Celanese Corporation (NYSE: CE), a global technology and specialty
materials company, today reported second quarter 2013 adjusted earnings
per share of $1.12 versus $1.14 in the prior quarter.
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Three Months Ended
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June 30,
2013
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March 31,
2013
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(unaudited)
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(In $ millions, except per share data)
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Net sales
|
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1,653
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|
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1,605
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Operating profit (loss)
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|
|
169
|
|
|
184
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Net earnings (loss)
|
|
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133
|
|
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142
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Adjusted EBIT / Total segment income (1) |
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|
264
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|
269
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Operating EBITDA (1) |
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339
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345
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Diluted EPS - continuing operations
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$
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0.83
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$
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0.88
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Diluted EPS - total
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$
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0.83
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$
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0.89
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Adjusted EPS (2) |
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$
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1.12
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$
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1.14
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______________________________
(1) Non-U.S. GAAP measure. See Table 1 for reconciliation.
(2) Non-U.S. GAAP measure. See Table 3 for reconciliation.
Additional information about our prior period performance is included in
our Quarterly Reports on Form 10-Q and in our Current Year
Reconciliations to Non-GAAP Financial Measures available on our website
at www.celanese.com
in the Investor Relations section.
"Celanese's second quarter results reflect the continued success we are
having by delivering value-added solutions to our customers in diverse
end-use markets and geographic regions as we increased segment income
margins to 22.3 percent sequentially in Advanced Engineered Materials,
Consumer Specialties and Industrial Specialties. This success was
tempered by lower segment income in Acetyl Intermediates as the
economies of Asia and Europe demonstrated softer conditions than the
first quarter and as we executed a number of plant turnarounds," said
Mark Rohr, chairman and chief executive officer. "Celanese continued to
deliver good cash flow results in the second quarter and further
increased the cash on our balance sheet and reduced net debt to the
lowest quarterly level since March 2005. We are well positioned to
pursue our balanced cash deployment strategy."
Recent Highlights
-
Signed an agreement with Mitsui & Co., Ltd., of Tokyo, Japan, to
establish a joint venture for the production of methanol at Celanese's
integrated chemical plant in Clear Lake, Texas. The total investment
in the facility is estimated to be $800 million. Celanese's portion of
the cash investment is estimated to be $300 million, in addition to
previously invested assets at the company's Clear Lake facility. The
planned methanol facility will have an annual capacity of 1.3 million
tons and is expected to begin operations in mid-2015.
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Announced that its board of directors approved a 20 percent increase
in the company's Series A Common Stock quarterly cash dividend. The
quarterly dividend rate increased to $0.09 from $0.075 per share of
Common Stock on a quarterly basis and to $0.36 from $0.30 per share of
Common Stock on an annual basis. The new dividend rate began in May
2013.
Second Quarter Business Segment Overview
Advanced Engineered Materials
Advanced Engineered Materials delivered record quarterly net sales of
$352 million on record quarterly volumes which were 8 percent higher
than the first quarter. Segment income increased to $86 million, or 10
percent higher than the prior quarter, as volumes increased on continued
success in penetrating autos, particularly in the U.S., and due to the
impact of higher value applications on product mix. Segment income
margin increased 70 bps from the prior quarter to 24.4 percent.
Operating profit, which excludes affiliate earnings, increased to $39
million from $36 million in the prior quarter.
Consumer Specialties
Second quarter segment income in Consumer Specialties was $109 million,
consistent with the first quarter of $108 million. Healthy global demand
for acetate tow drove higher sequential volumes and price increases.
Segment income margin decreased 190 bps from the prior quarter primarily
due to higher raw material costs. Operating profit, which excludes China
acetate dividends, increased to $83 million from $78 million in the
prior quarter.
Industrial Specialties
Industrial Specialties' segment income increased to $19 million, or 19
percent higher than the prior quarter, as record results in Emulsions
more than offset continued weak global demand for EVA applications.
Volumes increased 2 percent as higher volumes in Emulsions in Europe and
Asia more than offset lower global demand for EVA applications. Pricing
increased 1 percent sequentially on improved regional mix in EVA and
higher Emulsions pricing in Europe and North America. Segment income
margin increased 80 bps from the prior quarter to 6.4 percent. Operating
profit was $18 million in the second quarter compared with $15 million
in the prior quarter.
Acetyl Intermediates
Second quarter segment income in Acetyl Intermediates was $66 million
compared to $79 million in the first quarter on flat volumes and pricing
reflecting continued weak global demand for acetyl derivative products
in Europe and Asia. Additionally, company and customer turnarounds in
vinyl acetate monomer (VAM) and a raw material supply issue at one of
the company's facilities also impacted segment income. Segment income
margin decreased 160 bps from the prior quarter to 8.2 percent due to
the turnarounds and the supply issue. Operating profit was $55 million
in the second quarter compared with $75 million in the prior quarter.
Capital Structure
During the second quarter of 2013, the company generated $229 million of
operating cash flow driven by continued strong cash generation and lower
trade working capital usage as compared to the prior quarter. Adjusted
free cash flow for the quarter was $154 million.
As of June 30, 2013, the company's net debt was $1.977 billion, a $162
million decrease from December 31, 2012 and the lowest quarterly level
for the company since March 31, 2005.
During the quarter, the company spent $6 million on share repurchases
and expects to continue repurchasing shares. As of June 30, 2013, the
company had a remaining share repurchase authorization of $386 million.
Additionally, the company's strong cash flow allows it to continue to
delever the balance sheet and increase its dividends.
Strategic Affiliates
Earnings from equity investments were $55 million, similar to the prior
quarter. Cash dividends received in the second quarter from equity
investments were $45 million, similar to the prior quarter.
During the second quarter of 2013, the company received a quarterly
dividend of $23 million from its China acetate ventures, $1 million
lower than the prior quarter. In 2013, the company began receiving
quarterly dividends from its China acetate ventures. In prior years,
dividends from China acetate ventures were received annually in the
second quarter. In the second quarter of 2012, the company received an
annual dividend of $83 million. During the first six months of 2013, the
company received two quarterly dividends totaling $47 million.
Taxes
The tax rate for adjusted earnings per share was 19 percent in the
second quarter of 2013, consistent with the prior quarter. The effective
tax rate for GAAP for the second quarter of 2013 was 36 percent compared
to 35 percent in the first quarter.
Net cash taxes paid in the second quarter of 2013 were $30 million
compared with $14 million in the first quarter primarily due to the
timing of tax refunds received.
Outlook
"As we look to the remainder of 2013, we expect the weak economic
conditions that exist today will continue. Our global teams continue to
focus on Celanese-specific innovation and productivity initiatives that
will allow us to achieve our earnings growth objective of approximately
12 percent growth. However, further deterioration of global demand would
pressure this objective," said Rohr.
The company's earnings presentation and prepared remarks related to the
second quarter results will be posted on its website at www.celanese.com
in the investor section after market close on July 18.
Celanese Corporation is a global technology leader in the production
of differentiated chemistry solutions and specialty materials used in
most major industries and consumer applications. With sales almost
equally divided between North America, Europe and Asia, the company uses
the full breadth of its global chemistry, technology and business
expertise to create value for customers and the corporation. Celanese
partners with customers to solve their most critical needs while making
a positive impact on its communities and the world. Based in Dallas,
Texas, Celanese employs approximately 7,600 employees worldwide
and had 2012 net sales of $6.4 billion. For more information about
Celanese Corporation and its product offerings, visit www.celanese.com
or our blog at www.celaneseblog.com.
Forward-Looking Statements
This release may contain “forward-looking statements,” which include
information concerning the company's plans, objectives, goals,
strategies, future revenues or performance, capital expenditures,
financing needs and other information that is not historical
information. All forward-looking statements are based upon current
expectations and beliefs and various assumptions. There can be no
assurance that the company will realize these expectations or that these
beliefs will prove correct. There are a number of risks and
uncertainties that could cause actual results to differ materially from
the results expressed or implied in the forward-looking statements
contained in this release. These risks and uncertainties include, among
other things: changes in general economic, business, political and
regulatory conditions in the countries or regions in which we operate;
the length and depth of product and industry business cycles,
particularly in the automotive, electrical, 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 improve productivity by implementing technological improvements to
existing plants; increased price competition and the introduction
of competing products by other companies; market acceptance of our
technology; the ability to obtain governmental approvals and to
construct facilities on terms and schedules acceptable to the company;
changes in the degree of intellectual property and other legal
protection afforded to our products or technology, or the theft of such
intellectual property; compliance and other 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 or operation of facilities,
including as a result of geopolitical conditions, including the
occurrence of acts of war or terrorist incidents or as a result of
weather or natural disasters; 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 discussed from time to
time in the company's filings with the Securities and Exchange
Commission. Any forward-looking statement speaks only as of the date on
which it is made, and the company undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after the
date on which it is made or to reflect the occurrence of anticipated or
unanticipated events or circumstances.
Reconciliation of Non-US GAAP Measures to US GAAP
This release provides information about the following non-US GAAP
measures: adjusted EBIT, operating EBITDA, adjusted earnings per share,
adjusted free cash flow and net debt as non-US GAAP measures. These
measurements are not recognized in accordance with US GAAP and should
not be viewed as an alternative to US GAAP measures of performance. The
most directly comparable financial measure presented in accordance with
US GAAP in our consolidated financial statements for adjusted EBIT and
operating EBITDA is net earnings (loss); for adjusted earnings per share
is earnings (loss) from continuing operations per common share-diluted;
for adjusted free cash flow is cash flow from operations; and for net
debt is total debt.
Use of Non-US GAAP Financial Information
-
Adjusted EBIT is defined by the Company as net earnings (loss) less
interest income plus loss (earnings) from discontinued operations,
interest expense and taxes, and further adjusted for other charges and
other adjustments. We believe that adjusted EBIT provides transparent
and useful information to management, investors and analysts in
evaluating and assessing our core operating results from
period-to-period after removing the impact of unusual, non-operational
or restructuring-related activities that affect comparability. Our
management recognizes that adjusted EBIT has inherent limitations
because of the excluded items. Adjusted EBIT is one of the measures
management uses for planning and budgeting, monitoring and evaluating
financial and operating results and as a performance metric in the
Company's incentive compensation plan. We may provide guidance on
adjusted EBIT but are unable to reconcile forecasted adjusted EBIT to
a GAAP financial measure without unreasonable effort because a
forecast of other charges and other adjustments is not practical.
Adjusted EBIT by business segment may also be referred to by
management as segment income.
-
Operating EBITDA is defined by the Company as net earnings (loss)
less interest income plus loss (earnings) from discontinued
operations, interest expense, taxes and depreciation and amortization,
and further adjusted for other charges and other adjustments.
Operating EBITDA is equal to adjusted EBIT plus depreciation and
amortization, and has the same uses and limitations as adjusted EBIT
described above.
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Adjusted earnings per share is defined by the Company as earnings
(loss) from continuing operations, adjusted for income tax (provision)
benefit, other charges and other adjustments, refinancing and related
expenses and noncontrolling interests, divided by the number of basic
common shares, convertible preferred shares and dilutive restricted
stock units and stock options calculated using the treasury method. We
believe that adjusted earnings per share provides transparent and
useful information to management, investors and analysts in evaluating
and assessing our core operating results from period-to-period after
removing the impact of unusual, non-operational or
restructuring-related activities that affect comparability. We may
provide guidance on adjusted earnings per share but are unable to
reconcile forecasted adjusted earnings per share to a GAAP financial
measure without unreasonable effort because a forecast of other
charges and other adjustments is not practical.
Note: The income tax rate used for adjusted earnings per share
approximates the midpoint in a range of forecasted tax rates for the
year. This range may include certain partial or full-year forecasted tax
opportunities, where applicable, and specifically excludes changes in
uncertain tax positions, discrete items and other material items
adjusted out of our GAAP earnings for adjusted earnings per share
purposes, and changes in management's assessments regarding the ability
to realize deferred tax assets. We also reflect the impact of foreign
tax credits when utilized for the adjusted earnings per share tax rate.
We analyze this rate quarterly and adjust if there is a material change
in the range of forecasted tax rates; an updated forecast would not
necessarily result in a change to our tax rate used for adjusted
earnings per share. The adjusted tax rate is an estimate and may differ
from the actual tax rate used for GAAP reporting in any given reporting
period. It is not practical to reconcile our prospective adjusted tax
rate to the actual GAAP tax rate in any given future period.
-
Adjusted free cash flow is defined by the Company as cash flow from
operations less other productive asset purchases, operating cash flow
from discontinued operations and certain cash flow adjustments. We
believe that adjusted free cash flow provides useful information to
management, investors and analysts in evaluating the Company’s
liquidity and credit quality assessment. Although we use adjusted free
cash flow as a financial measure to assess the performance of our
business, the use of adjusted free cash flow has important
limitations, including that adjusted free cash flow does not reflect
the cash requirements necessary to service our indebtedness, lease
obligations, unconditional purchase obligations or pension and
postretirement funding obligations.
-
Net debt is defined by the Company as total debt less cash and cash
equivalents. We believe that net debt provides useful information to
management, investors and analysts in evaluating changes to the
Company's capital structure and credit quality assessment.
Results Unaudited
The results in this document, together with the adjustments made to
present the results on a comparable basis, have not been audited and are
based on internal financial data furnished to management. Quarterly
results should not be taken as an indication of the results of
operations to be reported for any subsequent period or for the full
fiscal year.
Change in accounting policy regarding pension and other
postretirement benefits
Effective January 1, 2013, we elected to change our policy for
recognizing actuarial gains and losses and the change in fair value of
plan assets for our defined benefit pension plans and other
postretirement benefit plans. We now immediately recognize the change in
fair value of plan assets and net actuarial gains and losses annually in
the fourth quarter of each fiscal year and whenever a plan is required
to be remeasured. The remaining components of our net periodic benefit
cost are recorded on a quarterly basis.
In connection with the change in accounting policy for pension and
other postretirement benefits and to properly match the actual
operational expenses each business segment is incurring, we changed our
allocation of net periodic benefit cost. We now allocate only the
service cost and amortization of prior service cost components of our
pension and postretirement plans to each business segment on a ratable
basis. All other components of net periodic benefit cost (interest cost,
expected return on assets and net actuarial gains and losses) are
recorded to Other Activities as these components are considered
financing activities managed at the corporate level. Financial
information for prior periods has been retrospectively adjusted and can
be identified by the heading "As Adjusted."
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Consolidated Statements of Operations - Unaudited
|
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|
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|
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Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
June 30,
2012
|
|
|
|
|
|
|
|
As Adjusted
|
|
|
|
(In $ millions, except share and per share data)
|
|
Net sales
|
|
1,653
|
|
|
1,605
|
|
|
1,675
|
|
|
Cost of sales
|
|
(1,334
|
)
|
|
(1,272
|
)
|
|
(1,340
|
)
|
|
Gross profit
|
|
319
|
|
|
333
|
|
|
335
|
|
|
Selling, general and administrative expenses
|
|
(113
|
)
|
|
(106
|
)
|
|
(115
|
)
|
|
Amortization of intangible assets
|
|
(9
|
)
|
|
(11
|
)
|
|
(13
|
)
|
|
Research and development expenses
|
|
(23
|
)
|
|
(26
|
)
|
|
(25
|
)
|
|
Other (charges) gains, net
|
|
(3
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
Foreign exchange gain (loss), net
|
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
Gain (loss) on disposition of businesses and asset, net
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
Operating profit (loss)
|
|
169
|
|
|
184
|
|
|
178
|
|
|
Equity in net earnings (loss) of affiliates
|
|
55
|
|
|
54
|
|
|
62
|
|
|
Interest expense
|
|
(44
|
)
|
|
(43
|
)
|
|
(45
|
)
|
|
Refinancing expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest income
|
|
1
|
|
|
—
|
|
|
—
|
|
|
Dividend income - cost investments
|
|
23
|
|
|
24
|
|
|
84
|
|
|
Other income (expense), net
|
|
4
|
|
|
(1
|
)
|
|
(1
|
)
|
|
Earnings (loss) from continuing operations before tax
|
|
208
|
|
|
218
|
|
|
278
|
|
|
Income tax (provision) benefit
|
|
(75
|
)
|
|
(77
|
)
|
|
(57
|
)
|
|
Earnings (loss) from continuing operations
|
|
133
|
|
|
141
|
|
|
221
|
|
|
Earnings (loss) from operation of discontinued operations
|
|
—
|
|
|
2
|
|
|
—
|
|
|
Gain (loss) on disposition of discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax (provision) benefit from discontinued operations
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
Earnings (loss) from discontinued operations
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Net earnings (loss)
|
|
133
|
|
|
142
|
|
|
221
|
|
|
Net (earnings) loss attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Net earnings (loss) attributable to Celanese Corporation
|
|
133
|
|
|
142
|
|
|
221
|
|
|
Amounts attributable to Celanese Corporation
|
|
|
|
|
|
|
|
Earnings (loss) per common share - basic
|
|
|
|
|
|
|
|
Continuing operations
|
|
0.83
|
|
|
0.88
|
|
|
1.40
|
|
|
Discontinued operations
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Net earnings (loss) - basic
|
|
0.83
|
|
|
0.89
|
|
|
1.40
|
|
|
Earnings (loss) per common share - diluted
|
|
|
|
|
|
|
|
Continuing operations
|
|
0.83
|
|
|
0.88
|
|
|
1.38
|
|
|
Discontinued operations
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
Net earnings (loss) - diluted
|
|
0.83
|
|
|
0.89
|
|
|
1.38
|
|
|
Weighted average shares (in millions)
|
|
|
|
|
|
|
|
Basic
|
|
159.7
|
|
|
159.7
|
|
|
158.2
|
|
|
Diluted
|
|
160.1
|
|
|
160.2
|
|
|
159.8
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets - Unaudited
|
|
|
|
|
|
|
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
|
|
|
|
|
As Adjusted
|
|
|
|
(In $ millions)
|
|
ASSETS
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
1,107
|
|
|
959
|
|
|
Trade receivables - third party and affiliates, net
|
|
929
|
|
|
827
|
|
|
Non-trade receivables, net
|
|
280
|
|
|
209
|
|
|
Inventories
|
|
738
|
|
|
711
|
|
|
Deferred income taxes
|
|
50
|
|
|
49
|
|
|
Marketable securities, at fair value
|
|
45
|
|
|
53
|
|
|
Other assets
|
|
31
|
|
|
31
|
|
|
Total current assets
|
|
3,180
|
|
|
2,839
|
|
|
Investments in affiliates
|
|
808
|
|
|
800
|
|
|
Property, plant and equipment, net
|
|
3,325
|
|
|
3,350
|
|
|
Deferred income taxes
|
|
602
|
|
|
606
|
|
|
Other assets
|
|
483
|
|
|
463
|
|
|
Goodwill
|
|
772
|
|
|
777
|
|
|
Intangible assets, net
|
|
152
|
|
|
165
|
|
|
Total assets
|
|
9,322
|
|
|
9,000
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Short-term borrowings and current installments of long-term debt -
third party and affiliates
|
|
224
|
|
|
168
|
|
|
Trade payables - third party and affiliates
|
|
716
|
|
|
649
|
|
|
Other liabilities
|
|
439
|
|
|
475
|
|
|
Deferred income taxes
|
|
25
|
|
|
25
|
|
|
Income taxes payable
|
|
140
|
|
|
38
|
|
|
Total current liabilities
|
|
1,544
|
|
|
1,355
|
|
|
Long-term debt
|
|
2,860
|
|
|
2,930
|
|
|
Deferred income taxes
|
|
47
|
|
|
50
|
|
|
Uncertain tax positions
|
|
184
|
|
|
181
|
|
|
Benefit obligations
|
|
1,560
|
|
|
1,602
|
|
|
Other liabilities
|
|
1,142
|
|
|
1,152
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
Preferred stock
|
|
—
|
|
|
—
|
|
|
Common stock
|
|
—
|
|
|
—
|
|
|
Treasury stock, at cost
|
|
(911
|
)
|
|
(905
|
)
|
|
Additional paid-in capital
|
|
745
|
|
|
731
|
|
|
Retained earnings
|
|
2,242
|
|
|
1,993
|
|
|
Accumulated other comprehensive income (loss), net
|
|
(91
|
)
|
|
(89
|
)
|
|
Total Celanese Corporation stockholders' equity
|
|
1,985
|
|
|
1,730
|
|
|
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
Total equity
|
|
1,985
|
|
|
1,730
|
|
|
Total liabilities and equity
|
|
9,322
|
|
|
9,000
|
|
|
|
|
|
|
Table 1
|
|
Reconciliation of Consolidated Net Earnings (Loss) to Adjusted
EBIT and Operating EBITDA - Non-GAAP Measures -
|
|
Unaudited
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
|
(In $ millions)
|
|
Net earnings (loss)
|
|
133
|
|
|
142
|
|
|
(Earnings) loss from discontinued operations
|
|
—
|
|
|
(1
|
)
|
|
Interest income
|
|
(1
|
)
|
|
—
|
|
|
Interest expense
|
|
44
|
|
|
43
|
|
|
Refinancing expense
|
|
—
|
|
|
—
|
|
|
Income tax provision (benefit)
|
|
75
|
|
|
77
|
|
|
Other charges (gains), net (1) |
|
3
|
|
|
4
|
|
|
Other adjustments (1) |
|
10
|
|
|
4
|
|
|
Adjusted EBIT
|
|
264
|
|
|
269
|
|
|
Depreciation and amortization expense (2) |
|
75
|
|
|
76
|
|
|
Operating EBITDA
|
|
339
|
|
|
345
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
|
(In $ millions)
|
|
Advanced Engineered Materials
|
|
—
|
|
|
—
|
|
|
Consumer Specialties
|
|
—
|
|
|
—
|
|
|
Industrial Specialties
|
|
—
|
|
|
—
|
|
|
Acetyl Intermediates
|
|
—
|
|
|
—
|
|
|
Other Activities (3) |
|
—
|
|
|
—
|
|
|
Accelerated depreciation and amortization expense
|
|
—
|
|
|
—
|
|
|
Depreciation and amortization expense (2) |
|
75
|
|
|
76
|
|
|
Total depreciation and amortization expense
|
|
75
|
|
|
76
|
|
______________________________
(1) See Table 8 for details.
(2) Excludes accelerated depreciation and amortization expense as
detailed in the table above and included in Other adjustments above.
(3) Other Activities includes corporate Selling, general and
administrative expenses, the results of captive insurance companies and
certain components of net periodic benefit cost, including interest
cost, expected return on assets and net actuarial gains and losses.
|
|
|
|
|
Table 2
|
|
Segment Data and Reconciliation of Operating Profit (Loss) to
Adjusted EBIT and Operating EBITDA - Non-GAAP
|
|
Measures - Unaudited
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
|
(In $ millions, except percentages)
|
|
Operating Profit (Loss) / Operating Margin (1) |
|
|
|
|
|
|
|
|
|
Advanced Engineered Materials
|
|
39
|
|
|
11.1
|
%
|
|
36
|
|
|
10.9
|
%
|
|
Consumer Specialties
|
|
83
|
|
|
26.4
|
%
|
|
78
|
|
|
26.4
|
%
|
|
Industrial Specialties
|
|
18
|
|
|
6.1
|
%
|
|
15
|
|
|
5.2
|
%
|
|
Acetyl Intermediates
|
|
55
|
|
|
6.8
|
%
|
|
75
|
|
|
9.3
|
%
|
|
Other Activities (2) |
|
(26
|
)
|
|
|
|
(20
|
)
|
|
|
|
Total
|
|
169
|
|
|
10.2
|
%
|
|
184
|
|
|
11.5
|
%
|
|
Equity Earnings, Cost - Dividend Income and Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
Advanced Engineered Materials
|
|
45
|
|
|
|
|
40
|
|
|
|
|
Consumer Specialties
|
|
24
|
|
|
|
|
26
|
|
|
|
|
Industrial Specialties
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Acetyl Intermediates
|
|
3
|
|
|
|
|
3
|
|
|
|
|
Other Activities (2) |
|
10
|
|
|
|
|
8
|
|
|
|
|
Total
|
|
82
|
|
|
|
|
77
|
|
|
|
|
Other Charges and Other Adjustments (3) |
|
|
|
|
|
|
|
|
|
Advanced Engineered Materials
|
|
2
|
|
|
|
|
2
|
|
|
|
|
Consumer Specialties
|
|
2
|
|
|
|
|
4
|
|
|
|
|
Industrial Specialties
|
|
1
|
|
|
|
|
1
|
|
|
|
|
Acetyl Intermediates
|
|
8
|
|
|
|
|
1
|
|
|
|
|
Other Activities (2) |
|
—
|
|
|
|
|
—
|
|
|
|
|
Total
|
|
13
|
|
|
|
|
8
|
|
|
|
|
Adjusted EBIT / Adjusted EBIT Margin (1) |
|
|
|
|
|
|
|
|
|
Advanced Engineered Materials
|
|
86
|
|
|
24.4
|
%
|
|
78
|
|
|
23.7
|
%
|
|
Consumer Specialties
|
|
109
|
|
|
34.7
|
%
|
|
108
|
|
|
36.6
|
%
|
|
Industrial Specialties
|
|
19
|
|
|
6.4
|
%
|
|
16
|
|
|
5.6
|
%
|
|
Acetyl Intermediates
|
|
66
|
|
|
8.2
|
%
|
|
79
|
|
|
9.8
|
%
|
|
Other Activities (2) |
|
(16
|
)
|
|
|
|
(12
|
)
|
|
|
|
Total
|
|
264
|
|
|
16.0
|
%
|
|
269
|
|
|
16.8
|
%
|
|
Depreciation and Amortization Expense (4) |
|
|
|
|
|
|
|
|
|
Advanced Engineered Materials
|
|
27
|
|
|
|
|
29
|
|
|
|
|
Consumer Specialties
|
|
10
|
|
|
|
|
10
|
|
|
|
|
Industrial Specialties
|
|
12
|
|
|
|
|
12
|
|
|
|
|
Acetyl Intermediates
|
|
22
|
|
|
|
|
21
|
|
|
|
|
Other Activities (2) |
|
4
|
|
|
|
|
4
|
|
|
|
|
Total
|
|
75
|
|
|
|
|
76
|
|
|
|
|
Operating EBITDA
|
|
|
|
|
|
|
|
|
|
Advanced Engineered Materials
|
|
113
|
|
|
|
|
107
|
|
|
|
|
Consumer Specialties
|
|
119
|
|
|
|
|
118
|
|
|
|
|
Industrial Specialties
|
|
31
|
|
|
|
|
28
|
|
|
|
|
Acetyl Intermediates
|
|
88
|
|
|
|
|
100
|
|
|
|
|
Other Activities (2) |
|
(12
|
)
|
|
|
|
(8
|
)
|
|
|
|
Total
|
|
339
|
|
|
|
|
345
|
|
|
|
______________________________
(1) Defined as Operating profit (loss) and Adjusted EBIT, respectively,
divided by Net sales. See Table 4 for Net sales.
(2) Other Activities includes corporate Selling, general and
administrative expenses, the results of captive insurance companies and
certain components of net periodic benefit cost, including interest
cost, expected return on assets and net actuarial gains and losses.
(3) See Table 8 for details.
(4) Excludes accelerated depreciation and amortization expense. See
Table 1 for details.
|
|
|
|
|
|
|
|
Table 3
|
|
Adjusted Earnings (Loss) Per Share - Reconciliation of a Non-GAAP
Measure - Unaudited
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
2013
|
|
|
March 31,
2013
|
|
|
June 30,
2013
|
|
|
|
|
|
per
share
|
|
|
|
per
share
|
|
|
|
per
share
|
|
|
|
(In $ millions, except per share data)
|
|
Earnings (loss) from continuing operations
|
|
133
|
|
|
0.83
|
|
|
141
|
|
|
0.88
|
|
|
274
|
|
|
1.71
|
|
Deduct: Income tax (provision) benefit
|
|
(75
|
)
|
|
|
|
(77
|
)
|
|
|
|
(152
|
)
|
|
|
|
Earnings (loss) from continuing operations before tax
|
|
208
|
|
|
|
|
218
|
|
|
|
|
426
|
|
|
|
|
Other charges and other adjustments (1) |
|
13
|
|
|
|
|
8
|
|
|
|
|
21
|
|
|
|
|
Refinancing expense
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Adjusted earnings (loss) from continuing operations before tax
|
|
221
|
|
|
|
|
226
|
|
|
|
|
447
|
|
|
|
|
Income tax (provision) benefit on adjusted earnings (2) |
|
(42
|
)
|
|
|
|
(43
|
)
|
|
|
|
(85
|
)
|
|
|
|
Noncontrolling interests
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Adjusted earnings (loss) from continuing operations
|
|
179
|
|
|
1.12
|
|
|
183
|
|
|
1.14
|
|
|
362
|
|
|
2.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares (in millions)(3)
|
|
Weighted average shares outstanding
|
|
159.7
|
|
|
|
|
159.7
|
|
|
|
|
159.7
|
|
|
|
|
Dilutive stock options
|
|
0.2
|
|
|
|
|
0.2
|
|
|
|
|
0.2
|
|
|
|
|
Dilutive restricted stock units
|
|
0.2
|
|
|
|
|
0.3
|
|
|
|
|
0.2
|
|
|
|
|
Total diluted shares
|
|
160.1
|
|
|
|
|
160.2
|
|
|
|
|
160.1
|
|
|
|
______________________________
(1) See Table 8 for details.
(2) The adjusted effective tax rate is 19% for the three and six months
ended June 30, 2013 and three months ended March 31, 2013.
(3) Potentially dilutive shares are included in the adjusted earnings
per share calculation when adjusted earnings are positive.
|
|
|
|
|
Table 4
|
|
Factors Affecting Increase (Decrease) in Segment Net Sales -
Unaudited
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
|
(In $ millions)
|
|
Net Sales
|
|
|
|
|
|
Advanced Engineered Materials
|
|
352
|
|
|
329
|
|
|
Consumer Specialties
|
|
314
|
|
|
295
|
|
|
Industrial Specialties
|
|
295
|
|
|
288
|
|
|
Acetyl Intermediates
|
|
809
|
|
|
808
|
|
|
Other Activities (1) |
|
—
|
|
|
—
|
|
|
Intersegment eliminations
|
|
(117
|
)
|
|
(115
|
)
|
|
Total
|
|
1,653
|
|
|
1,605
|
|
______________________________
(1) Other Activities includes corporate Selling, general and
administrative expenses, the results of captive insurance companies and
certain components of net periodic benefit cost, including interest
cost, expected return on assets and net actuarial gains and losses.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2013 Compared to Three Months Ended
March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
Price
|
|
Currency
|
|
Other
|
|
Total
|
|
|
|
(In percentages)
|
|
Advanced Engineered Materials
|
|
8
|
|
(1
|
)
|
|
—
|
|
—
|
|
7
|
|
Consumer Specialties
|
|
6
|
|
1
|
|
|
—
|
|
—
|
|
7
|
|
Industrial Specialties
|
|
2
|
|
1
|
|
|
—
|
|
—
|
|
3
|
|
Acetyl Intermediates
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Total Company
|
|
3
|
|
—
|
|
|
—
|
|
—
|
|
3
|
|
|
|
|
|
Table 5
|
|
Adjusted Free Cash Flow - Reconciliation of a Non-GAAP Measure -
Unaudited
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
|
(In $ millions)
|
|
Net cash provided by (used in) operating activities
|
|
229
|
|
|
147
|
|
|
Adjustments to operating cash for discontinued operations
|
|
6
|
|
|
(1
|
)
|
|
Net cash provided by (used in) operating activities from continuing
operations
|
|
235
|
|
|
146
|
|
|
Capital expenditures
|
|
(75
|
)
|
|
(74
|
)
|
|
Cash flow adjustments (1) |
|
(6
|
)
|
|
(8
|
)
|
|
Adjusted free cash flow
|
|
154
|
|
|
64
|
|
______________________________
(1) Amounts primarily associated with Kelsterbach plant relocation
related cash expenses and purchases of other productive assets that are
classified as 'investing activities' for GAAP purposes.
|
|
|
|
|
Table 6
|
|
Cash Dividends Received - Unaudited
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
|
|
(In $ millions)
|
|
Dividends from equity investments
|
|
45
|
|
47
|
|
Dividends from cost investments
|
|
23
|
|
24
|
|
Total
|
|
68
|
|
71
|
|
|
|
|
|
|
|
Table 7
|
|
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
|
|
|
|
|
|
|
|
|
|
As of
June 30,
2013
|
|
As of
December 31,
2012
|
|
|
|
(In $ millions)
|
|
Short-term borrowings and current installments of long-term debt -
third party and affiliates
|
|
224
|
|
168
|
|
Long-term debt
|
|
2,860
|
|
2,930
|
|
Total debt
|
|
3,084
|
|
3,098
|
|
Less: Cash and cash equivalents
|
|
1,107
|
|
959
|
|
Net debt
|
|
1,977
|
|
2,139
|
|
|
|
|
|
|
|
|
|
Table 8
|
|
|
|
|
|
|
|
|
Other Charges and Other Adjustments - Presentation of a
Non-GAAP Measure - Unaudited
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2013
|
|
June 30,
2013
|
|
Income Statement Classification
|
|
|
|
(In $ millions)
|
|
|
|
Other Charges (Gains), net
|
|
|
|
|
|
|
|
|
|
Employee termination benefits
|
|
1
|
|
2
|
|
3
|
|
|
|
Kelsterbach plant relocation
|
|
2
|
|
2
|
|
4
|
|
|
|
Total
|
|
3
|
|
4
|
|
7
|
|
|
|
Other Adjustments (1) |
|
|
|
|
|
|
|
|
|
Plant closures
|
|
1
|
|
1
|
|
2
|
|
Cost of sales / SG&A
|
|
Commercial disputes
|
|
5
|
|
-
|
|
5
|
|
Cost of sales
|
|
Other
|
|
4
|
|
3
|
|
7
|
|
Cost of sales / SG&A
|
|
Total
|
|
10
|
|
4
|
|
14
|
|
|
|
Total other charges and other adjustments
|
|
13
|
|
8
|
|
21
|
|
|
______________________________
(1) These items are included in net earnings but are not included in
Other charges (gains), net.
Copyright Business Wire 2013