Celanese Corporation Reports Third Quarter Earnings; Expects to Deliver 2017 Results at Higher End of Outlook

DALLAS–(BUSINESS WIRE)–Celanese Corporation (NYSE: CE), a global technology and specialty
materials company, today reported third quarter 2017 GAAP diluted
earnings per share of $1.68, second-highest for a third quarter, and
adjusted earnings per share of $1.93, an all-time record. Net sales
expanded 18 percent year over year to $1.6 billion. A combination of
commercial execution in the Acetyl Chain, extension of the pipeline
model in Materials Solutions, and broad productivity gains more than
offset the expected declines in tow earnings to deliver robust results.
The Acetyl Chain grew profitability by exercising the optionality in its
commercial model to overcome the disruption from Hurricane Harvey.
Advanced Engineered Materials (AEM) grew project commercializations
across regions in both legacy and acquired polymers.

Third Quarter 2017 Financial Highlights:

Third Quarter 2017 Highlights:

• Completed de-bottlenecking projects over the last year that increased
  output by 10 percent per unit for select POM, UHMW-PE, PPS and PBT
  assets in the US, Germany, and China.
• Announced plans to add production lines in the US, Italy and China to
  expand compounding capacity by roughly 100 kt per year. The expansion
  will be completed in 2018-2019 and will support demand growth across
  end-market applications.
• Commercialized a record 585 projects in the third quarter of 2017, a
  67 percent increase from third quarter of 2016, in engineered
  materials (AEM excluding affiliates). Increased target for projects
  closed in 2017 to above 2,100, up 52 percent from 2016.
• Completed the SAP system integration of Nilit Plastics, a major
  milestone towards full integration into Celanese.
• Advanced on the previously announced 150 kt expansion of vinyl acetate
  monomer at the Clear Lake, Texas facility. This expansion, expected to
  be commissioned at the end of 2018, will raise plant capacity to 450
  kt making it the largest VAM plant in the western hemisphere.
• Filed for regulatory approval of the tow joint venture with Blackstone
  in all six jurisdictions and received approval in Mexico. The European
  Commission is expected to continue its assessment with a final
  decision expected in spring 2018.

Third Quarter 2017 Business Segment Overview

Materials Solutions

Materials Solutions reported record net sales of $730 million in the
third quarter, a 24 percent increase year over year driven by growth in
Advanced Engineered Materials that outpaced the decline in Consumer
Specialties. AEM delivered its highest ever third quarter GAAP operating
profit of $97 million and highest ever segment income of $147 million.
There is strong receptivity for Celanese's customer-centric approach
coupled with the breadth of polymer solutions which continues to
strengthen AEM's growth profile. The segment set a new watermark of
advancing 585 projects to commercialization in the quarter by expanding
the opportunity set and improving its win-rate. Volume in the third
quarter of 2017 grew over last year mainly from the Nilit and SO.F.TER.
acquisitions, growth in Asia and new projects. As expected, the addition
of the Nilit and SO.F.TER. acquisitions along with higher indirect costs
from Hurricane Harvey lowered GAAP operating profit margin and segment
income margin year over year. Both acquisitions were segment income
accretive in the quarter and their margin is expected to improve over
the next few years as synergies are realized.

Acetate tow volume and price in the third quarter declined compared to
the same quarter in 2016 due to lower tow industry capacity utilization
rates and offset improvements in productivity. Results were consistent
sequentially.

Affiliate earnings in Materials Solutions increased 18 percent year over
year to $71 million mainly due to the impact of the Ibn Sina turnaround
in the third quarter of 2016 which did not repeat in 2017.

Acetyl Chain

The Acetyl Chain GAAP operating profit of $148 million in the third
quarter was $40 million higher than the third quarter of 2016 while core
income of $157 million was $48 million higher. Profitability grew
despite operational and supply chain disruptions in the Gulf Coast
caused by Hurricane Harvey. The chain responded by swiftly executing
contingency plans to minimize impact and quickly restore operations.
Pricing was higher than the third quarter of last year driven by the
success of commercial actions mainly in Asia as well as continued
strength in global acetyls. Margin expansion in the chain was driven by
the Acetyl Intermediates segment which recorded GAAP operating margin of
18.7 percent and segment income margin of 19.6 percent, both all time
records. Results in the quarter highlight the chain's business model
which leverages volatility in the global acetyl supply chain to maximize
profitability.

Cash Flow

Operating cash flow in the third quarter was $255 million and free cash
flow was $181 million. Capital expenditures were $64 million in the
quarter. The company repurchased approximately 2 million shares for $200
million in the quarter and $500 million total for the year. $262 million
of cash was returned to shareholders in the quarter including $62
million in dividends.

Outlook

"Success in the third quarter and for most of 2017 has come from our
ability to rapidly translate changes in the business environment into
new value creation opportunities through our business models. In
Advanced Engineered Materials, the disciplined approach to innovation
through the pipeline model has raised profits and provided a road map
for accelerating value uplift from the SO.F.TER. and Nilit acquisitions.
The Acetyl Chain is expected to maintain its commercial traction in the
quarter and additional initiatives are in place to take advantage of the
gradual strengthening of the market. There is business and productivity
momentum that should offset fourth quarter weakness. This combination
gives confidence we can grow 2017 adjusted earnings per share toward the
higher end of the 9-11 percent range, year over year," said Mark Rohr,
chairman and chief executive officer.

We are unable to reconcile forecasted adjusted earnings per share growth
to US GAAP diluted earnings per share without unreasonable efforts
because a forecast of Certain Items, such as mark-to-market pension
gains/losses, is not practical.

The Company's earnings presentation and prepared remarks related to the
third quarter results will be posted on its website at www.celanese.com
under Investor Relations/Events and Presentations after market close on
October 16, 2017. Information about Non-US GAAP measures is included in
a Non-US GAAP Financial Measures and Supplemental Information document
posted on the website and available at the link below. See "Non-GAAP
Financial Measures" below.

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. Our two complementary
business cores, Acetyl Chain and Materials Solutions, use the full
breadth of Celanese's global chemistry, technology and business
expertise to create value for our customers and the corporation. As we
partner with our customers to solve their most critical business needs,
we strive to make a positive impact on our communities and the world
through The Celanese Foundation. Based in Dallas, Celanese employs
approximately 7,500 employees worldwide and had 2016 net sales of $5.4
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, synergies, 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, including the
announced joint venture transaction. 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,
including with respect to the joint venture. 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,
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
current levels of production costs and to improve productivity by
implementing technological improvements to existing plants; the ability
to identify desirable potential acquisition targets and to consummate
acquisition or investment transactions consistent with the Company's
strategy; 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 technologies, or the theft of
such intellectual property; compliance and other costs and potential
disruption or interruption of production or operations due to accidents,
interruptions in sources of raw materials, 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, 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.

Non-GAAP Financial Measures

Presentation

This document presents the Company's business segments in two
subtotals, reflecting our two cores, the Acetyl Chain and Materials
Solutions, based on similarities among customers, business models and
technical processes. As described in the Company's annual report on Form
10-K and quarterly reports on Form 10-Q, the Acetyl Chain includes the
Company's Acetyl Intermediates segment and the Industrial Specialties
segment. Materials Solutions includes the Company's Advanced Engineered
Materials segment and the Consumer Specialties segment.

Use of Non-US GAAP Financial Information

This release uses the following Non-US GAAP measures: adjusted EBIT,
adjusted EBIT margin, operating EBITDA, adjusted earnings per share and
free cash flow. These measures are not recognized in accordance with US
GAAP and should not be viewed as an alternative to US GAAP measures of
performance or liquidity. The most directly comparable financial measure
presented in accordance with US GAAP in our consolidated financial
statements for adjusted EBIT and operating EBITDA is net earnings (loss)
attributable to Celanese Corporation; for adjusted EBIT margin is
operating margin; for adjusted earnings per share is earnings (loss)
from continuing operations attributable to Celanese Corporation per
common share-diluted; and for free cash flow is net cash provided by
(used in) operations.

Definitions of Non-US GAAP Financial Measures

• Adjusted EBIT is a performance measure used by the Company and is
  defined by the Company as net earnings (loss) attributable to Celanese
  Corporation, plus (earnings) loss from discontinued operations, less
  interest income, plus interest expense, plus refinancing expense and
  taxes, and further adjusted for Certain Items (refer to Table 8 of our
  Non-US GAAP Financial Measures and Supplemental Information document).
  We may provide guidance on adjusted EBIT but are unable to reconcile
  forecasted adjusted EBIT to a US GAAP financial measure without
  unreasonable efforts because a forecast of Certain Items, such as
  mark-to-market pension gains and losses, which may be significant, is
  not practical. Adjusted EBIT margin is defined by the Company as
  adjusted EBIT divided by net sales.
• Adjusted EBIT by core (i.e., Acetyl Chain and/or Materials
  Solutions) may also be referred to by management as core income.
  Adjusted EBIT margin by core may also be referred to by management as
  core income margin. Adjusted EBIT by business segment may also be
  referred to by management as segment income. Adjusted EBIT margin by
  business segment may also be referred to by management as segment
  income margin.
• Operating EBITDA is a performance measure used by the Company and
  is defined by the Company as net earnings (loss) attributable to
  Celanese Corporation, plus (earnings) loss from discontinued
  operations, less interest income, plus interest expense, plus
  refinancing expense, taxes and depreciation and amortization, and
  further adjusted for Certain Items, which Certain Items include
  accelerated depreciation and amortization expense. Operating EBITDA is
  equal to adjusted EBIT plus depreciation and amortization.
• Adjusted earnings per share is a performance measure used by the
  Company and is defined by the Company as earnings (loss) from
  continuing operations attributable to Celanese Corporation, adjusted
  for income tax (provision) benefit, Certain Items, and refinancing and
  related expenses, divided by the number of basic common shares and
  dilutive restricted stock units and stock options calculated using the
  treasury method. We may provide guidance on adjusted earnings per
  share but are unable to reconcile forecasted adjusted earnings per
  share to a US GAAP financial measure without unreasonable efforts
  because a forecast of Certain Items, such as mark-to-market pension
  gains and losses, which may be significant, is not practical.
  Note:
  The income tax expense (benefit) on Certain Items ("Non-GAAP
  adjustments") is determined using the applicable rates in the taxing
  jurisdictions in which the Non-GAAP adjustments occurred and includes
  both current and deferred income tax expense (benefit). The income tax
  rate used for adjusted earnings per share approximates the midpoint in
  a range of forecasted tax rates for the year. This range may include
  certain partial or full-year forecasted tax opportunities and related
  costs, where applicable, and specifically excludes changes in
  uncertain tax positions, discrete recognition of GAAP items on a
  quarterly basis, other pre-tax items adjusted out of our GAAP earnings
  for adjusted earnings per share purposes and changes in management's
  assessments regarding the ability to realize deferred tax assets for
  GAAP. In determining the adjusted earnings per share tax rate, we
  reflect the impact of foreign tax credits when utilized, or expected
  to be utilized, absent discrete events impacting the timing of foreign
  tax credit utilization. We analyze this rate quarterly and adjust it
  if there is a material change in the range of forecasted tax rates; an
  updated forecast would not necessarily result in a change to our tax
  rate used for adjusted earnings per share. The adjusted tax rate is an
  estimate and may differ from the actual tax rate used for GAAP
  reporting in any given reporting period. Table 3a of our Non-US GAAP
  Financial Measures and Supplemental Information document summarizes
  the reconciliation of our estimated GAAP effective tax rate to the
  adjusted tax rate. The estimated GAAP rate excludes discrete
  recognition of GAAP items due to our inability to forecast such items.
  As part of the year-end reconciliation, we will update the
  reconciliation of the GAAP effective tax rate to the adjusted tax rate
  for actual results.
• Free cash flow is a liquidity measure used by the Company and is
  defined by the Company as cash flow from operations, less capital
  expenditures on property, plant and equipment, and adjusted for
  capital contributions from or distributions to Mitsui & Co., Ltd.
  ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC
  ("Fairway").

Reconciliation of Non-US GAAP Financial Measures

Reconciliations of the Non-US GAAP financial measures used in this
press release to the comparable US GAAP financial measure, together with
information about the purposes and uses of Non-US GAAP financial
measures, are included in our Non-US GAAP Financial Measures and
Supplemental Information document filed as an exhibit to our Current
Report on Form 8-K filed with the SEC on or about October 16, 2017 and
also available on our website at www.celanese.com
under Financial Information, Non-GAAP Financial Measures, or at this
link: http://investors.celanese.com/interactive/lookandfeel/4103411/Non-GAAP.PDF.

Results Unaudited

The results in this document, together with the adjustments made to
present the results on a comparable basis, have not been audited and are
based on internal financial data furnished to management. Quarterly
results should not be taken as an indication of the results of
operations to be reported for any subsequent period or for the full
fiscal year.

Supplemental Information

Additional information about our prior period performance is included
in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial
Measures and Supplemental Information document.

Contacts

Celanese Corporation
Investor Relations
Surabhi
Varshney, +1-972-443-3078
[email protected]
or
Media
– U.S.
Travis Jacobsen, +1-972-443-3750
[email protected]
or
Media
– Europe
Jens Kurth, +49(0)69 45009 1574
[email protected]

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