Slide 1: Celanese 3Q 2010 Earnings Conference Call / Webcast
Dave Weidman, Chairman and Chief Executive Officer Steven Sterin, Senior Vice President and Chief Financial Officer Celanese 3Q 2010 Earnings Conference Call / Webcast Tuesday, October 26, 2010 10:00 a.m. ET
Slide 2: Forward looking statements
Forward looking statements Reconciliation and use of non-GAAP measures to U.S. GAAP This presentation may contain "forward-looking statements," which include information concerning the company's plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing nee
Slide 3: Dave Weidman, Chairman and Chief Executive Officer
Dave Weidman Chairman and Chief Executive Officer
Slide 4: Celanese Corporation 3Q 2010 highlights
Celanese Corporation 3Q 2010 highlights highlights highlights Third Quarter 2010: Strong results driven by overall higher volume and pricing with expanded margins Global demand remains healthy across all business lines * See slides 23 and 24 for equity affiliate preliminary results and Celanese prop
Slide 5: Celanese continues to execute its value creation levers
Celanese continues to execute its value creation levers Doubling VAE capacity at Nanjing, China facility Increasing acetate tow production in Nantong Expanding POM capacity in Europe and Middle East Geographic Growth Innovating with customer-driven and technology focus Continuing development of high
Slide 6: Steven Sterin, Senior Vice President and Chief Financial Officer
Steven Sterin Senior Vice President and Chief Financial Officer
Slide 7: Advanced Engineered Materials
Third Quarter 2010: Significant volume growth fueled by continued healthy demand across all end-use segments and FACT acquisition Robust innovation pipeline driving growth in new products and applications Preparing for Kelsterbach relocation with inventory build Advanced Engineered Materials Outlook
Slide 8: Consumer Specialties
Third Quarter 2010: Higher volume on increased global demand, primarily in acetate products Margin expansion driven by sustainable productivity initiatives that more than offset higher energy costs Consumer Specialties Outlook: Steady year-over-year earnings growth and sustained margins into Q4 Expe
Slide 9: Industrial Specialties
Third Quarter 2010: Higher pricing and volume as application innovation drove an improved product mix Additional volume from EVA performance polymers following Q3 2009 production outage Emulsions business in Asia at full utilization ahead of VAE capacity expansion in Nanjing mid-2011 Industrial Spec
Slide 10: Acetyl Intermediates
Acetyl Intermediates Third Quarter 2010: Strong results driven by improved global demand and additional production capacity in Asia Margin improvement with higher pricing for all major acetyl derivative products more than offset higher raw material cost and energy Benefits from manufacturing realign
Slide 11: YTD 2010: Earnings and Cash Flow impact
YTD 2010: Earnings and Cash Flow impact Strong performance of AEM affiliates driven by higher demand in the Asia region Higher equity earnings driven by improved global demand for specialty engineered polymers Affiliate performance YTD 2010 YTD 2009* Earnings from Equity Affiliates 131 58 Dividends
Slide 12: Q3 capital structure transactions
Term loan extension Bond issuance Revolver extension Interest rate swap $600 million issued at par 6.625% coupon 8-year maturity (Oct. 2018) Non-callable until Oct. 2014 Notes rated Ba3 / BB- $1.4 billion extended to Oct. 2016 Extended tranche currently priced @ L+300 bps $500 million non-extended p
Slide 13: Debt maturities and interest cost
Impact on Interest Cost Debt maturities and interest cost Net Interest Cost ($mm) Minimal effect in 2010 Net interest in 2011 approximately $225 million Significant decrease in 2012 as fixed LIBOR declines sharply 2010 2011 2012 2013 2014 2015 2016 2017 2018 Thereafter Term Loan 0 0 0 0 509 0 0 0 0
Slide 14: Available cash and capital use
Repaid $200 million of term loan debt Repurchased $21 million of common shares and paid $8 million of dividends during 3Q 2010 Expect approximately $350 million outflow for Kelsterbach relocation in 2010, including capital expenditures and project expense Strong cash generation continues throughout
Slide 15: Appendix
Appendix Notes: 1. References on the following slides to tables correspond to the tables included with Celanese press release dated October 26, 2010 2. Table 7 references to slide 20
Slide 16: Free cash flow 3Q 2010
Free cash flow 3Q 2010 Adjusted Free Cash Flow Adjusted Free Cash Flow Adjusted Free Cash Flow $ in millions 3Q 2010 3Q 2009 Net cash provided by operating activities $144 $109 Adjustments to operating cash for discontinued operations ($3) $2 Net cash provided by operating activities from continuing
Slide 17: 3Q 2010 Other charges and other adjustments by segment
3Q 2010 Other charges and other adjustments by segment - unaudited in millions AEM CS IS AI Other Total Employee termination benefits - - 14 - - 2 1 17 Plant/office closures - - - - - - (1) - - (1) Ticona Kelsterbach plant relocation 7 - - - - - - - - 7 Plumbing actions (26) - - - - - - - - (26) Ass
Slide 18: Reg G: Reconciliation of adjusted EPS (Table 6)
Reg G: Reconciliation of adjusted EPS (Table 6) - unaudited
Slide 19: Reg G: Reconciliation of net debt (Table 5)
Reg G: Reconciliation of net debt (Table 5) - - unaudited (in $ millions) Short-term borrowings and current installments of long-term debt - third party and affiliates 261 242 Long-term debt 3,010 3,259 Total debt 3,271 3,501 Less: Cash and cash equivalents 884 1,254 Net Debt 2,387 2,247 September 3
Slide 20: Reg G: Reconciliation of other charges and other adjustments (Table 7)
Reg G: Reconciliation of other charges and other adjustments (Table 7) - unaudited Other Charges: (in $ millions) 2010 2009 2010 2009 Employee termination benefits 17 65 26 94 Plant/office closures (1) 20 4 20 Ticona Kelsterbach plant relocation 7 4 17 10 Plumbing actions (26) - - (40) (3) Asset imp
Slide 21: Reg G: Reconciliation of operating EBITDA (Table 1)
Reg G: Reconciliation of operating EBITDA (Table 1) - unaudited Table 1 Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA - a Non-U.S. GAAP Measure - Unaudited (in $ millions) 2010 2009 2010 2009 As adjusted As adjusted Net Sales Advanced Engineered Materials 271 220 835
Slide 22: Reg G: Reconciliation of consolidated operating EBITDA to net earnings (Table 1A)
Reg G: Reconciliation of consolidated operating EBITDA to net earnings (loss) (Table 1A) - unaudited
Slide 23: Reg G: Equity affiliate preliminary results (Table 8)
Reg G: Equity affiliate preliminary results and Celanese proportional share (Table 8) - unaudited (in $ millions) 2010 2009 2010 2009 As adjusted Net Sales Ticona Affiliates - Asia 1 393 322 1,143 761 Ticona Affiliates - Middle East 2 216 182 718 427 Infraserv Affiliates 3 473 547 1,491 1,544 Total
Slide 24: Reg G: Equity affiliate results (Table 8 continued)
Reg G: Equity affiliate preliminary results and Celanese proportional share (Table 8 continued) - - unaudited (in $ millions) 2010 2009 2010 2009 As adjusted Proportional Net Sales Ticona Affiliates - Asia 1 181 148 528 351 Ticona Affiliates - Middle East 2 55 45 180 107 Infraserv Affiliates 3 155 1