidated basis. The term “Celanese US” refers to the Company’s subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.
The following discussion should be read in conjunction with the Celanese Corporation and Subsidiaries consolidated financial statements as of and for the year ended December 31, 2011, filed on February 10, 2012 with the Securities and Exchange Commission (“SEC”) as part of the Company’s Annual Report on Form 10-K (the “2011 Form 10-K”) and the unaudited interim consolidated financial statements and notes thereto included elsewhere in this Quarterly Report.
Investors are cautioned that the forward-looking statements contained in this section and other parts of this Quarterly Report involve both risk and uncertainty. Several important factors could cause actual results to differ materially from those anticipated by these statements. Many of these statements are macroeconomic in nature and are, therefore, beyond the control of management. See “Special Note Regarding Forward-Looking Statements” below and at the beginning of our 2011 Form 10-K.
Special Note Regarding Forward-Looking Statements
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) and other parts of this Quarterly Report contain certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. You can identify these statements by the fact that they do not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other expectations regarding future events. Generally, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “may,” “can,” “could,” “might,” “will” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements reflect our current views and beliefs with respect to future events at the time that the statements are made, are not historical facts or guarantees of future performance and are subject to significant risks, uncertainties and other factors that are difficult to predict and many of which are outside of our control. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate and, accordingly, should not have undue reliance placed upon them. All forward-looking statements made in this Quarterly Report are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this Quarterly Report will increase with the passage of time. We undertake no obligation, and disclaim any duty, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in our expectations or otherwise.
See Part I - Item 1A. Risk Factors of our 2011 Form 10-K and subsequent periodic filings we make with the SEC for a description of risk factors that could significantly affect our financial results. In addition, the following factors could cause our actual results to differ materially from those results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include, among other things:
•
changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate;
•
the length and depth of product and industry business cycles particularly in the automotive, electrical, textiles, electronics and construction industries;
•
changes in the price and availability of raw materials, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources;
•
the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases;
•
the ability to maintain plant utilization rates and to implement planned capacity additions and expansions;
•
the ability to reduce or maintain at their current levels production costs and improve productivity by implementing technological improvements to existing plants;
•
increased price competition and the introduction of competing products by other companies;
•
changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property;

40


•
costs and potential disruption or interruption of production or operations due to accidents, cyber security incidents, terrorism or political unrest, or other unforeseen events or delays in construction of facilities;
•
potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relating to climate change;
•
potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate;
•
changes in currency exchange rates and interest rates;
•
our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; and
•
various other factors, both referenced and not referenced in this Quarterly Report.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Quarterly Report as anticipated, believed, estimated, expected, intended, planned or projected.
Overview
We are a global technology and specialty materials company. We are one of the world’s largest producers of acetyl products, which are intermediate chemicals, for nearly all major industries, as well as a leading global producer of high performance engineered polymers that are used in a variety of high-value applications. As a recognized innovator in the chemicals industry, we engineer and manufacture a wide variety of products essential to everyday living. Our broad product portfolio serves a diverse set of end-use applications including paints and coatings, textiles, automotive applications, consumer and medical applications, performance industrial applications, filter media, paper and packaging, chemical additives, construction, consumer and industrial adhesives, and food and beverage applications. Our products enjoy leading global positions due to our large global production capacity, operating efficiencies, proprietary production technology and competitive cost structures.
Our large and diverse global customer base primarily consists of major companies in a broad array of industries. We hold geographically balanced global positions and participate in diversified end-use applications. We combine a demonstrated track record of execution, strong performance built on shared principles and objectives, and a clear focus on growth and value creation. Known for operational excellence and execution of our business strategies, we deliver value to customers around the globe with best-in-class technologies.
2012 Highlights:
•
We completed the acquisition of certain assets from Ashland Inc., including two product lines, Vinac® and Flexbond®, which will support the strategic growth of our Emulsions business.
•
We received key government approvals necessary to proceed with previously announced plans to modify and enhance our existing integrated acetyl facility at the Nanjing Chemical Industrial Park in China to produce ethanol for industrial uses. Based upon continued advancements to our TCX® ethanol process technology, we now expect to have approximately 30 to 40 percent additional ethanol production capacity above the originally announced 200,000 tons with no increase in the capital investment for the modification and enhancement. The unit is expected to startup in mid-2013.
•
Moody's Investors Service and Standard & Poor's Ratings Services both upgraded its outlook for Celanese to "Positive" from "Stable." In raising our outlook, both agencies improved operating performance, debt reduction as well as its operational, geographical and product diversity.
•
We announced that our Board of Directors approved a 25% increase in our quarterly Series A Common Stock cash dividend. The Board of Directors increased the quarterly dividend rate from $0.06 to $0.075 per share of Common Stock on a quarterly basis and $0.24 to $0.30 per share of Common Stock on an annual basis. The new dividend rate will be applicable to dividends payable beginning in August 2012.

41


Results of Operations

Financial Highlights
 
Three Months Ended
 
 
 
March 31,
 
 
 
2012
 
2011
 
Change
 
(unaudited)
 
(In $ millions)
Statement of Operations Data
 

 
 

 
 
Net sales
1,633

 
1,589

 
44

Gross profit
270

 
351

 
(81
)
Selling, general and administrative expenses
(134
)
 
(128
)
 
(6
)
Other (charges) gains, net
—

 
3

 
(3
)
Operating profit (loss)
98

 
188

 
(90
)
Equity in net earnings of affiliates
51

 
43

 
8

Interest expense
(45
)
 
(55
)
 
10

Dividend income - cost investments
—

 
—

 
—

Earnings (loss) from continuing operations before tax
107

 
180

 
(73
)
Amounts attributable to Celanese Corporation
 

 
 

 


Earnings (loss) from continuing operations
183

 
138

 
45

Earnings (loss) from discontinued operations
—

 
4

 
(4
)
Net earnings (loss)
183

 
142

 
41

Other Data
 

 
 

 
 
Depreciation and amortization
74

 
72

 
2

Earnings from continuing operations before tax as a percentage of net sales
6.6
%
 
11.3
%
 
(4.7
)%

 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(unaudited)
 
(In $ millions)
Balance Sheet Data
 

 
 

Cash and cash equivalents
727

 
682

 
 
 
 
Short-term borrowings and current installments of long-term debt - third party and affiliates
155

 
144

Long-term debt
2,875

 
2,873

Total debt
3,030

 
3,017


 
As of
 
As of
 
March 31, 2012
 
December 31, 2011
 
(unaudited)
 
(In $ millions)
Trade receivables, net
928

 
871

Inventories
753

 
712

Trade payables - third party and affiliates
(758
)
 
(673
)
Trade working capital
923

 
910


42


Consolidated Results – Three Months Ended March 31, 2012 Compared with Three Months Ended March 31, 2011
Net sales changed $44 million during the three months ended March 31, 2012 compared to the same period in 2011 primarily as a result of increased volumes in the Acetyl Intermediates and Industrial Specialties segments. Increased volumes accounted for 3% of the consolidated net sales increase. Continued recessionary trends in the European economy, lower demand in Asia, and a temporary production interruption at one of our Consumer Specialties facilities impacted volumes across our Advanced Engineered Materials and our Consumer Specialties segments. Despite this environment, pricing increased across all of our segments, except Acetyl Intermediates, in response to higher raw material costs, contributing to the 1% positive pricing impact on consolidated net sales. We expect raw material costs to increase by $100 million in 2012 as compared to 2011. Acetyl Intermediates pricing was impacted by the lingering effects of the fourth quarter 2011 industry destocking, primarily driven by the uncertainty in the European region, as well as lower demand in Asia outside of China. Consolidated net sales were negatively impacted by 1% for unfavorable foreign currency effects, primarily relating to the Euro and Renminbi.
Operating profit decreased during the three months ended March 31, 2012 compared to the same period in 2011 by 48%. Higher raw material costs in all segments affected consolidated operating profit, with ethylene being the primary source of the increase, with average industry prices increasing approximately 6%(a). Higher depreciation and spending also contributed to lower operating profit as our businesses invested in plant expansions and other restructuring activities.
As a percentage of net sales, selling, general and administrative expenses increased slightly from 8.1% to 8.2% for the three months ended March 31, 2012 as compared to the same period in 2011.
Other (charges) gains, net changed $(3) million for the three months ended March 31, 2012 as compared to the same period in 2011:
 
Three Months Ended
 
March 31,
 
2012
 
2011
 
(unaudited)
 
(In $ millions)
Employee termination benefits
—

 
(4
)
Ticona Kelsterbach plant relocation
—

 
(13
)
Commercial disputes
—

 
20

Total
—

 
3

No Ticona Kelsterbach plant relocation-related costs were incurred in Other (charges) gains, net during the three months ended March 31, 2012. The Ticona Kelsterbach plant is included in our Advanced Engineered Materials segment. See Note 20 in the accompanying unaudited interim consolidated financial statements for further information regarding the Ticona Kelsterbach plant relocation.
During the three months ended March 31, 2011, we received consideration of $16 million in connection with the settlement of a claim against a bankrupt supplier. In addition, the Company also recovered an additional $3 million from the settlement of an unrelated commercial dispute. These commercial dispute resolutions are included in the Acetyl Intermediates segment. No such settlements occurred in the three months ended March 31, 2012.
Our effective income tax rate for the three months ended March 31, 2012 was (71)% compared to 23% for the three months ended March 31, 2011. The lower effective tax rate was primarily due to the decision to amend certain prior year tax returns to recognize foreign tax credit carryforwards of $142 million offset by deferred taxes of $47 million related to changes in our assessment regarding the permanent reinvestment of certain foreign earnings related to an existing strategic affiliate.
___________________________
(a) Based on average industry prices per IHS Chemical Price database.


43


Selected Data by Business Segment
 
Three Months Ended
 
 
 
March 31,
 
 
 
2012
 
2011
 
Change
 
(unaudited)
 
(In $ millions, except percentages)
Net sales
 

 
 

 
 

Advanced Engineered Materials
317

 
328

 
(11
)
Consumer Specialties
264

 
266

 
(2
)
Industrial Specialties
309

 
290

 
19

Acetyl Intermediates
852

 
813

 
39

Other Activities
—

 
1

 
(1
)
Inter-segment eliminations
(109
)
 
(109
)
 
—

Total
1,633

 
1,589

 
44

Other (charges) gains, net
 

 
 

 
 

Advanced Engineered Materials
—

 
(13
)
 
13

Consumer Specialties
(1
)
 
(1
)
 
—

Industrial Specialties
—

 
—

 
—

Acetyl Intermediates
—

 
18

 
(18
)
Other Activities
1

 
(1
)
 
2

Total
—

 
3

 
(3
)
Operating profit (loss)
 

 
 

 
 

Advanced Engineered Materials
21

 
38

 
(17
)
Consumer Specialties
39

 
54

 
(15
)
Industrial Specialties
19

 
25

 
(6
)
Acetyl Intermediates
60

 
112

 
(52
)
Other Activities
(41
)
 
(41
)
 
—

Total
98

 
188

 
(90
)
Earnings (loss) from continuing operations before tax
 

 
 

 
 

Advanced Engineered Materials
64

 
73

 
(9
)
Consumer Specialties
40

 
55

 
(15
)
Industrial Specialties
19

 
25

 
(6
)
Acetyl Intermediates
61

 
114

 
(53
)
Other Activities
(77
)
 
(87
)
 
10

Total
107

 
180

 
(73
)
Depreciation and amortization
 

 
 

 
 

Advanced Engineered Materials
27

 
21

 
6

Consumer Specialties
9

 
12

 
(3
)
Industrial Specialties
15

 
10

 
5

Acetyl Intermediates
20

 
25

 
(5
)
Other Activities
3

 
4

 
(1
)
Total
74

 
72

 
2

Operating margin(1)
 

 
 

 
 

Advanced Engineered Materials
6.6
%
 
11.6
%

(5.0
)%
Consumer Specialties
14.8
%
 
20.3
%

(5.5
)%
Industrial Specialties
6.1
%
 
8.6
%

(2.5
)%
Acetyl Intermediates
7.0
%
 
13.8
%

(6.8
)%
Total
6.0
%
 
11.8
%

(5.8
)%
______________________________
(1) 
Defined as operating profit (loss) divided by net sales.

44


Factors Affecting Business Segment Net Sales
The percentage increase (decrease) in net sales from the period ended March 31, 2011 to the period ended March 31, 2012 attributable to each of the factors indicated for each of our business segments is as follows:
 
Volume
 
Price
 
Currency
 
Other
 
Total
 
(unaudited)
 
(In percentages)
Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011
 

 
 

 
 

 
 

 
 

Advanced Engineered Materials
(5
)
 
3

 
(2
)
 
1

(1) 
(3
)
Consumer Specialties
(8
)
 
7

 
—

 
—

 
(1
)
Industrial Specialties
5

 
4

 
(2
)
 
—

  
7

Acetyl Intermediates
8

 
(2
)
 
(1
)
 
—

  
5

Total Company
3

 
1

 
(1
)
 
—


3

___________________________
(1)2011 includes the effects of the two product lines acquired in May 2010 from DuPont Performance Polymers.


45


Business Segments – Three Months Ended March 31, 2012 Compared with Three Months Ended March 31, 2011

Advanced Engineered Materials
 
Three Months Ended
 
 
 
March 31,
 
Change
in $
 
2012
 
2011
 
 
(unaudited)
 
(In $ millions, except percentages)
Net sales
317

 
328

 
(11
)
Net sales variance
 

 
 

 
 

Volume
(5
)
%
 

 
 

Price
3

%
 

 
 

Currency
(2
)
%
 

 
 

Other
1

%
 

 
 

Other (charges) gains, net
—

 
(13
)
 
13

Operating profit (loss)
21

 
38

 
(17
)
Operating margin
6.6

%
11.6

%
 

Equity in net earnings (loss) of affiliates
43

 
34

 
9

Earnings (loss) from continuing operations before tax
64

 
73

 
(9
)
Depreciation and amortization
27

 
21

 
6

Our Advanced Engineered Materials segment develops, produces and supplies a broad portfolio of high performance specialty polymers for application in automotive, medical and electronics products, as well as other consumer and industrial applications. Together with our strategic affiliates, our Advanced Engineered Materials segment is a leading participant in the global specialty polymers industry. The primary products of Advanced Engineered Materials are polyoxymethylene, also commonly known as polyacetal (“POM”), long-fiber reinforced thermoplastics (“LFT”), polybutylene terephthalate (“PBT”), polyethylene terephthalate (“PET”), GUR® ultra-high molecular weight polyethylene, liquid crystal polymers (“LCP”) and polycyclohexylene-dimethylene terephthalate (“PCT”). POM, LFT, PBT, PET and PCT are used in a broad range of products including automotive components, medical devices, electronics, appliances and industrial applications. GUR® ultra-high molecular weight polyethylene is used in battery separators, conveyor belts, filtration equipment, coatings and medical devices. Primary end uses for LCP are electrical and electronics applications or products. Polyphenylene sulfide ("PPS"), sold under the Fortron® brand, is a key product of Fortron Industries LLC, one of our strategic affiliates. PPS is used in a wide variety of automotive and other applications, especially those requiring heat and/or chemical resistance.
Advanced Engineered Materials’ net sales changed $(11) million for the three months ended March 31, 2012 compared to the same period in 2011 as a result of lower demand in industrial goods and electronics end-use applications in the European and Asian regions, reflecting the challenging economic environments, primarily in Europe. These lower volumes were partially offset by higher volumes in North America due to the stronger automotive industry, as well as higher pricing across the majority of product lines. The weaker Euro also resulted in an unfavorable currency impact on net sales.
Operating profit changed $(17) million for the three months ended March 31, 2012 compared to the same period in 2011. The higher pricing offset increased raw materials, but could not offset higher expenses, primarily increased depreciation associated with the opening of the new POM production facility in Frankfurt Hoechst Industrial Park, Germany, costs for integrating manufacturing operations from recently acquired product lines and investing in the Company's compounding operations in Asia, and other innovation initiatives. Ethylene costs increased due to higher crude oil and naphtha pricing, with average industry prices increasing approximately 6%(a). Favorable energy costs partially offset the impact from higher raw material costs. Average industry natural gas prices for the quarter dropped 32%(a) from the prior period.
Depreciation and amortization increased $6 million from prior year due to the opening of the new POM production facility. Other charges decreased by $13 million with the reduction in charges associated with the relocation of our Kelsterbach, Germany POM plant.
Earnings (loss) from continuing operations before tax changed $(9) million for the three months ended March 31, 2012, compared to the same period in 2011 as a result of decreased operating profit resulting from reduced sales volumes and higher depreciation and integration costs discussed above, partially offset by an increase in equity in net earnings of affiliates. Net earnings from affiliates were up $9 million from prior period results primarily driven by our Ibn Sina venture.

46


Consumer Specialties
 
Three Months Ended
 
 
 
March 31,
 
Change
in $
 
2012
 
2011
 
 
(unaudited)
 
(In $ millions, except percentages)
Net sales
264

 
266

 
(2
)
Net sales variance
 

 
 

 
 

Volume
(8
)
%
 

 
 

Price
7

%
 

 
 

Currency
—

%
 

 
 

Other
—

%
 

 
 

Other (charges) gains, net
(1
)
 
(1
)
 
—

Operating profit (loss)
39

 
54

 
(15
)
Operating margin
14.8

%
20.3

%
 

Equity in net earnings (loss) of affiliates
1

 
1

 
—

Dividend income - cost investments
—

 
1

 
(1
)
Earnings (loss) from continuing operations before tax
40

 
55

 
(15
)
Depreciation and amortization
9

 
12

 
(3
)
Our Consumer Specialties segment consists of our Acetate Products and Nutrinova businesses, which serve consumer-driven applications. Our Acetate Products business is a leading producer and supplier of cellulose acetate flake, film and tow, primarily used in filter products applications. Our Nutrinova business is a leading international supplier of premium quality ingredients for the food, beverage and pharmaceuticals industries. Nutrinova produces and sells Sunett®, a high intensity sweetener, and is one of the world's largest producers of food protection ingredients, such as sorbates and sorbic acid.
Net sales for Consumer Specialties were slightly lower for the three months ended March 31, 2012 as compared to the same period in 2011. Lower volumes were substantially offset by increased pricing. Acetate Products volumes for the three months ended March 31, 2012 were impacted by a temporary production interruption at our Narrows, Virginia Acetate Products facility, with the Acetate Products volume decline accounting for the vast majority of the 8% decline in overall Consumer Specialties volumes. Acetate tow prices increased on average 7%, primarily in the North America and Asia regions driving the increase in pricing.
Operating profit changed $(15) million for the three months ended March 31, 2012 as compared to the same period in 2011 as higher pricing was able to offset higher raw material and energy costs but could not offset the lower volumes. The production interruption was also a major factor for increased spending with $10 million being spent on related maintenance and reliability efforts.
Depreciation and amortization decreased $3 million compared to the same period in 2011 primarily due to the absence of accelerated depreciation related to the planned closing of our acetate flake and tow manufacturing operations in Spondon, Derby, United Kingdom.
Our Chinese Acetate ventures pay a dividend in the second quarter of each fiscal year, based on the ventures' performance for the preceding year. During 2011, we received cash dividends of $78 million from our Chinese Acetate ventures. We expect to receive slightly higher dividends from our Chinese Acetate ventures during 2012.

47


Industrial Specialties
 
Three Months Ended
 
 
 
March 31,
 
Change
 
2012
 
2011
 
in $
 
(unaudited)
 
(In $ millions, except percentages)
Net sales
309

 
290

 
19

Net sales variance
 

 
 

 
 

Volume
5

%
 

 
 

Price
4

%
 

 
 

Currency
(2
)
%
 

 
 

Other
—

%
 

 
 

Other (charges) gains, net
—

 
—

 
—

Operating profit (loss)
19

 
25

 
(6
)
Operating margin
6.1

%
8.6

%
 

Earnings (loss) from continuing operations before tax
19

 
25

 
(6
)
Depreciation and amortization
15

 
10

 
5

Our Industrial Specialties segment includes our Emulsions and EVA Performance Polymers businesses. The Emulsions business is a leading global producer of vinyl acetate-based emulsions and develops products and application technologies to improve performance, create value and drive innovation in applications such as paints and coatings, adhesives, construction, glass fiber, textiles and paper. Celanese emulsions products are sold under globally and regionally recognized brands including EcoVAE®, Mowilith®, Vinamul®, Celvolit®, BriteCoatTM, TufCORTM, and AvicorTM. On January 3, 2012, the Company completed the acquisition of certain assets from Ashland Inc., including two product lines, Vinac® and Flexbond®, which will support the strategic growth of the Celanese Emulsions business. EVA Performance Polymers is a leading North American manufacturer of a full range of low-density polyethylene and specialty EVA resins and compounds. Sold under the Ateva® and VitalDoseTM brands, these products are used in many applications, including flexible packaging films, lamination film products, hot melt adhesives, medical products, automotive, carpeting and photovoltaic cells.
Net sales changed $19 million for the three months ended March 31, 2012 compared to the same period in 2011. Net sales for Industrial Specialties increased primarily due to higher volumes and increased pricing for our Emulsions products partially due to product mix. Higher Emulsions product pricing in North America and Europe was offset slightly by lower Emulsions product pricing in Asia and lower pricing for EVA Performance Polymers products. The majority of the higher Emulsions volumes were attributable to the acquisition of two product lines, Vinac® and Flexbond®, from Ashland Inc. In addition, our recent China Emulsions facility expansion and sales of innovative applications in North America contributed to the increase in volumes. These favorable volumes were partially offset by lower demand in Europe due to the weak economy. Net sales were negatively impacted by currency effects of 2% as the stronger dollar against the Euro and the Renminbi resulted in lower sales in Europe and Asia Pacific.
Operating profit changed $(6) million for the three months ended March 31, 2012 compared to the same period in 2011. Operating profit decreased 24% as higher volumes and pricing offset higher raw material costs, primarily ethylene, but did not completely offset increased depreciation and amortization due to our investments in capacity at our Emulsions facility in Nanjing, China and our EVA Performance Polymers facility in Edmonton, Alberta, Canada as well as spending related to product lines acquired from Ashland Inc.
Depreciation and amortization costs increased $5 million due to accelerated depreciation related to efficiency initiatives at our EVA Performance Polymers production facility in Edmonton, Alberta, Canada , as well as increased amortization in Emulsions relating to the product lines acquired from Ashland Inc. and the China capacity expansion.

48


Acetyl Intermediates
 
Three Months Ended
 
 
 
March 31,
 
Change
 
2012
 
2011
 
in $
 
(unaudited)
 
(In $ millions, except percentages)
Net sales
852

 
813

 
39

Net sales variance
 

 
 

 
 

Volume
8

%
 

 
 

Price
(2
)
%
 

 
 

Currency
(1
)
%
 

 
 

Other
—

%
 

 
 

Other (charges) gains, net
—

 
18

 
(18
)
Operating profit (loss)
60

 
112

 
(52
)
Operating margin
7.0

%
13.8

%
 

Equity in net earnings (loss) of affiliates
1

 
2

 
(1
)
Earnings (loss) from continuing operations before tax
61

 
114

 
(53
)
Depreciation and amortization
20

 
25

 
(5
)
Our Acetyl Intermediates segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (“VAM”), acetic anhydride and acetate esters. These products are generally used as starting materials for colorants, paints, adhesives, coatings and medicines. This business segment also produces organic solvents and intermediates for pharmaceutical, agricultural and chemical products.
Acetyl Intermediates’ net sales changed $39 million during the three months ended March 31, 2012 compared to the same period in 2011, primarily as a result of higher downstream product volumes, partially offset by lower prices and unfavorable currency impacts. Volumes increased 8%, mainly due to higher VAM and acetic anhydride demand. Lower acetic acid prices primarily accounted for the 2% pricing related decrease. During the three months ended March 31, 2012, lower industry utilization compared to the same period in 2011 resulted in decreased industry prices. The industry destocking of inventory that took place across the acetyl chain during the three months ended December 31, 2011 had a lagging effect in the first quarter of 2012, impacting volumes and prices. We do not believe current margin conditions are appropriate or reflective of the value of our acetyl products. As a result, we took action during the three months ended March 31, 2012 and idled our 600,000 ton Singapore acetic acid plant.
Operating profit changed by $(52) million during the three months ended March 31, 2012 compared to the same period in 2011. The decrease in operating profit is primarily due to lower prices and higher raw material costs partially offset by higher volumes. Ethylene was a primary factor of the higher raw material costs, with average industry prices increasing approximately 6%(a) over the prior period. Unfavorable foreign currency translation effects also contributed 10% to the decrease in operating profit.
Other gains decreased by $18 million for the three months ended March 31, 2012 compared to the same period in 2011 impacting operating profit. For the three months ended March 31, 2011, we received consideration of $16 million in connection with the settlement of a claim against a bankrupt supplier and $3 million for the resolution of a commercial dispute. In 2012 no such settlements or similar gains occurred. Depreciation and amortization for the three months ended March 31, 2012 decreased by $5 million mainly due to certain customer-related intangibles being fully amortized in 2011.
Other Activities
Other Activities primarily consists of corporate center costs, including financing and administrative activities such as legal, accounting and treasury functions, interest income and expense associated with our financing and our captive insurance companies.
The operating loss for Other Activities did not change for the three months ended March 31, 2012 compared to the same period in 2011. Higher selling, general and administrative expenses of $6 million for the three months ended March 31, 2012 were primarily due to business optimization initiatives and executive compensation offset by a decrease in restructuring related expenses.

49


Liquidity and Capital Resources
Our primary source of liquidity is cash generated from operations, available cash and cash equivalents and dividends from our portfolio of strategic investments. In addition, as of March 31, 2012 we have $154 million available for borrowing under our credit-linked revolving facility and $600 million available under our revolving credit facility to assist, if required, in meeting our working capital needs and other contractual obligations.
While our contractual obligations, commitments and debt service requirements over the next several years are significant, we continue to believe we will have available resources to meet our liquidity requirements, including debt service, in 2012. If our cash flow from operations is insufficient to fund our debt service and other obligations, we may be required to use other means available to us such as increasing our borrowings, reducing or delaying capital expenditures, seeking additional capital or seeking to restructure or refinance our indebtedness. There can be no assurance, however, that we will continue to generate cash flows at or above current levels.
In January 2011, we signed letters of intent to construct and operate one, and possibly two industrial ethanol production facilities in China. The sites selected were Nanjing, China at the Nanjing Chemical Industrial Park, and Zhuhai, China at the Gaolan Port Economic Zone. We expect to begin industrial ethanol production within 30 months following project approvals with anticipated initial nameplate capacity of 400,000 tons per year per unit and an initial investment of approximately $300 million per unit. In June 2011, we announced our plans to accelerate our entry into the industrial ethanol business six to 12 months by modifying and enhancing our existing integrated acetyl facility at the Nanjing Chemical Industrial Park with our TCX® advanced technology. In March 2012, we announced we had received key government approvals necessary to proceed with our plans to modify and enhance our Nanjing facility and that we expect a 30-40% increase in the ethanol unit's total capacity above the 200,000 tons per year previously announced by mid-2013. 
In June 2011, we broke ground on a technology development unit for ethanol production at our facility in Clear Lake, Texas, which is expected to be operational by mid-2012. We also intend to construct a new research and development facility at our Clear Lake site to continue the advancement of our acetyl and TCX® technologies.
In April 2010, we announced that, through our strategic affiliate Ibn Sina, we will construct a 50,000 ton POM production facility in Saudi Arabia. Our pro rata share of invested capital in the POM expansion is expected to total approximately $165 million over a four year period which began in late 2010. We anticipate related cash outflows for capital expenditures in 2012 will be $15 million to $20 million.
Cash outflows for capital expenditures are expected to be in the range of $350 million to $400 million in 2012, excluding amounts related to the relocation of our Ticona plant in Kelsterbach and capacity expansion in Europe. Per the terms of our agreement with the Frankfurt, Germany Airport, we ceased POM operations at our Kelsterbach, Germany facility prior to July 31, 2011 and in September 2011 announced the opening of our new POM production facility in Frankfurt Hoechst Industrial Park, Germany. We expect related cash outflows for capital expenditures related to the continued expansion of the new POM production facility in 2012 to be approximately €30 million.
In December 2009, we announced plans with China National Tobacco Corporation to expand the acetate flake and tow capacity at the venture’s Nantong facility and in 2010 we received formal approval to expand flake and tow capacities, each by 30,000 tons. Our Chinese Acetate ventures fund their operations using operating cash flow. During 2011 and 2010, we made contributions related to the capacity expansion in Nantong of $8 million and $12 million, respectively. We expect to contribute an additional $9 million to the Nantong expansion in 2012.
In addition to exit-related costs associated with the closure of the Spondon, Derby, United Kingdom acetate flake and tow manufacturing operations, we expect to incur capital expenditures in certain capacity and efficiency improvements, principally at our Lanaken, Belgium facility, to optimize our global production network. We expect total cash outflows of $13 million in 2012.
As a result of the National Emission Standard for Hazardous Air Pollutants for Industrial, Commercial, and Institutional Boilers and Process Heaters (“Boiler MACT”) regulations discussed in Item 1A. Risk Factors in our 2011 Form 10-K, we preliminarily estimate our costs in the US to exceed $100 million in total over the next four years, depending on the timing and requirements of the final rule.

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On a stand-alone basis, Celanese has no material assets other than the stock of its subsidiaries and no independent external operations of its own. As such, Celanese generally will depend on the cash flow of its subsidiaries and their abilities to pay dividends and make other distributions to Celanese in order for Celanese to meet its obligations, including its obligations under its senior credit facilities and its senior notes and to pay dividends on its Series A common stock.
Cash Flows
Cash and cash equivalents increased by $45 million to $727 million as of March 31, 2012 as compared to December 31, 2011. As of March 31, 2012, $591 million of the $727 million of cash and cash equivalents was held by our foreign subsidiaries. If these funds are needed for our operations in the US, we may be required to accrue and pay US taxes to repatriate these funds. Our intent is to permanently reinvest these funds outside of the US, with the possible exception of funds that have been previously subject to US federal and state taxation. Our current plans do not demonstrate a need to repatriate cash held by our foreign subsidiaries in a taxable transaction to fund our US operations.
•
Net Cash Provided by Operating Activities
Cash flow provided by operations increased $83 million for the three months ended March 31, 2012 as compared to the same period in 2011, with cash inflows increasing from $132 million to $215 million. Cash flow provided by operations was positively impacted by the increase in earnings from continuing operations, an increase in dividends received from investments in affiliates and by changes in trade working capital. Trade working capital was primarily impacted by an increase in trade payables, partially offset by increases in trade receivables and inventories. Trade receivables increased primarily due to increases in net sales resulting from higher volumes. Inventories increased primarily due to higher raw material prices, increases in production and inventory build-up for upcoming turnarounds. Trade payables increased primarily due to increases in volume and prices of raw material purchases. The increase in cash provided by operations was also impacted by higher pension contributions made during the three months ended March 31, 2012 as compared to the same period in 2011. Pension contributions were $67 million during the three months ended March 31, 2012 compared to $20 million for the same period in 2011.
•
Net Cash Used in Investing Activities
Net cash used in investing activities increased $4 million for the three months ended March 31, 2012 as compared to the same period in 2011, with cash outflows increasing from $151 million to $155 million. During the three months ended March 31, 2012, capital expenditures relating to the expansion of our POM production facility in Frankfurt Hoechst Industrial Park, Germany amounted to $21 million, $33 million less than in the same period in 2011. These decreases to cash used were offset by an increase in capital expenditures related to property, plant and equipment.
Our cash outflows for capital expenditures were $106 million and $77 million for the three months ended March 31, 2012 and 2011, respectively, $29 million higher than in 2011. The increase in capital expenditures was primarily related to major replacements of equipment, capacity expansions, major investments to reduce future operating costs and environmental and health and safety initiatives. Acquisitions, net of cash acquired, increased by $15 million, partially offset by the decrease in other investing activities.
•
Net Cash Used in Financing Activities
Net cash used in financing activities increased $10 million for the three months ended March 31, 2012 from a cash outflow of $11 million to a cash outflow of $21 million. The increase in cash used in financing activities is primarily related to higher net borrowings and higher stock repurchase transactions when compared to the same period in 2011.
Debt and Other Obligations
•
Senior Notes
In September 2010, Celanese US completed the private placement of $600 million in aggregate principal amount of 6.625% senior unsecured notes due 2018 (the “6.625% Notes”) under an indenture dated September 24, 2010 (the “Indenture”) among Celanese US, Celanese, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee. In April 2011, Celanese US registered the 6.625% Notes under the Securities Act of 1933, as amended (the "Securities Act"). Celanese US pays interest on the 6.625% Notes on April 15 and October 15 of each year which commenced on April 15, 2011. The 6.625% Notes are redeemable, in whole or in part, at any time on or after October 15, 2014 at the redemption prices specified in the Indenture. Prior to October 15, 2014, Celanese US may redeem some or all of the 6.625% Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium

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as specified in the Indenture. The 6.625% Notes are senior unsecured obligations of Celanese US and rank equally in right of payment with all other unsubordinated indebtedness of Celanese US. The 6.625% Notes are guaranteed on a senior unsecured basis by Celanese and each of the domestic subsidiaries of Celanese US that guarantee its obligations under its senior secured credit facilities (the “Subsidiary Guarantors”).
The Indenture contains covenants, including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends or make other restricted payments; engage in transactions with affiliates; or engage in other businesses.
Additionally, in May 2011, Celanese US completed an offering of $400 million in aggregate principal amount of 5.875% senior unsecured notes due 2021 (the “5.875% Notes”) in a public offering registered under the Securities Act. The 5.875% Notes are guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors.
The 5.875% Notes were issued under an indenture and a first supplemental indenture, each dated May 6, 2011 (the “First Supplemental Indenture”) among Celanese US, Celanese, the Subsidiary Guarantors and Wells Fargo Bank, National Association, as trustee. Celanese US pays interest on the 5.875% Notes on June 15 and December 15 of each year which commenced on December 15, 2011. Prior to June 15, 2021, Celanese US may redeem some or all of the 5.875% Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as specified in the First Supplemental Indenture. The 5.875% Notes are senior unsecured obligations of Celanese US and rank equally in right of payment with all other unsubordinated indebtedness of Celanese US.
The First Supplemental Indenture contains covenants, including, but not limited to, restrictions on our ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends or make other restricted payments; engage in transactions with affiliates; or engage in other businesses.
•
Senior Credit Facilities
In September 2010, we entered into an amendment agreement with the lenders under our existing senior secured credit facilities in order to amend and restate the corresponding credit agreement, dated as of April 2, 2007 (as previously amended, the “Existing Credit Agreement”, and as amended and restated by the amendment agreement, the “Amended Credit Agreement”). Our Amended Credit Agreement consists of the Term C loan facility due 2016, the Term B loan facility due 2014, a $600 million revolving credit facility terminating in 2015 and a $228 million credit-linked revolving facility terminating in 2014.
In May 2011, Celanese US, through its subsidiaries, prepaid the outstanding Term B loan facility under the Amended Credit Agreement set to mature in 2014 in an aggregate principal amount of $516 million using proceeds from the 5.875% Notes and cash on hand. The prepaid principal amount was comprised of $414 million of US dollar-denominated Term B loan facility and €69 million of Euro-denominated Term B loan facility.
The balances available for borrowing under the revolving credit facility and the credit-linked revolving facility are as follows:
 
As of
 
March 31, 2012
 
(unaudited)
 
(In $ millions)
Revolving credit facility
 

Borrowings outstanding
—

Letters of credit issued
—

Available for borrowing
600

Credit-linked revolving facility
 

Letters of credit issued
74

Available for borrowing
154

As a condition to borrowing funds or requesting that letters of credit be issued under the revolving credit facility, our first lien senior secured leverage ratio (as calculated as of the last day of the most recent fiscal quarter for which financial statements have been delivered under the revolving facility) cannot exceed the threshold as specified below. Further, our first lien senior secured leverage ratio must be maintained at or below that threshold while any amounts are outstanding under the revolving credit facility.

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Our amended first lien senior secured leverage ratios and the borrowing capacity under the revolving credit facility are as follows:
 
As of March 31, 2012
 
 
Maximum
Estimate
Estimate, If Fully Drawn
 Borrowing Capacity
 
(unaudited)
 
 
 
 
(In $ millions)
First Lien Senior Secured Leverage Ratios
3.90 to 1.00
1.07 to 1.00
1.52 to 1.00
600

The Amended Credit Agreement contains covenants including, but not limited to, restrictions on our ability to incur indebtedness; grant liens on assets; merge, consolidate, or sell assets; pay dividends or make other restricted payments; make investments; prepay or modify certain indebtedness; engage in transactions with affiliates; enter into sale-leaseback transactions or hedge transactions; or engage in other businesses; as well as a covenant requiring maintenance of a maximum first lien senior secured leverage ratio.
We are in compliance with all of the covenants related to our debt agreements as of March 31, 2012.
Share Capital
Our Board of Directors follows a policy of declaring, subject to legally available funds, a quarterly cash dividend on each share of our Series A Common Stock, par value $0.0001 per share ("Common Stock") unless the Company's Board of Directors, in its sole discretion, determines otherwise. The amount available to pay cash dividends is restricted by the Company's Amended Credit Agreement, the 6.625% Notes and the 5.875% Notes.
In April 2011, we announced that our Board of Directors approved a 20% increase in the Celanese quarterly Common Stock cash dividend. The Board of Directors increased the quarterly dividend rate from $0.05 to $0.06 per share of Common Stock on a quarterly basis and $0.20 to $0.24 per share of Common Stock on an annual basis. The new dividend rate is applicable to dividends payable beginning in August 2011.
On April 5, 2012, we declared a cash dividend of $0.06 per share on our Common Stock amounting to $9 million. The cash dividends are for the period from February 1, 2012 to April 30, 2012 and will be paid on May 1, 2012 to holders of record as of April 17, 2012.
On April 23, 2012, we announced that our Board of Directors approved a 25% increase in our quarterly Common Stock cash dividend. The Board of Directors increased the quarterly dividend rate from $0.06 to $0.075 per share of Common Stock on a quarterly basis and $0.24 to $0.30 per share of Common Stock on an annual basis. The new dividend rate will be applicable to dividends payable beginning in August 2012.
Our Board of Directors authorized the repurchase of our Common Stock as follows:
Date of Board Authorization
 
As of
 
March 31, 2012
(unaudited)
 
 
 
 
(In $ millions)
February 2008
 
400

October 2008
 
100

April 2011
 
129

Total
 
629

These authorizations give management discretion in determining the timing and conditions under which shares may be repurchased. This repurchase program does not have an expiration date.

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The share repurchase activity pursuant to this authorization is as follows:
 
Three Months Ended
 
Total From
February 2008 Through
 
March 31,
 
 
2012
 
2011
 
March 31, 2012
 
(unaudited)
Shares repurchased
444,901

 
69,400

 
12,527,709

Average purchase price per share
$
46.34

 
$
43.42

 
$
38.07

Amount spent on repurchased shares (in millions)
$
20

 
$
3

 
$
476

The purchase of treasury stock reduces the number of shares outstanding and the repurchased shares may be used by us for compensation programs utilizing our stock and other corporate purposes. We account for treasury stock using the cost method and include treasury stock as a component of stockholders’ equity.
Contractual Obligations
Except as otherwise described in this report, there have been no material revisions outside the ordinary course of business to our contractual obligations as described in our 2011 Form 10-K.
Off-Balance Sheet Arrangements
We have not entered into any material off-balance sheet arrangements.
Critical Accounting Policies and Estimates
Our unaudited interim consolidated financial statements are based on the selection and application of significant accounting policies. The preparation of unaudited interim consolidated financial statements in conformity with US Generally Accepted Accounting Principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of revenues, expenses and allocated charges during the reporting period. Actual results could differ from those estimates. However, we are not currently aware of any reasonably likely events or circumstances that would result in materially different results.
We describe our significant accounting policies in Note 2, Summary of Accounting Policies, of the Notes to Consolidated Financial Statements included in our 2011 Form 10-K. We discuss our critical accounting policies and estimates in MD&A in our 2011 Form 10-K.
There have been no material revisions to the critical accounting policies as filed in our 2011 Form 10-K.
Recent Accounting Pronouncements
See Note 2 to the accompanying unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk for our Company has not changed materially from the foreign exchange, interest rate and commodity risks disclosed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk in our 2011 Form 10-K. See also Note 15 to the accompanying unaudited interim consolidated financial statements for further discussion of our market risk management and the related impact on our financial position and results of operations.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, as of March 31, 2012, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.

54


Changes in Internal Control Over Financial Reporting
During the period covered by this report, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

55



PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are involved in a number of legal and regulatory proceedings, lawsuits and claims incidental to the normal conduct of our business, relating to such matters as product liability, land disputes, contracts, antitrust, intellectual property, workers' compensation, chemical exposure, asbestos exposure, prior acquisitions and divestitures, past waste disposal practices and release of chemicals into the environment. The Company is actively defending those matters where it is named as a defendant. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, the Company's litigation accruals and estimates of possible loss or range of possible loss may not represent the ultimate loss to the Company from legal proceedings. See Note 11 and Note 17 in the accompanying unaudited interim consolidated financial statements for a discussion of material environmental matters and commitments and contingencies related to legal and regulatory proceedings. There have been no significant developments in the “Legal Proceedings” described in our 2011 Form 10-K other than those disclosed in Notes 11 and 17 in the accompanying unaudited interim consolidated financial statements.
Item 1A. Risk Factors
There have been no material changes to the risk factors under Part I, Item 1A of our 2011 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The table below sets forth information regarding repurchases of our Common Stock during the three months ended March 31, 2012:
Period
 
Total Number
of Shares Purchased
 
Average
Price Paid per Share
 
Total Number of
Shares Purchased as
Part of Publicly Announced Program
 
Approximate Dollar
Value of Shares
Remaining that may be
Purchased Under the Program(2)
(unaudited)
January 1-31, 2012
 
391

(1) 
$
48.13

 
—

 
$
172,400,000

February 1-29, 2012
 
207,600

 
$
48.15

 
207,600

 
$
162,400,000

March 1-31, 2012
 
237,301

 
$
44.75

 
237,301

 
$
151,800,000

Total
 
445,292

 
 
 
444,901

 
 
_______________________________________
(1) 
Relates to shares withheld from employees to cover their statutory minimum withholding requirements for personal income taxes related to the vesting of restricted stock units.
(2) 
Our Board of Directors authorized the repurchase of our Common Stock as follows: February 2008, $400 million, October 2008, $100 million and April 2011, $129 million, for a total authorization of $629 million.  These authorizations give management discretion in determining the timing and conditions under which shares may be repurchased, and the program does not have an expiration date.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
Procedures for Stockholder Director Nominations and Communications with the Board
With respect to stockholder director nominations, stockholder proposals for the 2013 Annual Meeting of Stockholders and other correspondence with the Board as outlined in the Company's 2012 Notice of Annual Meeting and Proxy Statement, such correspondence should be sent to the Company's relocated principal executive offices as follows:  Celanese Corporation, Board of Directors, 222 West Las Colinas Blvd., Suite 900N, Irving, Texas 75039, Attn: Corporate Secretary.


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Item 6. Exhibits
Exhibit Number                    Description
3.1
Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed with the SEC on February 11, 2011).
3.2
Third Amended and Restated By-laws, effective as of October 23, 2008 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on October 29, 2008).
10.1*‡
Agreement and Amendment, dated March 27, 2012, with David N. Weidman.
10.2‡
Celanese Corporation 2009 Global Incentive Plan, as Amended and Restated, April 19, 2012 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 23, 2012).
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
XBRL Instance Document.
101.SCH*
XBRL Taxonomy Extension Schema Document.
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document.
*     Filed herewith
‡ Indicates a management contract or compensatory plan or arrangement


57


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 thereunto duly authorized.
CELANESE CORPORATION
 
By: 
 /s/ MARK C. ROHR
Mark C. Rohr
Chairman of the Board of Directors and
Chief Executive Officer
Date: April 24, 2012

 
By: 
 /s/ STEVEN M. STERIN
Steven M. Sterin
Senior Vice President and
Chief Financial Officer
Date: April 24, 2012

58