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Celanese Corporation Reports Full Year 2018 and Fourth Quarter Earnings; Reaffirms Long-term Growth Outlook

January 28, 2019 4:49 PM

DALLAS--(BUSINESS WIRE)-- Celanese Corporation (NYSE: CE), a global specialty materials company, today reported record GAAP diluted earnings per share of $8.95 and adjusted earnings per share of $11.00 for 2018. The Company also reported fourth quarter GAAP diluted earnings per share of $0.73 and adjusted earnings per share of $2.38. The difference between GAAP and adjusted earnings per share for the quarter and year was due to Certain Items, primarily a pension mark to market adjustment as well as expenses related to M&A and restructuring activities. Net sales for the year grew 17 percent over 2017 to $7.2 billion on price and volume expansion. Robust contributions from both Engineered Materials and the Acetyl Chain drove financial performance for the year. The Acetyl Chain elevated earnings to new levels by exercising its business model to grow volume and price year over year amid improving industry fundamentals. Engineered Materials grew through expanded project commercializations, contributions from the Nilit and Omni acquisitions, and improved joint venture performance. Celanese generated operating cash flow of $1.6 billion and free cash flow of $1.2�billion, both records, and deployed it to high return investments with the Clear Lake VAM expansion, acquisition of a Linde synthesis gas unit at Clear Lake, and acquisitions of Omni and Next Polymers. During the year, Celanese returned a record $1.1�billion in cash to shareholders through share repurchases and dividends.

Fourth Quarter and Full Year 2018 Highlights:

� � Three Months Ended � � Year Ended
December 31, December 31,
� 2018 � � � � 2017 � � 2018 � � � � 2017 �
(unaudited)
(In $ millions, except per share data)
Net Sales
Engineered Materials 622 580 2,593 2,213
Acetate Tow 161 157 649 668
Acetyl Chain 936 888 4,042 3,371
Intersegment Eliminations � (30 ) � (32 ) � (129 ) � (112 )
Total � 1,689 � � 1,593 � � 7,155 � � 6,140 �
�
�
Three Months Ended Year Ended
December 31, December 31,
� 2018 � � 2017 � � 2018 � � 2017 �
(As Adjusted) (As Adjusted)
(unaudited)
(In $ millions, except per share data)
Operating Profit (Loss)
Engineered Materials 95 98 460 412
Acetate Tow 19 41 130 189
Acetyl Chain 211 175 1,024 509
Other Activities � (66 ) � (74 ) � (280 ) � (253 )
Total � 259 � � 240 � � 1,334 � � 857 �
Net earnings (loss) 101 204 1,213 849
�
Adjusted EBIT(1)(2)
Engineered Materials 150 142 694 599
Acetate Tow 53 68 273 301
Acetyl Chain 215 178 1,022 575
Other Activities � (25 ) � (36 ) � (137 ) � (119 )
Total � 393 � � 352 � � 1,852 � � 1,356 �
�
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials 49 43 219 171
Acetate Tow 25 26 116 107
�
Operating EBITDA(1) 471 431 2,168 1,659
Diluted EPS - continuing operations $ 0.73 $ 1.50 $ 8.95 $ 6.19
Diluted EPS - total $ 0.75 $ 1.49 $ 8.91 $ 6.09
Adjusted EPS(1) $ 2.38 $ 1.98 $ 11.00 $ 7.51
�
Net cash provided by (used in) investing activities (98 ) (92 ) (507 ) (549 )
Net cash provided by (used in) financing activities (526 ) 145 (1,165 ) (351 )
Net cash provided by (used in) operating activities 363 58 1,558 803
Free cash flow(1) 261 (38 ) 1,198 509

_____________________________

(1)

� See "Non-US GAAP Financial Measures" below.

(2)

The Company's discussion of adjusted earnings includes use of the term "segment income". This non-GAAP term is defined below and reconciled in our Non-US GAAP Financial Measures and Supplemental Information document below.
�

Full Year Business Segment Overview

Engineered Materials

Engineered Materials' net sales grew 17 percent over 2017 to $2.6 billion. GAAP operating profit of $460 million and segment income of $694 million were driven by both price and volume expansion over 2017. Project commercializations totaling 3,274 for the year, contributions from the Nilit and Omni acquisitions, and improved affiliate performance delivered the fourth straight year of GAAP operating profit expansion and fifth straight year of segment income expansion for the segment. Engineered Materials delivered GAAP operating profit margin of 17.7 percent and segment income margin of 26.8 percent for the year. Volume growth of 9 percent over 2017 was driven by incremental project commercializations and contributions from acquisitions, and more than offset broad destocking across the value chain at the end of 2018. The segment expanded pricing 6 percent over 2017 levels on improved mix and commercial initiatives throughout the year. Affiliate earnings expanded 27 percent over 2017 to $218 million, primarily due to Celanese's higher economic interest in the Ibn Sina joint venture and higher MTBE pricing.

Acetyl Chain

The Acetyl Chain generated net sales of $4.0 billion in 2018, an increase of 20 percent over the prior year. Pricing expanded 19 percent over 2017 levels as the business flexed its global network amid sustained improvements in industry fundamentals and utilization rates. GAAP operating profit of $1.0 billion and segment income of $1.0�billion, both records, represent another step up in the earnings power of the segment. The Acetyl Chain delivered highest-ever GAAP operating profit margin of 25.3 percent, a 1,020 basis point improvement over 2017, and record segment income margin of 25.3 percent, an 820 basis point expansion over the same period. Since implementing a model to leverage its global network, the business has demonstrated multiple years of continued margin expansion by identifying highest value commercial opportunities while driving productivity. Numerous activations to optimize the broad network delivered margin expansion in 2018 that more than offset increases in raw material, freight, and energy costs.

Acetate Tow

Acetate Tow GAAP operating profit was $130 million and segment income was $273 million for the year. Volume was flat year over year. Pricing in 2018 fell 3 percent off 2017 due to lower industry capacity utilization and was partially offset by mix. Raw material costs increased in 2018 over the prior year, primarily driven by higher acetyls pricing and freight costs. Dividends from affiliates were $116 million, 8 percent higher than last year.

Recent Highlights

Fourth Quarter Business Segment Overview

Engineered Materials

Engineered Materials delivered record fourth quarter net sales of $622 million, 7 percent higher than the same quarter of 2017. The segment delivered fourth quarter GAAP operating profit of $95 million and fourth quarter segment income of $150 million as the business grew pricing and volume over the prior year. In the fourth quarter, a focused effort to extend the opportunity pipeline model grew Engineered Materials volumes over the fourth quarter of 2017, more than offsetting a reset of inventory levels across the industry value chain which began late in the quarter. The opportunity pipeline commercialized 866 projects in the quarter, 48 percent higher than the same quarter of 2017, as the business increasingly met customer innovation needs with customized technology solutions. GAAP operating profit margin was 15.3 percent and segment income margin was 24.1 percent, respectively, down 160 and 40 basis points from last year, driven by new acquisitions contributing to margin dilution and strong growth in Asia. Margins are expected to recover from fourth quarter levels as the segment returns to more normalized regional sales mix and lower raw material costs in the quarter flow through inventory.

Acetyl Chain

The Acetyl Chain's net sales for the quarter were $936 million, 5 percent higher than the fourth quarter of 2017, driven by price increases. GAAP operating profit of $211 million and segment income of $215 million, fourth quarter records, both increased by 21 percent over the same quarter last year. The global supply network and integrated product chain positioned the Acetyl Chain to expand pricing in excess of raw material increases year over year. Volume in the quarter declined 2 percent over the fourth quarter of 2017 as the segment offset most of the impact of an extended VAM turnaround at Clear Lake and customer destocking in the quarter, particularly in Asia. The Acetyl Chain delivered GAAP operating margin of 22.5 percent and segment income margin of 23.0 percent, both fourth quarter records, sustaining margin levels in a quarter with winter seasonality.

Acetate Tow

Acetate Tow recorded fourth quarter GAAP operating profit of $19 million and segment income of $53 million. Income in the quarter declined year over year due primarily to the impact of an inventory build in the fourth quarter of 2017 and higher acetyls raw material costs. Pricing declined 2 percent from the fourth quarter of 2017. Segment performance is expected to rebound sequentially in the first quarter of 2019, more consistent with the third quarter of 2018.

Cash Flow and Tax

Celanese generated operating cash flow of $1.6�billion and free cash flow of $1.2 billion for the year. Capital expenditures for the year was $337 million, approximately $70 million higher than 2017 due to a number of productivity investments and incremental expansion projects across businesses. For the year, $1.1 billion of cash was returned to shareholders, including $817�million in share repurchases and $280�million in cash dividends. The Company completed $567 million in share repurchases in the fourth quarter with $713 million remaining under the current share repurchase authorization as of December�31,�2018. The effective US GAAP tax rate was 19 percent for 2018 compared to 20 percent for 2017. The tax rate for adjusted earnings per share was 14 percent for 2018, 2 percent lower year over year, primarily due to the impact of US tax reform.

Outlook

"Underlying fundamentals and forward looking demand forecasts for our products and solutions-based businesses remain strong. The strength of our business models, additional contribution from organic investment projects underway, and planned acquisition contributions give us confidence in reaffirming our plan to earn $12 per share in 2020. Having said that, we believe the economic weakness surfacing last quarter primarily in Europe and Asia will continue through the first quarter and into the second before global business starts to recover. Assuming this slower start and expecting some fourth quarter 2019 moderation, which we commonly see, we would anticipate 2019 adjusted earnings of approximately $10.50 per share. We will be in a better position to refine this outlook during our first quarter earnings call in April, based on updated views of customer activity and economic trends," said Mark Rohr, chairman and chief executive officer.

Regarding a forward view on a US GAAP basis, 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 fourth quarter and full year results will be posted on its website at investors.celanese.com under News & Events/Presentations after market close on January�28, 2019. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our 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 businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2018 net sales of $7.2 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, 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 their current levels of production costs and to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; 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 three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

Use of Non-US GAAP Financial Information

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

Definitions of Non-US GAAP Financial Measures

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 January�28, 2019 and also available on our website at investors.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.

�
�

Consolidated Statements of Operations - Unaudited

�
� � Three Months Ended
December 31,
2018 � � 2017
(As Adjusted)

(In $ millions, except share and per
share data)

Net sales 1,689 1,593
Cost of sales (1,269 ) (1,180 )
Gross profit 420 413
Selling, general and administrative expenses (134 ) (143 )
Amortization of intangible assets (6 ) (6 )
Research and development expenses (18 ) (20 )
Other (charges) gains, net — (2 )
Foreign exchange gain (loss), net (2 ) (1 )
Gain (loss) on disposition of businesses and assets, net (1 ) (1 )
Operating profit (loss) 259 240
Equity in net earnings (loss) of affiliates 53 48
Non-operating pension and other postretirement employee benefit (expense) (139 ) (23 )
Interest expense (30 ) (31 )
Refinancing expense (1 ) —
Interest income 2 —
Dividend income - equity investments 25 26
Other income (expense), net 5 � 5 �
Earnings (loss) from continuing operations before tax 174 265
Income tax (provision) benefit (76 ) (60 )
Earnings (loss) from continuing operations 98 � 205 �
Earnings (loss) from operation of discontinued operations 4 (2 )
Gain (loss) on disposition of discontinued operations — —
Income tax (provision) benefit from discontinued operations (1 ) 1 �
Earnings (loss) from discontinued operations 3 � (1 )
Net earnings (loss) 101 204
Net (earnings) loss attributable to noncontrolling interests (2 ) (1 )
Net earnings (loss) attributable to Celanese Corporation 99 � 203 �
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations 96 204
Earnings (loss) from discontinued operations 3 � (1 )
Net earnings (loss) 99 � 203 �
Earnings (loss) per common share - basic
Continuing operations 0.73 1.50
Discontinued operations 0.02 � (0.01 )
Net earnings (loss) - basic 0.75 � 1.49 �
Earnings (loss) per common share - diluted
Continuing operations 0.73 1.50
Discontinued operations 0.02 � (0.01 )
Net earnings (loss) - diluted 0.75 � 1.49 �
Weighted average shares (in millions)
Basic 131.2 135.8
Diluted 132.1 136.3
�
�

Consolidated Statements of Operations - Unaudited

�
� � Year Ended December 31,
2018 � � 2017
(As Adjusted)

(In $ millions, except share and per
share data)

Net sales 7,155 6,140
Cost of sales (5,183 ) (4,629 )
Gross profit 1,972 1,511
Selling, general and administrative expenses (546 ) (496 )
Amortization of intangible assets (24 ) (20 )
Research and development expenses (72 ) (73 )
Other (charges) gains, net 9 (59 )
Foreign exchange gain (loss), net — (1 )
Gain (loss) on disposition of businesses and assets, net (5 ) (5 )
Operating profit (loss) 1,334 857
Equity in net earnings (loss) of affiliates 233 183
Non-operating pension and other postretirement employee benefit (expense) (62 ) 44
Interest expense (125 ) (122 )
Refinancing expense (1 ) —
Interest income 6 2
Dividend income - equity investments 117 108
Other income (expense), net 8 � 3 �
Earnings (loss) from continuing operations before tax 1,510 1,075
Income tax (provision) benefit (292 ) (213 )
Earnings (loss) from continuing operations 1,218 � 862 �
Earnings (loss) from operation of discontinued operations (5 ) (16 )
Gain (loss) on disposition of discontinued operations — —
Income tax (provision) benefit from discontinued operations — � 3 �
Earnings (loss) from discontinued operations (5 ) (13 )
Net earnings (loss) 1,213 849
Net (earnings) loss attributable to noncontrolling interests (6 ) (6 )
Net earnings (loss) attributable to Celanese Corporation 1,207 � 843 �
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations 1,212 856
Earnings (loss) from discontinued operations (5 ) (13 )
Net earnings (loss) 1,207 � 843 �
Earnings (loss) per common share - basic
Continuing operations 9.03 6.21
Discontinued operations (0.04 ) (0.10 )
Net earnings (loss) - basic 8.99 � 6.11 �
Earnings (loss) per common share - diluted
Continuing operations 8.95 6.19
Discontinued operations (0.04 ) (0.10 )
Net earnings (loss) - diluted 8.91 � 6.09 �
Weighted average shares (in millions)
Basic 134.3 137.9
Diluted 135.4 138.3
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�

Consolidated Balance Sheets - Unaudited

�
� � As of December 31,
2018 � � 2017
(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents 439 576
Trade receivables - third party and affiliates, net 1,017 986
Non-trade receivables, net 301 244
Inventories 1,046 900
Marketable securities, at fair value 31 32
Other assets 40 � 54 �
Total current assets 2,874 � 2,792 �
Investments in affiliates 979 976
Property, plant and equipment, net 3,719 3,762
Deferred income taxes 84 366
Other assets 290 338
Goodwill 1,057 1,003
Intangible assets, net 310 � 301 �
Total assets 9,313 � 9,538 �
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates 561 326
Trade payables - third party and affiliates 819 807
Other liabilities 343 354
Income taxes payable 56 � 72 �
Total current liabilities 1,779 � 1,559 �
Long-term debt 2,970 3,315
Deferred income taxes 255 211
Uncertain tax positions 158 156
Benefit obligations 564 585
Other liabilities 208 413
Commitments and Contingencies
Stockholders' Equity
Preferred stock — —
Common stock — —
Treasury stock, at cost (2,849 ) (2,031 )
Additional paid-in capital 233 175
Retained earnings 5,847 4,920
Accumulated other comprehensive income (loss), net (247 ) (177 )
Total Celanese Corporation stockholders' equity 2,984 2,887
Noncontrolling interests 395 � 412 �
Total equity 3,379 � 3,299 �
Total liabilities and equity 9,313 � 9,538 �
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Non-US GAAP Financial Measures and Supplemental Information

January�28, 2019

In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.

Purpose

The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.

Presentation

This document presents the Company's three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

Use of Non-US GAAP Financial Measures

From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.

Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Financial Information/Documents page of our website, investors.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.

Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Financial Information/Non-GAAP Financial Measures page of our website, investors.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.

Specific Measures Used

This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity.

Definitions

Supplemental Information

Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:

Recent Developments

Effective January 1, 2018, we reorganized our operating and reportable segments to align with recent structural and management reporting changes. The changes reflect the movement of our food ingredients business from the Consumer Specialties reportable segment into the Engineered Materials reportable segment. In addition, the former Consumer Specialties reportable segment was renamed the Acetate Tow segment, and the former Advanced Engineered Materials reportable segment was renamed the Engineered Materials segment. This reorganization better reflects how we manage our food ingredients' related products commercially. Engineered Materials and food ingredients are both project-based models that focus on delivering customized solutions and are led by the same senior management team.

Effective December 31, 2018, we further reorganized our operating and reportable segments to align with recent structural and management reporting changes. The change reflects the resegmentation of the former Industrial Specialties and former Acetyl Intermediates operating and reportable segments, to the Acetyl Chain operating and reportable segment. This reorganization reflects the culmination of a shift in operating strategy and organizational hierarchy, with a focus on integration, collaboration and maximization of value creation through our global optionality and integrated chain model of the underlying businesses along the Acetyl Chain segment. These changes in operating and reportable segments were applied retrospectively to prior periods through 2014.

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.

Table 1
Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited
� � � � � � � � � �
2018 � Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 � Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions)
Net earnings (loss) attributable to Celanese Corporation 1,207 99 401 344 363 843 203 226 231 183
(Earnings) loss from discontinued operations 5 (3 ) 6 — 2 13 1 4 8 —
Interest income (6 ) (2 ) (2 ) — (2 ) (2 ) — (1 ) (1 ) —
Interest expense 125 30 30 32 33 122 31 32 30 29
Refinancing expense 1 1 — — — — — — — —
Income tax provision (benefit) 292 76 54 97 65 213 60 57 40 56

Certain Items attributable to Celanese Corporation (Table 8)

228 � 192 � 5 � 18 13 � 167 � 57 27 � 18 � 65
Adjusted EBIT 1,852 393 494 491 474 1,356 352 345 326 333
Depreciation and amortization expense(1) 316 � 78 � 77 � 82 79 � 303 � 79 78 � 75 � 71
Operating EBITDA 2,168 � 471 � 571 � 573 553 � 1,659 � 431 423 � 401 � 404
� � � � � � � � � �
2018 Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions)
Engineered Materials 1 — — 1 — — — — — —
Acetate Tow 19 5 11 3 — — — — — —
Acetyl Chain 7 5 2 — — 2 — 2 — —
Other Activities(2) — — — — — — — — — —
Accelerated depreciation and amortization expense 27 10 13 4 — 2 — 2 — —
Depreciation and amortization expense(1) 316 78 77 82 79 303 79 78 75 71
Total depreciation and amortization expense 343 88 90 86 79 305 79 80 75 71

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(1)

�

Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.

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(2)

Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

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Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited

�
2018 � Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 � Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin � � � � � � � � �
Engineered Materials 460 17.7 % 95 15.3 % 124 19.3 % 114 17.2 % 127 19.1 % 412 18.6 % 98 16.9 % 105 18.3 % 105 19.2 % 104 20.2 %
Acetate Tow 130 20.0 % 19 11.8 % 26 16.5 % 39 24.1 % 46 27.4 % 189 28.3 % 41 26.1 % 45 28.7 % 41 25.2 % 62 32.5 %
Acetyl Chain(1) 1,024 25.3 % 211 22.5 % 287 28.5 % 273 26.0 % 253 24.1 % 509 15.1 % 175 19.7 % 147 17.0 % 135 16.3 % 52 6.5 %
Other Activities(2) (280 ) (66 ) (63 ) (68 ) (83 ) (253 ) (74 ) (68 ) (63 ) (48 )
Total 1,334 � 18.6 % 259 � 15.3 % 374 � 21.1 % 358 � 19.4 % 343 � 18.5 % 857 � 14.0 % 240 � 15.1 % 229 � 14.6 % 218 � 14.4 % 170 � 11.6 %
Less: Net Earnings (Loss) Attributable to NCI(1) 6 � 2 � 1 � 1 � 2 � 6 � 1 � 2 � 2 � 1 �
Operating Profit (Loss) Attributable to Celanese Corporation 1,328 � 18.6 % 257 � 15.2 % 373 � 21.1 % 357 � 19.4 % 341 � 18.4 % 851 � 13.9 % 239 � 15.0 % 227 � 14.5 % 216 � 14.3 % 169 � 11.5 %
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
Engineered Materials 460 17.7 % 95 15.3 % 124 19.3 % 114 17.2 % 127 19.1 % 412 18.6 % 98 16.9 % 105 18.3 % 105 19.2 % 104 20.2 %
Acetate Tow 130 20.0 % 19 11.8 % 26 16.5 % 39 24.1 % 46 27.4 % 189 28.3 % 41 26.1 % 45 28.7 % 41 25.2 % 62 32.5 %
Acetyl Chain(1) 1,018 25.2 % 209 22.3 % 286 28.4 % 272 25.9 % 251 23.9 % 503 14.9 % 174 19.6 % 145 16.8 % 133 16.1 % 51 6.4 %
Other Activities(2) (280 ) (66 ) (63 ) (68 ) (83 ) (253 ) (74 ) (68 ) (63 ) (48 )
Total 1,328 � 18.6 % 257 � 15.2 % 373 � 21.1 % 357 � 19.4 % 341 � 18.4 % 851 � 13.9 % 239 � 15.0 % 227 � 14.5 % 216 � 14.3 % 169 � 11.5 %
Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
Engineered Materials 219

�

(3)

49 62 54 54 171 43 47 38 43
Acetate Tow 116 25 26 33 32 107 26 24 28 29
Acetyl Chain 8 1 2 3 2 6 2 1 2 1
Other Activities(2) 15 � 8 � 1 � — � 6 � 10 � 8 � (4 ) 2 � 4 �
Total 358 � 83 � 91 � 90 � 94 � 294 � 79 � 68 � 70 � 77 �
Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation
Engineered Materials — — — — — — — — — —
Acetate Tow — — — — — — — — — —
Acetyl Chain — — — — — 2 1 1 — —
Other Activities(2) (62 ) (139 ) 25 � 26 � 26 � 42 � (24 ) 22 � 22 � 22 �
Total (62 ) (139 ) 25 � 26 � 26 � 44 � (23 ) 23 � 22 � 22 �
Certain Items Attributable to Celanese Corporation (Table 8)
Engineered Materials 15 6 1 7 1 16 1 5 7 3
Acetate Tow 27 9 13 5 — 5 1 — 2 2
Acetyl Chain (4 ) 5 (11 ) 2 — 64 1 10 (3 ) 56
Other Activities(2) 190 � 172 � 2 � 4 � 12 � 82 � 54 � 12 � 12 � 4 �
Total 228 � 192 � 5 � 18 � 13 � 167 � 57 � 27 � 18 � 65 �
Adjusted EBIT / Adjusted EBIT Margin
Engineered Materials 694 26.8 % 150 24.1 % 187 29.1 % 175 26.4 % 182 27.4 % 599 27.1 % 142 24.5 % 157 27.4 % 150 27.5 % 150 29.2 %
Acetate Tow 273 42.1 % 53 32.9 % 65 41.1 % 77 47.5 % 78 46.4 % 301 45.1 % 68 43.3 % 69 43.9 % 71 43.6 % 93 48.7 %
Acetyl Chain 1,022 25.3 % 215 23.0 % 277 27.5 % 277 26.4 % 253 24.1 % 575 17.1 % 178 20.0 % 157 18.2 % 132 16.0 % 108 13.6 %
Other Activities(2) (137 ) (25 ) (35 ) (38 ) (39 ) (119 ) (36 ) (38 ) (27 ) (18 )
Total 1,852 � 25.9 % 393 � 23.3 % 494 � 27.9 % 491 � 26.6 % 474 � 25.6 % 1,356 � 22.1 % 352 � 22.1 % 345 � 22.0 % 326 � 21.6 % 333 � 22.6 %

___________________________

(1)

�

Net earnings (loss) attributable to NCI is included within the Acetyl Chain segment.

�

(2)

Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

�

(3)

Includes $218 million of Equity in net earnings (loss) of affiliates and $1 million of Other income.

� � � � � � � � � �

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)

�
2018 � Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 � Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions, except percentages)
Depreciation and Amortization Expense(1) � � � � � � � � � �
Engineered Materials 125 30 31 32 32 111 29 30 27 25
Acetate Tow 39 9 10 10 10 41 11 10 10 10
Acetyl Chain 141 36 34 36 35 141 37 34 36 34
Other Activities(2) 11 � 3 � 2 � 4 � 2 � 10 � 2 � 4 � 2 � 2 �
Total 316 � 78 � 77 � 82 � 79 � 303 � 79 � 78 � 75 � 71 �
Operating EBITDA / Operating EBITDA Margin
Engineered Materials 819 31.6 % 180 28.9 % 218 34.0 % 207 31.2 % 214 32.2 % 710 32.1 % 171 29.5 % 187 32.6 % 177 32.4 % 175 34.0 %
Acetate Tow 312 48.1 % 62 38.5 % 75 47.5 % 87 53.7 % 88 52.4 % 342 51.2 % 79 50.3 % 79 50.3 % 81 49.7 % 103 53.9 %
Acetyl Chain 1,163 28.8 % 251 26.8 % 311 30.9 % 313 29.8 % 288 27.4 % 716 21.2 % 215 24.2 % 191 22.1 % 168 20.3 % 142 17.9 %
Other Activities(2) (126 ) (22 ) (33 ) (34 ) (37 ) (109 ) (34 ) (34 ) (25 ) (16 )
Total 2,168 � 30.3 % 471 � 27.9 % 571 � 32.2 % 573 � 31.1 % 553 � 29.9 % 1,659 � 27.0 % 431 � 27.1 % 423 � 27.0 % 401 � 26.6 % 404 � 27.5 %

___________________________

(1)

�

Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.

�

(2)

Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

� � � � � � � � � �
Table 3
Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited
�
2018 Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 Q4 '17 Q3 '17 Q2 '17 Q1 '17
� per share � per share � per share � per share � per share � per share � per share � per share � per share � per share
(In $ millions, except per share data)
Earnings (loss) from continuing operations attributable to Celanese Corporation 1,212 8.95 96 0.73 407 3.00 344 2.52 365 2.68 856 6.19 204 1.50 230 1.68 239 1.72 183 1.30
Income tax provision (benefit) 292 � 76 � 54 � 97 � 65 � 213 � 60 � 57 � 40 � 56 �
Earnings (loss) from continuing operations before tax 1,504 172 461 441 430 1,069 264 287 279 239

Certain Items attributable to Celanese Corporation (Table 8)

228 192 5 18 13 167 57 27 18 65
Refinancing and related expenses 1 � 1 � — � — � — � — � — � — � — � — �
Adjusted earnings (loss) from continuing operations before tax 1,733 365 466 459 443 1,236 321 314 297 304
Income tax (provision) benefit on adjusted earnings(1) (243 ) (51 ) (65 ) (64 ) (62 ) (198 ) (51 ) (50 ) (48 ) (49 )
Adjusted earnings (loss) from continuing operations(2) 1,490 � 11.00 314 � 2.38 401 � 2.96 395 � 2.90 381 � 2.79 1,038 � 7.51 270 � 1.98 264 � 1.93 249 � 1.79 255 � 1.81
Diluted shares (in millions)(3)
Weighted average shares outstanding 134.3 131.2 134.5 135.6 135.9 137.9 135.8 136.6 138.6 140.6
Incremental shares attributable to equity awards 1.1 � 0.9 � 1.0 � 0.7 � 0.5 � 0.4 � 0.5 � 0.4 � 0.4 � 0.4 �
Total diluted shares 135.4 � 132.1 � 135.5 � 136.3 � 136.4 � 138.3 � 136.3 � 137.0 � 139.0 � 141.0 �

______________________________

(1) � Calculated using adjusted effective tax rates (Table 3a) as follows:
� 2018 � Q4 '18 � Q3 '18 � Q2 '18 � Q1 '18 � 2017 � Q4 '17 � Q3 '17 � Q2 '17 � Q1 '17
(In percentages)
Adjusted effective tax rate 14 14 14 14 14 16 16 16 16 16
(2) � Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.
�

Actual Plan
Asset Returns

�

Expected
Plan Asset
Returns

(In percentages)
Q4 '18 & 2018 (3.9 ) 6.7
Q4 '17 & 2017 10.5 7.3
(3) � Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.
�
Table 3a
Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited
�
Actual
2018 � � 2017 �
(In percentages)
US GAAP annual effective tax rate 19 20
Discrete quarterly recognition of GAAP items(1) — (11 )
Tax impact of other charges and adjustments(2) — 1
Utilization of foreign tax credits — 20
Changes in valuation allowances, excluding impact of other charges and adjustments(3) (5 ) (13 )
Other(4) — � (1 )
Adjusted tax rate 14 � 16 �

______________________________

Note: As part of the year-end reconciliation, we updated the reconciliation of the GAAP effective tax rate for actual results.

(1) � Such as changes in tax laws (including US tax reform), deferred taxes on outside basis differences, changes in uncertain tax positions and prior year audit adjustments.
�
(2) Reflects the tax impact on pre-tax adjustments presented in Certain Items (Table 8), which are excluded from pre-tax income for adjusted earnings per share purposes.
�
(3) Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.
�
(4) Tax impacts related to full-year forecasted tax opportunities and related costs.
� � � � � � � � � �
Table 4
Net Sales by Segment - Unaudited
�
2018 � Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 � Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions)
Engineered Materials 2,593 622 642 664 665 2,213 580 573 546 514
Acetate Tow 649 161 158 162 168 668 157 157 163 191
Acetyl Chain 4,042 936 1,006 1,049 1,051 3,371 888 863 826 794
Other Activities(1) — — — — — — — — — —
Intersegment eliminations(2) (129 ) (30 ) (35 ) (31 ) (33 ) (112 ) (32 ) (27 ) (25 ) (28 )
Net sales 7,155 � 1,689 � 1,771 � 1,844 � 1,851 � 6,140 � 1,593 � 1,566 � 1,510 � 1,471 �

___________________________

(1) � Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).
�
(2) Includes intersegment sales primarily related to the Acetyl Chain.
� � � � �
Table 4a
Factors Affecting Segment Net Sales Sequentially - Unaudited
�
Three Months Ended December 31, 2018 Compared to Three Months Ended September 30, 2018
�
Volume Price Currency Other Total
(In percentages)
Engineered Materials (4 ) 2 (1 ) — (3 )
Acetate Tow 2 (1 ) — — 1
Acetyl Chain (3 ) (4 ) (1 ) 1 (7 )
�
Total Company (3 ) (2 ) (1 ) 1 (5 )
� � � � �

Three Months Ended September 30, 2018 Compared to Three Months Ended June�30, 2018

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials (2 ) — (1 ) — (3 )
Acetate Tow (2 ) — — — (2 )
Acetyl Chain (4 ) 2 (2 ) — (4 )
�
Total Company (3 ) 1 (2 ) — (4 )
� � � � �

Three Months Ended June 30, 2018 Compared to Three Months Ended March�31, 2018

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials (1 ) 3 (2 ) — —
Acetate Tow (3 ) — (1 ) — (4 )
Acetyl Chain (2 ) 4 (1 ) (1 ) —
�
Total Company (2 ) 3 (1 ) — —
� � � � �

Three Months Ended March�31, 2018 Compared to Three Months Ended December�31, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 10 3 2 — 15

(1)

Acetate Tow 8 — — — 8
Acetyl Chain 8 9 3 (2 ) 18
�
Total Company 9 6 2 (1 ) 16
� � � � �

Three Months Ended December�31, 2017 Compared to Three Months Ended September�30, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials (8 ) 9 — — 1
Acetate Tow 2 (2 ) — — —
Acetyl Chain (5 ) 7 — 1 3
�
Total Company (5 ) 7 — — 2
� � � � �

Three Months Ended September�30, 2017 Compared to Three Months Ended June�30, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 1 1 3 — 5
Acetate Tow (5 ) 1 — — (4 )
Acetyl Chain 1 — 3 — 4
�
Total Company — 1 3 — 4
� � � � �

Three Months Ended June 30, 2017 Compared to Three Months Ended March�31, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 4 — 2 — 6

(2)

Acetate Tow (12 ) (3 ) — — (15 )
Acetyl Chain — 5 1 (2 ) 4
�
Total Company — 3 1 (1 ) 3
� � � � �

Three Months Ended March�31, 2017 Compared to Three Months Ended December�31, 2016

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 33 — (1 ) — 32

(3)

Acetate Tow 2 (6 ) — — (4 )
Acetyl Chain 2 5 (1 ) — 6
�
Total Company 11 2 (1 ) — 12

___________________________

(1) � 2018 includes the effect of the acquisition of Omni Plastics, L.L.C.
�
(2) 2017 includes the effect of the acquisition of the nylon compounding division of Nilit Group.
�
(3) 2017 includes the effect of the SO.F.TER. S.p.A. acquisition.
� � � � �
Table 4b
Factors Affecting Segment Net Sales Year Over Year - Unaudited
�
Three Months Ended December 31, 2018 Compared to Three Months Ended December 31, 2017
�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 2 7 (2 ) — 7
Acetate Tow 5 (2 ) — — 3
Acetyl Chain (2 ) 10 (2 ) (1 ) 5
�
Total Company — 8 (2 ) — 6
� � � � �

Three Months Ended September�30, 2018 Compared to Three Months Ended September�30, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 7 6 (1 ) — 12
Acetate Tow 5 (3 ) — (1 ) 1
Acetyl Chain (3 ) 22 — (2 ) 17
�
Total Company 1 14 (1 ) (1 ) 13
� � � � �

Three Months Ended June 30, 2018 Compared to Three Months Ended June�30, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 11 7 4 — 22
Acetate Tow 1 (2 ) — — (1 )
Acetyl Chain 6 19 5 (3 ) 27
�
Total Company 7 13 4 (2 ) 22
� � � � �

Three Months Ended March�31, 2018 Compared to Three Months Ended March�31, 2017

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 19 3 7 — 29
Acetate Tow (9 ) (4 ) 1 — (12 )
Acetyl Chain 3 25 7 (3 ) 32
�
Total Company 7 14 6 (1 ) 26
� � � � �

Three Months Ended December�31, 2017 Compared to Three Months Ended December�31, 2016

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 45 — 4 — 49
Acetate Tow (14 ) (9 ) 1 1 (21 )
Acetyl Chain (2 ) 19 4 (2 ) 19
�
Total Company 10 10 3 (1 ) 22
� � � � �

Three Months Ended September�30, 2017 Compared to Three Months Ended September�30, 2016

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 45 (2 ) 2 — 45
Acetate Tow (12 ) (8 ) 1 — (19 )
Acetyl Chain — 13 2 (2 ) 13
�
Total Company 11 6 2 (1 ) 18
� � � � �

Three Months Ended June�30, 2017 Compared to Three Months Ended June 30, 2016

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 42 (2 ) (1 ) — 39
Acetate Tow (13 ) (9 ) — — (22 )
Acetyl Chain (3 ) 12 (2 ) (1 ) 6
�
Total Company 8 5 (1 ) — 12
� � � � �

Three Months Ended March�31, 2017 Compared to Three Months Ended March�31, 2016

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 43 (4 ) (2 ) — 37
Acetate Tow (6 ) (7 ) — — (13 )
Acetyl Chain (9 ) 5 (2 ) 1 (5 )
�
Total Company 5 1 (2 ) 1 5
� � � � �
Table 4c
Factors Affecting Segment Net Sales Year Over Year - Unaudited
�
Year Ended December 31, 2018 Compared to Year Ended December 31, 2017
�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 9 6 2 — 17
Acetate Tow — (3 ) — — (3 )
Acetyl Chain 1 19 2 (2 ) 20
�
Total Company 4 12 2 (1 ) 17
� � � � �

Year Ended December�31, 2017 Compared to Year Ended December�31, 2016

�
Volume Price Currency Other Total
(In percentages)
Engineered Materials 44 (2 ) 1 — 43
Acetate Tow (11 ) (8 ) — — (19 )
Acetyl Chain (4 ) 12 — — 8
�
Total Company 9 5 — — 14
� � � � � � � � � �
Table 5
Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited
�
2018 � Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 � Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions)
Net cash provided by (used in) investing activities (507 ) (98 ) (78 ) (96 ) (235 ) (549 ) (92 ) (68 ) (325 ) (64 )
Net cash provided by (used in) financing activities (1,165 ) (526 ) (383 ) (254 ) (2 ) (351 ) 145 (247 ) 21 (270 )
�
Net cash provided by (used in) operating activities 1,558 363 467 585 143 803 58 255 298 192
Capital expenditures on property, plant and equipment (337 ) (93 ) (79 ) (79 ) (86 ) (267 ) (87 ) (64 ) (54 ) (62 )
Capital (distributions to) contributions from NCI (23 ) (9 ) (6 ) (6 ) (2 ) (27 ) (9 ) (10 ) (4 ) (4 )
Free cash flow(1)(2) 1,198 � 261 � 382 � 500 � 55 � 509 � (38 ) 181 � 240 � 126 �
�
Net sales 7,155 � 1,689 � 1,771 � 1,844 � 1,851 � 6,140 � 1,593 � 1,566 � 1,510 � 1,471 �
�
Free cash flow as % of Net sales 16.7 % 15.5 % 21.6 % 27.1 % 3.0 % 8.3 % (2.4 )% 11.6 % 15.9 % 8.6 %

______________________________

(1) � Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our joint venture, Fairway Methanol LLC ("Fairway").
�
(2) Excludes required debt service and capital lease payments of $63 million and $27 million for the years ending December 31, 2018 and 2017, respectively.
� � � � � � � � � �
Table 6
Cash Dividends Received - Unaudited
�
2018 Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions)
Dividends from equity method investments 221 62 44 39 76 131 17 5 59 50
Dividends from equity investments without readily determinable fair values 117 25 26 34 32 108 26 24 29 29
Total 338 87 70 73 108 239 43 29 88 79
� � � � � � � � � �
Table 7
Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited
�
2018 Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 Q4 '17 Q3 '17 Q2 '17 Q1 '17
(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates 561 561 229 366 425 326 326 435 384 107
Long-term debt, net of unamortized deferred financing costs 2,970 � 2,970 � 3,196 � 3,228 � 3,343 � 3,315 � 3,315 � 2,954 � 2,931 � 2,851 �
Total debt 3,531 3,531 3,425 3,594 3,768 3,641 3,641 3,389 3,315 2,958
Cash and cash equivalents (439 ) (439 ) (703 ) (708 ) (490 ) (576 ) (576 ) (461 ) (511 ) (501 )
Net debt 3,092 � 3,092 � 2,722 � 2,886 � 3,278 � 3,065 � 3,065 � 2,928 � 2,804 � 2,457 �
� � � � � � � � � � �
Table 8
Certain Items - Unaudited
�

The following Certain Items attributable to Celanese Corporation are included in Net earnings (loss) and are adjustments to non-GAAP measures:

�
2018 Q4 '18 Q3 '18 Q2 '18 Q1 '18 2017 Q4 '17 Q3 '17 Q2 '17 Q1 '17 Income Statement Classification
(In $ millions)
Plant/office closures 19 16 — 3 — 58 2 2 (3 ) 57

Cost of sales / SG&A / R&D / Other charges (gains), net

Mergers and acquisitions 33 6 3 11 13 35 9 10 7 9 Cost of sales / SG&A / Other income (expense), net
Impact from natural disasters(1) — — — — — 11 — 11 — — Cost of sales
InfraServ ownership change — — — — — 8 — — 8 — Other charges (gains), net / Equity in net earnings (loss) of affiliates
Actuarial (gain) loss on pension and postretirement plans 166 166 — — — 46 46 — — — Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income
Restructuring 9 4 2 3 — 9 — 4 3 2 Cost of sales / SG&A / Other charges (gains), net / Non-operating pension and other postretirement employee benefit (expense) income
Other 1 — — 1 — — — — 3 � (3 ) (Gain) loss on disposition, net / Equity in net earnings (loss) of affiliates
Certain Items attributable to Celanese Corporation 228 192 5 18 13 167 57 27 18 � 65 �

______________________________

(1) � Primarily associated with Hurricane Harvey.
� � � � � �
Table 9
Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited
�
2018 2017

(In $ millions,
except percentages)

(In $ millions,
except percentages)

Net earnings (loss) attributable to Celanese Corporation 1,207 843
�

Adjusted EBIT (Table 1)

1,852 1,356

Adjusted effective tax rate (Table 3a)

14 % 16 %
Adjusted EBIT tax effected 1,593 1,139
�
2018 2017 Average 2017 2016 Average
(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates 561 326 444 326 118 222
Long-term debt, net of unamortized deferred financing costs 2,970 3,315 3,143 3,315 2,890 3,103
Celanese Corporation stockholders' equity 2,984 2,887 2,936 � 2,887 2,588 2,738 �
Invested capital 6,523 � 6,063 �
�
Return on invested capital (adjusted) 24.4 % 18.8 %
�
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital 18.5 % 13.9 %

Investor Relations

Chuck Kyrish

Phone: +1 972 443 4574

[email protected]

Media - U.S.

Travis Jacobsen

Phone: +1 972 443 3750

[email protected]

Media - Europe

Jens Kurth

Phone: +49(0)69 45009 1574

[email protected]

Source: Celanese Corporation

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