Celanese Corp 10-Q for FY2021 Q3

Celanese Corp (CE)

10-Q 2021-10-22 For: 2021-09-30

Added on April 12, 2026

About this 10-Q

Celanese Corp filed this 10-Q on October 22, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.27B; up 60.6% from $1.41B a year earlier
Net income: $506M; up 144.4% from net income of $207M a year earlier
Diluted EPS: $4.56; up 160.6% from $1.75 a year earlier

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☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended
			September 30, 2021
			Or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Delaware			98-0420726
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share	CE	The New York Stock Exchange
1.125% Senior Notes due 2023	CE /23	The New York Stock Exchange
1.250% Senior Notes due 2025	CE /25	The New York Stock Exchange
2.125% Senior Notes due 2027	CE /27	The New York Stock Exchange
0.625% Senior Notes due 2028	CE /28	The New York Stock Exchange


		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	a) Unaudited Interim Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	3
	b) Unaudited Interim Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020	4
	c) Unaudited Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	5
	d) Unaudited Interim Consolidated Statements of Equity for the three and nine months ended September 30, 2021 and 2020	6
	e) Unaudited Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	8
	f) Notes to the Unaudited Interim Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	49

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51
Signatures		52


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
	(In $ millions, except share and per share data)
Net sales	2,266	1,411	6,262	4,064
Cost of sales	(1,551)	(1,084)	(4,301)	(3,147)
Gross profit	715	327	1,961	917
Selling, general and administrative expenses	(165)	(106)	(463)	(345)
Amortization of intangible assets	(6)	(6)	(17)	(17)
Research and development expenses	(21)	(19)	(63)	(54)
Other (charges) gains, net	—	(10)	3	(37)
Foreign exchange gain (loss), net	2	(2)	2	(2)
Gain (loss) on disposition of businesses and assets, net	11	—	6	(1)
Operating profit (loss)	536	184	1,429	461
Equity in net earnings (loss) of affiliates	44	25	110	113
Non-operating pension and other postretirement employee benefit (expense) income	37	28	113	83
Interest expense	(21)	(28)	(70)	(83)
Refinancing expense	(9)	—	(9)	—
Interest income	2	1	7	4
Dividend income - equity investments	35	29	114	98
Other income (expense), net	(2)	2	(3)	4
Earnings (loss) from continuing operations before tax	622	241	1,691	680
Income tax (provision) benefit	(102)	(30)	(303)	(130)
Earnings (loss) from continuing operations	520	211	1,388	550
Earnings (loss) from operation of discontinued operations	(17)	(2)	(24)	(13)

Income tax (provision) benefit from discontinued operations	4	—	6	1
Earnings (loss) from discontinued operations	(13)	(2)	(18)	(12)
Net earnings (loss)	507	209	1,370	538
Net (earnings) loss attributable to noncontrolling interests	(1)	(2)	(4)	(6)
Net earnings (loss) attributable to Celanese Corporation	506	207	1,366	532
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	519	209	1,384	544
Earnings (loss) from discontinued operations	(13)	(2)	(18)	(12)
Net earnings (loss)	506	207	1,366	532
Earnings (loss) per common share - basic
Continuing operations	4.70	1.77	12.35	4.59
Discontinued operations	(0.12)	(0.02)	(0.16)	(0.10)
Net earnings (loss) - basic	4.58	1.75	12.19	4.49
Earnings (loss) per common share - diluted
Continuing operations	4.67	1.76	12.28	4.57
Discontinued operations	(0.11)	(0.01)	(0.16)	(0.10)
Net earnings (loss) - diluted	4.56	1.75	12.12	4.47
Weighted average shares - basic	110,532,051	118,045,476	112,101,651	118,543,853
Weighted average shares - diluted	111,044,558	118,564,820	112,699,297	119,119,203


	As of September 30, 2021	As of December 31, 2020
	(In $ millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents	1,340	955
Trade receivables - third party and affiliates	1,172	792
Non-trade receivables, net	566	450
Inventories	1,159	978

Marketable securities	28	533

Other assets	90	55
Total current assets	4,355	3,763
Investments in affiliates	842	820
Property, plant and equipment (net of accumulated depreciation - 2021: $3,424; 2020: $3,279)	3,924	3,939
Operating lease right-of-use assets	231	232
Deferred income taxes	254	259
Other assets	543	411
Goodwill	1,131	1,166
Intangible assets, net	303	319
Total assets	11,583	10,909
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	103	496
Trade payables - third party and affiliates	1,042	797
Other liabilities	529	680

Income taxes payable	138	—
Total current liabilities	1,812	1,973
Long-term debt, net of unamortized deferred financing costs	3,724	3,227
Deferred income taxes	537	509
Uncertain tax positions	272	240
Benefit obligations	592	643
Operating lease liabilities	197	208
Other liabilities	178	214
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized (2021 and 2020: 0 issued and outstanding)	—	—
Common stock, $0.0001 par value, 400,000,000 shares authorized (2021: 169,720,379 issued and 109,180,323 outstanding; 2020: 169,402,979 issued and 114,168,464 outstanding)	—	—

Treasury stock, at cost (2021: 60,540,056 shares; 2020: 55,234,515 shares)	(5,293)	(4,494)
Additional paid-in capital	313	257
Retained earnings	9,227	8,091
Accumulated other comprehensive income (loss), net	(328)	(328)
Total Celanese Corporation stockholders' equity	3,919	3,526
Noncontrolling interests	352	369
Total equity	4,271	3,895
Total liabilities and equity	11,583	10,909


	Three Months Ended September 30,
	2021		2020
	Shares	Amount	Shares	Amount
	(In $ millions, except share data)




Common Stock
Balance as of the beginning of the period	111,115,442	—	118,288,296	—

Purchases of treasury stock	(1,938,179)	—	(1,060,890)	—
Stock awards	3,060	—	2,383	—
Balance as of the end of the period	109,180,323	—	117,229,789	—
Treasury Stock
Balance as of the beginning of the period	58,601,877	(4,993)	51,083,026	(3,995)
Purchases of treasury stock, including related fees	1,938,179	(300)	1,060,890	(111)

Balance as of the end of the period	60,540,056	(5,293)	52,143,916	(4,106)
Additional Paid-In Capital
Balance as of the beginning of the period		292		252
Stock-based compensation, net of tax		21		(4)

Balance as of the end of the period		313		248
Retained Earnings
Balance as of the beginning of the period		8,797		6,576

Net earnings (loss) attributable to Celanese Corporation		506		207
Common stock dividends		(76)		(73)
Balance as of the end of the period		9,227		6,710
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period		(298)		(346)
Other comprehensive income (loss), net of tax		(30)		2
Balance as of the end of the period		(328)		(344)
Total Celanese Corporation stockholders' equity		3,919		2,508
Noncontrolling Interests
Balance as of the beginning of the period		359		382
Net earnings (loss) attributable to noncontrolling interests		1		2
Distributions to noncontrolling interests		(8)		(8)
Balance as of the end of the period		352		376
Total equity		4,271		2,884


	Nine Months Ended September 30,
	2021		2020
	Shares	Amount	Shares	Amount
	(In $ millions, except share data)




Common Stock
Balance as of the beginning of the period	114,168,464	—	119,555,207	—

Purchases of treasury stock	(5,332,727)	—	(2,770,321)	—
Stock awards	344,586	—	444,903	—
Balance as of the end of the period	109,180,323	—	117,229,789	—
Treasury Stock
Balance as of the beginning of the period	55,234,515	(4,494)	49,417,965	(3,846)
Purchases of treasury stock, including related fees	5,332,727	(800)	2,770,321	(261)
Issuance of treasury stock under stock plans	(27,186)	1	(44,370)	1
Balance as of the end of the period	60,540,056	(5,293)	52,143,916	(4,106)
Additional Paid-In Capital
Balance as of the beginning of the period		257		254
Stock-based compensation, net of tax		56		(6)

Balance as of the end of the period		313		248
Retained Earnings
Balance as of the beginning of the period		8,091		6,399

Net earnings (loss) attributable to Celanese Corporation		1,366		532
Common stock dividends		(230)		(221)
Balance as of the end of the period		9,227		6,710
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period		(328)		(300)
Other comprehensive income (loss), net of tax		—		(44)
Balance as of the end of the period		(328)		(344)
Total Celanese Corporation stockholders' equity		3,919		2,508
Noncontrolling Interests
Balance as of the beginning of the period		369		391
Net earnings (loss) attributable to noncontrolling interests		4		6
Distributions to noncontrolling interests		(21)		(21)
Balance as of the end of the period		352		376
Total equity		4,271		2,884


			Nine Months Ended September 30, 2021
			(In $ millions)


Accelerated depreciation expense			5
Plant/office closures(1)			(9)


Total			(4)


	Engineered Materials	Acetate Tow	Acetyl Chain	Total
	(In $ millions)
As of December 31, 2020	768	149	249	1,166
Acquisitions	4	—	2	6
Exchange rate changes	(28)	—	(13)	(41)
As of September 30, 2021(1)	744	149	238	1,131


	Licenses	Customer- Related Intangible Assets	Developed Technology	Covenants Not to Compete and Other	Total
	(In $ millions)
Gross Asset Value
As of December 31, 2020	44	724	45	56	869
Acquisitions	—	8	—	—	8

Exchange rate changes	—	(26)	(1)	—	(27)
As of September 30, 2021	44	706	44	56	850
Accumulated Amortization
As of December 31, 2020	(38)	(555)	(40)	(39)	(672)
Amortization	(1)	(13)	(2)	(1)	(17)
Exchange rate changes	—	23	1	—	24
As of September 30, 2021	(39)	(545)	(41)	(40)	(665)
Net book value	5	161	3	16	185


			Trademarks and Trade Names
			(In $ millions)
As of December 31, 2020			122


Exchange rate changes			(4)
As of September 30, 2021			118


			As of September 30, 2021
			(In $ millions)
Revolving Credit Facility
Borrowings outstanding(1)			—

Available for borrowing(2)			1,250


	As of September 30, 2021	Total Expected 2021
	(In $ millions)
Cash contributions to defined benefit pension plans	17	23
Benefit payments to nonqualified pension plans	16	20
Benefit payments to other postretirement benefit plans	3	4
Cash contributions to German multiemployer defined benefit pension plans(1)	6	9


	Nine Months Ended September 30,				Total From February 2008 Through September 30, 2021
	2021		2020
Shares repurchased	5,332,727		2,770,321		68,100,778
Average purchase price per share	$	150.02	$	94.44	$	82.27
Shares repurchased (in $ millions)	$	800	$	261	$	5,603
Aggregate Board of Directors repurchase authorizations during the period (in $ millions)	$	1,000	$	500	$	6,866


	As of September 30, 2021	As of December 31, 2020
	(In $ millions)
Asset retirement obligations	12	10
Benefit obligations (Note 9)	27	27
Customer rebates	72	53
Derivatives (Note 14)	9	87
Environmental (Note 10)	14	11
Insurance	6	5
Interest	22	29
Legal (Note 16)	33	107
Operating leases	35	36
Restructuring (Note 12)	8	11
Salaries and benefits	139	121
Sales and use tax/foreign withholding tax payable	110	140
Other	42	43
Total	529	680


	As of September 30, 2021	As of December 31, 2020
	(In $ millions)
Long-Term Debt


Senior unsecured notes due 2021, interest rate of 5.875%	—	400
Senior unsecured notes due 2022, interest rate of 4.625%	500	500
Senior unsecured notes due 2023, interest rate of 1.125%	521	919
Senior unsecured notes due 2024, interest rate of 3.500%	499	499
Senior unsecured notes due 2025, interest rate of 1.250%	347	368
Senior unsecured notes due 2026, interest rate of 1.400%	400	—
Senior unsecured notes due 2027, interest rate of 2.125%	576	610
Senior unsecured notes due 2028, interest rate of 0.625%	578	—
Pollution control and industrial revenue bonds due at various dates through 2030, interest rates ranging from 4.05% to 5.00%	166	166

Bank loans due at various dates through 2026(1)	6	8
Obligations under finance leases due at various dates through 2054	179	201
Subtotal	3,772	3,671
Unamortized debt issuance costs(2)	(20)	(13)
Current installments of long-term debt	(28)	(431)
Total	3,724	3,227


	As of September 30, 2021	As of December 31, 2020
	(In $ millions)
Demerger obligations (Note 16)	24	29
Divestiture obligations (Note 16)	13	15
Active sites	8	12
U.S. Superfund sites	12	11
Other environmental remediation liabilities	2	2
Total	59	69


	Foreign Currency Translation Gain (Loss)	Gain (Loss) on Cash Flow Hedges (Note 14)	Pension and Postretirement Benefits Gain (Loss) (Note 9)	Accumulated Other Comprehensive Income (Loss), Net
	(In $ millions)
As of December 31, 2020	(260)	(56)	(12)	(328)
Other comprehensive income (loss) before reclassifications	3	43	(4)	42
Amounts reclassified from accumulated other comprehensive income (loss)	—	(2)	—	(2)
Income tax (provision) benefit	(15)	(25)	—	(40)
As of September 30, 2021	(272)	(40)	(16)	(328)


	As of September 30, 2021	As of December 31, 2020
	(In € millions)
Total	1,837	1,358


	Gain (Loss) Recognized in Other Comprehensive Income (Loss)		Gain (Loss) Recognized in Earnings (Loss)
	Three Months Ended September 30,				Statement of Operations Classification
	2021	2020	2021	2020
	(In $ millions)
Designated as Cash Flow Hedges
Commodity swaps	10	1	(1)	(5)	Cost of sales
Interest rate swaps	(7)	3	(1)	—	Interest expense


Total	3	4	(2)	(5)

Designated as Net Investment Hedges
Foreign currency denominated debt (Note 8)	37	(54)	—	—	N/A
Cross-currency swaps	10	(25)	—	—	N/A



Total	47	(79)	—	—

Not Designated as Hedges

Foreign currency forwards and swaps	—	—	(2)	(11)	Foreign exchange gain (loss), net; Other income (expense), net
Total	—	—	(2)	(11)


	Fair Value Measurement
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Total	Balance Sheet Classification
	(In $ millions)
As of September 30, 2021
Derivatives Designated as Cash Flow Hedges
Commodity swaps	—	15	15	Current Other assets
Commodity swaps	—	24	24	Noncurrent Other assets

Derivatives Designated as Net Investment Hedges
Cross-currency swaps	—	14	14	Current Other assets

Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	5	5	Current Other assets
Total assets	—	58	58





Derivatives Designated as Net Investment Hedges

Cross-currency swaps	—	(2)	(2)	Current Other liabilities
Cross-currency swaps	—	(9)	(9)	Noncurrent Other liabilities
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	(7)	(7)	Current Other liabilities
Total liabilities	—	(18)	(18)


		Fair Value Measurement
	Carrying Amount	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)	Total
	(In $ millions)
As of September 30, 2021
Equity investments without readily determinable fair values	170	—	—	—
Insurance contracts in nonqualified trusts	28	28	—	28
Long-term debt, including current installments of long-term debt	3,772	3,731	179	3,910
As of December 31, 2020
Equity investments without readily determinable fair values	171	—	—	—
Insurance contracts in nonqualified trusts	30	31	—	31
Long-term debt, including current installments of long-term debt	3,671	3,644	201	3,845


	Engineered Materials	Acetate Tow	Acetyl Chain	Other Activities	Eliminations		Consolidated
	(In $ millions)
	Three Months Ended September 30, 2021
Net sales	684	128	1,489	—	(35)	(1)	2,266
Other (charges) gains, net (Note 12)	—	—	1	(1)	—		—
Operating profit (loss)	91	12	517	(84)	—		536
Equity in net earnings (loss) of affiliates	39	—	1	4	—		44
Depreciation and amortization	35	10	44	4	—		93
Capital expenditures	36	10	73	4	—		123	(2)
	Three Months Ended September 30, 2020
Net sales	526	129	776	—	(20)	(1)	1,411
Other (charges) gains, net (Note 12)	(10)	—	1	(1)	—		(10)
Operating profit (loss)	84	30	121	(51)	—		184
Equity in net earnings (loss) of affiliates	21	—	2	2	—		25
Depreciation and amortization	34	9	41	5	—		89
Capital expenditures	21	10	37	8	—		76	(2)


	As of September 30, 2021	As of December 31, 2020
	(unaudited)
	(In $ millions)
Balance Sheet Data
Cash and cash equivalents	1,340	955

Short-term borrowings and current installments of long-term debt - third party and affiliates	103	496
Long-term debt, net of unamortized deferred financing costs	3,724	3,227
Total debt	3,827	3,723


	Volume	Price	Currency	Other	Total
	(unaudited)
	(In percentages)
Engineered Materials	11	17	2	—	30
Acetate Tow	—	(2)	—	1	(1)
Acetyl Chain	11	80	1	—	92
Total Company	10	50	1	—	61


	Three Months Ended September 30,				Change	% Change		Nine Months Ended September 30,				Change	% Change
	2021		2020					2021		2020
	(unaudited)
	(In $ millions, except percentages)
Net sales	684		526		158	30.0	%	2,011		1,509		502	33.3	%
Net Sales Variance
Volume	11	%						18	%
Price	17	%						10	%
Currency	2	%						5	%
Other	—	%						—	%
Other (charges) gains, net	—		(10)		10	100.0	%	6		(35)		41	117.1	%
Operating profit (loss)	91		84		7	8.3	%	344		173		171	98.8	%
Operating margin	13.3	%	16.0	%				17.1	%	11.5	%
Equity in net earnings (loss) of affiliates	39		21		18	85.7	%	96		100		(4)	(4.0)	%

Depreciation and amortization	35		34		1	2.9	%	105		100		5	5.0	%


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares Remaining that may be Purchased Under the Program(2)
	(unaudited)
July 1 - 31, 2021	96,594	$	155.96	96,594	$	1,548,000,000
August 1 - 31, 2021	922,143	$	157.36	922,143	$	1,403,000,000
September 1 - 30, 2021	919,442	$	152.09	919,442	$	1,263,000,000
Total	1,938,179			1,938,179


Exhibit Number
						Description

3.1						Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed with the SEC on October 18, 2016).

3.1(a)						Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese Corporation dated as of April 21, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on April 22, 2016).

3.1(b)						Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese Corporation dated as of September 17, 2018 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on September 17, 2018).

3.1(c)						Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese Corporation dated April 18, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on April 23, 2019).

3.2						Sixth Amended and Restated By-laws, amended effective July 15, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 18, 2019).

4.1						Tenth Supplemental Indenture, dated as of August 5, 2021, among Celanese US Holdings LLC, Celanese Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on August 5, 2021).

4.2						Eleventh Supplemental Indenture, dated as of September 10, 2021, among Celanese US Holdings LLC, Celanese Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on September 10, 2021).

22.1*						List of Guarantor Subsidiaries.

31.1*						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*						Inline XBRL Taxonomy Extension Schema Document.

101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 has been formatted in Inline XBRL.