1. Celanese 2Q 2006 Earnings
Conference Call / Webcast
Tuesday, August 1, 2006 10:00 a.m. CT
Dave Weidman, President and CEO
John J. Gallagher III, Executive Vice President and CFO
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2. Forward Looking Statements, Reconciliation and Use of Non-GAAP Measures
to U.S. GAAP
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. When used in this
release, the words “outlook,” “forecast,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such
words or similar expressions are intended to identify forward-looking statements. 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 forward-looking statements contained in
this release. Numerous factors, many of which are beyond the company’s control, could cause actual results to differ materially from those
expressed as forward-looking statements. Certain of these risk factors are discussed 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.
This release reflects three performance measures, operating EBITDA, adjusted earnings per share and net debt as non-U.S. GAAP measures. The
most directly comparable financial measure presented in accordance with U.S. GAAP in our consolidated financial statements for operating
EBITDA is operating profit; for adjusted earnings per share is earnings per common share-diluted; and for net debt is total debt.
Use of Non-U.S. GAAP Financial Information
Operating EBITDA, a measure used by management to measure performance, is defined as operating profit from continuing operations,
plus equity in net earnings from affiliates, other income and depreciation and amortization, and further adjusted for special charges and
other adjustments. Our management believes operating EBITDA is useful to investors because it is one of the primary measures our
management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. Operating
EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to operating profit as a measure of
operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical
calculations, this presentation of operating EBITDA may not be comparable to other similarly titled measures of other companies.
Additionally, operating EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not
consider certain cash requirements such as interest payments, tax payments and debt service requirements nor does it represent the
amount used in our debt covenants.
Adjusted earnings per share is a measure used by management to measure performance. It is defined as net earnings (loss) available to
common shareholders plus preferred dividends, adjusted for special charges and other adjustments, and divided by the number of basic
common shares, diluted preferred shares, and options valued using the treasury method. We believe that the presentation of this non-
U.S. GAAP measure provides useful information to management and investors regarding various financial and business trends relating
to our financial condition and results of operations, and that when U.S. GAAP information is viewed in conjunction with non-U.S.
GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-
U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information.
Net debt is defined as total debt less cash and cash equivalents. We believe that the presentation of this non-U.S. GAAP measure
provides useful information to management and investors regarding changes to the company’s capital structure. Our management and
credit analysts use net debt to evaluate the company's capital structure and assess credit quality. This non-U.S. GAAP information is
not intended to be considered in isolation or as a substitute for U.S. GAAP financial information.
2
4. Celanese Corporation Q2 2006
Highlights
in $ millions (except EPS) 2nd Qtr 2006 2nd Qtr 2005
Net Sales 1,674 1,506
Diluted Adjusted EPS* 0.71 0.53
Operating EBITDA 308 262
Net sales increase 11% from prior year
Operating profit rises 7% on strong business performance,
fewer special charges and cost improvement
Diluted adjusted EPS up 34% to $0.71
Operating EBITDA increases 18% to $308 million driven
by strong affiliate performance
* Based on diluted shares of 172.1 million as of June 30, 2006, and a 28% effective tax rate
4
5. John J. Gallagher III
Executive Vice President and
Chief Financial Officer
5
6. Celanese Corporation Financial Highlights
in $ millions (except EPS) 2nd Qtr 2006 2nd Qtr 2005
Net Sales 1,674 1,506
SG&A (153) (135)
Operating Profit 163 152
Net Earnings 103 67
Special Items
Special Charges (12) (27)
Other Adjustments (13) 14
Diluted Adjusted EPS* $0.71 0.53
Operating EBITDA 308 262
* Based on diluted shares of 172.1 million as of June 30, 2006, and a 28% effective tax rate
6
7. Chemical Products
2nd Qtr 2006
in $ millions
Net Sales $1,194 up 10%
Operating EBITDA $206 up 8%
Second Quarter 2006:
Strong earnings on continued high utilization across industry,
inclusion of sales from Acetex acquisition
Some margin compression in basic chemicals acetyl
derivatives
Higher dividends from Saudi cost investment (IBN Sina)
Strong integrated chain of acetyl products
7
8. Ticona Technical Polymers
2nd Qtr 2006
in $ millions
Net Sales $230 up 3%
Operating EBITDA $67 up 22%
Second Quarter 2006:
Operating margins expanded on increased sales and reduced
spending
Increased penetration in key customer segments
Improved demand in European market
Raw materials continue to be volatile
Focus on increased growth through innovation
8
9. Acetate Products
2nd Qtr 2006
in $ millions
Net Sales $176 up 2%
Operating EBITDA $55 up 162%
Revitalization still on track
Lower volumes on reduced tow sales to China offset by higher pricing
Received $21 million dividends from China affiliate
Performance Products
2nd Qtr 2006
in $ millions
Net Sales $48 up 2%
Operating EBITDA $21 up 17%
Stable earnings on continued strong sweetener demand
Pricing declines consistent with strategy of sales to large-volume customers
Attractive, cash generating businesses
9
11. Hidden Value through Equity Affiliates
Cash and Proportional EBITDA of Equity Affiliates
in $ millions
160
140
Not included in
120
Operating EBITDA
Proportional EBITDA
100
Total proportional
above Earnings EBITDA from
80
(Hidden Value) Equity Affiliates
60
Included in
40
Operating EBITDA
Net Earnings
20
Equity Affiliates
0
2003 2004 2005 2006 2007
Total proportional EBITDA not properly reflected
1111
12. Capitalization
(in $millions)
Dec 31, June 30,
Mar 31,
2005 2006
2006
312
390 354
Cash
1,712
1,708 1,718
Senior Credit Term Loan
- - -
Senior Credit Revolver
-
- -
Floating Rate Term Loan
1,712
1,708 1,718
Total Senior Debt
800
800 800
Senior Sub Notes ($)
157
153 165
Senior Sub Notes (€*)
460
397 412
Other Debt
3,129
3,058 3,095
Total Cash Pay Debt
75
73 77
Discount Notes Series A
314
306 322
Discount Notes Series B
3,518
3,437 3,494
Total Debt
308
235 418
Shareholders' Equity
3,826
3,672 3,912
Total Capitalization
3,206
3,047 3,140
Net Debt(Total Debt Less Cash)
12
* Translated at 1.2713 - effective date June 30, 2006
13. 2006 Business Outlook
Favorable industry dynamics
Chemical
Products Continued strong global demand
2006 Adjusted
Increasing penetration in key customer EPS Guidance
segments
$2.50 to $2.80
Ticona
Improved global demand
Positive impact of COC sale
• Strong performance
Improving earnings with progress on from operations
Acetate restructuring
• Acid expansions to
Products
On path to improved profitability levels be absorbed
throughout the year
Strong performance on demand growth
Performance
Moving toward specialty-chemical
Products
performance seasonally stronger 1st half
13
14. 2006 Guidance
Adjusted EPS: $2.50 to $2.80
Depreciation/Amortization
• $275 - $300 million
Cash Interest Expense
• $230 - $250 million
Tax Rate
• 28%
Capital Expenditures
• $200 - $250 million
CE Equity
• 158.6 million shares common stock outstanding
• 1.5 million stock option grants*
• 12 million shares convertible preferred
* Based on total of 11 million stock option grants valued using the Treasury Method as of June 30, 2006.
14
16. Reg G: Reconciliation of Diluted Adjusted EPS
Table 6
Adjusted Earnings Per Share - Reconciliation of a Non-U.S. GAAP Measure
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions, except per share data) 2006 2005 2006 2005
Earnings from continuing operations
123 136
before tax and minority interests 146 307
Non-GAAP Adjustments:
Special charges and other adjustments * 13 61
25 35
Refinancing costs - 102
- -
Adjusted earnings from continuing operations
136 299
before tax and minority interests 171 342
Income tax provision on adjusted earnings ** (33) (74)
(48) (96)
Minority interests (13) (38)
(1) (1)
Earnings from discontinued operations, net of tax - 10
- 1
Preferred dividends (2) (4)
(2) (5)
88 193
Adjusted net earnings available to common shareholders 120 241
Add back: Preferred dividends 2 4
2 5
Adjusted net earnings for diluted adjusted EPS 122 90 246 197
Diluted shares (millions)
Weighted average shares outstanding 158.5 150.2
158.6 158.6
Assumed conversion of Preferred Shares 12.0 12.0
12.0 12.0
Assumed conversion of stock options - 0.1
1.5 1.4
Total diluted shares 170.5 162.3
172.1 172.0
Adjusted EPS from continuing operations 0.71 0.53 1.42 1.15
Earnings per common share from discontinued operations 0.06
- - 0.01
Adjusted EPS 0.71 0.53 1.43 1.21
* See Table 7 fo r details
** The U.S. GA A P tax rate fo r the three and six mo nths ended June 30, 2006 is 29%. The co mpany is using the 28% rate reflective o f the o riginal
guidance in Q12006.
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17. Reg G: Reconciliation of Net Debt
Table 5
Net Debt - Reconcilation of a Non-U.S. GAAP Measure
June 30, December 31,
(in $ millions) 2006 2005
Short-term borrowings and current
installments of long-term debt - third party and affiliates 155
174
Plus: Long-term debt 3,282
3,320
Total debt 3,494 3,437
Less: Cash and cash equivalents 390
354
Net Debt 3,140 3,047
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18. Reg G: Reconciliation of Special Charges
Table 7
Reconciliation of Special Charges to Total Special Charges and Other
Adjustments
Special Charges:
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions) 2006 2005 2006 2005
Employee termination benefits 6 8
9 11
Plant/office closures 1 2
2 -
7 10
Total restructuring 11 11
Asset impairments 24 24
- -
Insurance recoveries associated with plumbing cases (4) (4)
(2) (3)
Other 35 *
3 - 4
Total 12 27 12 65
Other Adjustments: **
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions) 2006 2005 2006 2005
Executive severance & legal costs related
to Squeeze-Out - -
13 23
Favorable impact on non-operating foreign
exchange position (14) (14)
- -
Advisor monitoring fee - 10
- -
13 23
Total (14) (4)
25 13 35 61
Total special charges and other adjustments
* Termination of advisor monitoring fee
** These items are included in net earnings (loss) but not included in special charges.
18
19. Table 1
Segment Data and Reconciliation of Operating Profit (Loss) to Operating EBITDA -
a Non-U.S. GAAP Measure. *
Three Months Ended Six Months Ended
June 30, June 30,
(in $ millions) 2006 2005 2006 2005
Net Sales
Chemical Products 1,085 2,129
1,194 2,363
Technical Polymers Ticona 223 462
230 461
Acetate Products 172 337
176 343
Performance Products 47 94
48 97
Other Activities 8 20
68 129
Intersegment eliminations (29) (58)
(42) (67)
Total 1,674 1,506 3,326 2,984
Operating Profit (Loss)
Chemical Products 155 332
141 303
Technical Polymers Ticona 5 44
38 79
Acetate Products 10 20
29 52
Performance Products 15 28
16 33
Other Activities (33) (116)
(61) (107)
Total 163 152 360 308
Equity Earnings and Other Income/(Expense) **
Chemical Products (6) 8
16 25
Technical Polymers Ticona 16 28
15 29
Acetate Products 2 2
21 21
Performance Products - -
1 1
Other Activities (6) 18 (2) 10
Total 47 30 74 48
Special Charges and Other Adjustments ***
Chemical Products 3 4
8 7
Technical Polymers Ticona 20 21
(2) (4)
Acetate Products - 1
- -
Performance Products - -
- -
Other Activities (10) 35
19 32
Total 25 13 35 61
Depreciation and Amortization Expense
Chemical Products 39 73
41 79
Technical Polymers Ticona 14 29
16 32
Acetate Products 9 18
5 12
Performance Products 3 6
4 8
Other Activities 2 4
7 12
Total 73 67 143 130
Reg G: Reconciliation of Operating EBITDA
Operating EBITDA
Chemical Products 191 417
206 414
Technical Polymers Ticona 55 122
67 136
Acetate Products 21 41
55 85
Performance Products 18 34
21 42
Other Activities (23)
(41) (65) (67)
Total 308 262 612 547
* Other Activities primarily includes corporate selling, general and administrative expenses
and the results from AT Plastics and captive insurance companies.
** Includes equity earnings from affiliates and other income/(expense), which is primarily dividends
from cost investments.
*** Excludes adjustments to minority interest, net interest, taxes, depreciation and amortization.
19
20. 2005 Operating EBITDA by
Segment
in $ millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year
Chemical Products 226 191 198 197 812
Technical Polymers 67 55 50 32 204
Ticona
Acetate Products 20 21 17 28 86
Performance 16 18 17 13 64
Products
Other Activities (44) (24) (32) (13) (113)
Total 285 261 250 257 1,053
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