Celanese Corp 10-Q for FY2022 Q1

Celanese Corp (CE)

10-Q 2022-04-29 For: 2022-03-31

Added on April 12, 2026

About this 10-Q

Celanese Corp filed this 10-Q on April 29, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.54B; up 41.2% from $1.8B a year earlier
Net income: $502M; up 55.9% from net income of $322M a year earlier
Diluted EPS: $4.61; up 63.5% from $2.82 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
			March 31, 2022
			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 months ended Ma rch 31 , 202 2 and 202 1	3
	b) Unaudited Interim Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31 , 202 2 and 202 1	4
	c) Unaudited Consolidated Balance Sheets as of March 31 , 202 2 and December 31, 202 1	5
	d) Unaudited Interim Consolidated Statements of Equity for the three months ended March 31 , 202 2 and 202 1	6
	e) Unaudited Interim Consolidated Statements of Cash Flows for the three months ended March 31 , 202 2 and 202 1	7
	f) Notes to the Unaudited Interim Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		43


	Three Months Ended March 31,
	2022	2021
	(In $ millions, except share and per share data)
Net sales	2,538	1,798
Cost of sales	(1,793)	(1,313)
Gross profit	745	485
Selling, general and administrative expenses	(174)	(137)
Amortization of intangible assets	(11)	(6)
Research and development expenses	(24)	(20)
Other (charges) gains, net	(1)	6
Foreign exchange gain (loss), net	(1)	3
Gain (loss) on disposition of businesses and assets, net	(3)	(5)
Operating profit (loss)	531	326
Equity in net earnings (loss) of affiliates	56	29
Non-operating pension and other postretirement employee benefit (expense) income	24	38
Interest expense	(35)	(25)

Interest income	1	1
Dividend income - equity investments	37	42
Other income (expense), net	2	(2)
Earnings (loss) from continuing operations before tax	616	409
Income tax (provision) benefit	(112)	(85)
Earnings (loss) from continuing operations	504	324
Earnings (loss) from operation of discontinued operations	—	(1)

Income tax (provision) benefit from discontinued operations	—	—
Earnings (loss) from discontinued operations	—	(1)
Net earnings (loss)	504	323
Net (earnings) loss attributable to noncontrolling interests	(2)	(1)
Net earnings (loss) attributable to Celanese Corporation	502	322
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	502	323
Earnings (loss) from discontinued operations	—	(1)
Net earnings (loss)	502	322
Earnings (loss) per common share - basic
Continuing operations	4.64	2.85
Discontinued operations	—	(0.01)
Net earnings (loss) - basic	4.64	2.84
Earnings (loss) per common share - diluted
Continuing operations	4.61	2.83
Discontinued operations	—	(0.01)
Net earnings (loss) - diluted	4.61	2.82
Weighted average shares - basic	108,185,912	113,511,369
Weighted average shares - diluted	108,917,577	114,028,145


	As of March 31, 2022	As of December 31, 2021
	(In $ millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents	605	536
Trade receivables - third party and affiliates	1,390	1,161
Non-trade receivables, net	523	506
Inventories	1,549	1,524

Marketable securities	9	10

Other assets	124	70
Total current assets	4,200	3,807
Investments in affiliates	847	823
Property, plant and equipment (net of accumulated depreciation - 2022: $3,538; 2021: $3,484)	4,188	4,193
Operating lease right-of-use assets	267	236
Deferred income taxes	244	248
Other assets	569	521
Goodwill	1,396	1,412
Intangible assets, net	715	735
Total assets	12,426	11,975
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	860	791
Trade payables - third party and affiliates	1,169	1,160
Other liabilities	419	473

Income taxes payable	106	81
Total current liabilities	2,554	2,505
Long-term debt, net of unamortized deferred financing costs	3,132	3,176
Deferred income taxes	563	555
Uncertain tax positions	296	280
Benefit obligations	543	558
Operating lease liabilities	223	200
Other liabilities	162	164
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized (2022 and 2021: 0 issued and outstanding)	—	—
Common stock, $0.0001 par value, 400,000,000 shares authorized (2022: 170,043,630 issued and 108,307,341 outstanding; 2021: 169,760,024 issued and 108,023,735 outstanding)	—	—

Treasury stock, at cost (2022: 61,736,289 shares; 2021: 61,736,289 shares)	(5,492)	(5,492)
Additional paid-in capital	326	333
Retained earnings	10,106	9,677
Accumulated other comprehensive income (loss), net	(333)	(329)
Total Celanese Corporation stockholders' equity	4,607	4,189
Noncontrolling interests	346	348
Total equity	4,953	4,537
Total liabilities and equity	12,426	11,975


	Three Months Ended March 31,
	2022		2021
	Shares	Amount	Shares	Amount
	(In $ millions, except share data)




Common Stock
Balance as of the beginning of the period	108,023,735	—	114,168,464	—

Purchases of treasury stock	—	—	(1,831,970)	—
Stock awards	283,606	—	296,090	—
Balance as of the end of the period	108,307,341	—	112,632,584	—
Treasury Stock
Balance as of the beginning of the period	61,736,289	(5,492)	55,234,515	(4,494)
Purchases of treasury stock, including related fees	—	—	1,831,970	(250)

Balance as of the end of the period	61,736,289	(5,492)	57,066,485	(4,744)
Additional Paid-In Capital
Balance as of the beginning of the period		333		257
Stock-based compensation, net of tax		(7)		(4)

Balance as of the end of the period		326		253
Retained Earnings
Balance as of the beginning of the period		9,677		8,091

Net earnings (loss) attributable to Celanese Corporation		502		322
Common stock dividends		(73)		(78)
Balance as of the end of the period		10,106		8,335
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period		(329)		(328)
Other comprehensive income (loss), net of tax		(4)		26
Balance as of the end of the period		(333)		(302)
Total Celanese Corporation stockholders' equity		4,607		3,542
Noncontrolling Interests
Balance as of the beginning of the period		348		369
Net earnings (loss) attributable to noncontrolling interests		2		1
Distributions to noncontrolling interests		(4)		(5)
Balance as of the end of the period		346		365
Total equity		4,953		3,907


	As of March 31, 2022	As of December 31, 2021
	(In $ millions)
Finished goods	1,007	1,014
Work-in-process	85	75
Raw materials and supplies	457	435
Total	1,549	1,524


	Engineered Materials	Acetate Tow	Acetyl Chain	Total
	(In $ millions)
As of December 31, 2021	1,030	149	233	1,412
Acquisitions (Note 3)	2	—	—	2	(1)
Exchange rate changes	(13)	—	(5)	(18)
As of March 31, 2022(2)	1,019	149	228	1,396


	Licenses	Customer- Related Intangible Assets	Developed Technology	Covenants Not to Compete and Other	Total
	(In $ millions)
Gross Asset Value
As of December 31, 2021	45	996	45	55	1,141


Exchange rate changes	—	(13)	—	—	(13)
As of March 31, 2022	45	983	45	55	1,128
Accumulated Amortization
As of December 31, 2021	(41)	(543)	(42)	(39)	(665)
Amortization	—	(10)	—	(1)	(11)
Exchange rate changes	—	7	—	—	7
As of March 31, 2022	(41)	(546)	(42)	(40)	(669)
Net book value	4	437	3	15	459


			Trademarks and Trade Names
			(In $ millions)
As of December 31, 2021			259


Exchange rate changes			(3)
As of March 31, 2022			256


			As of March 31, 2022
			(In $ millions)
Revolving Credit Facility
Borrowings outstanding(1)			300

Available for borrowing(2)			1,450


	As of March 31, 2022	Total Expected 2022
	(In $ millions)
Cash contributions to defined benefit pension plans	6	24
Benefit payments to nonqualified pension plans	5	19
Benefit payments to other postretirement benefit plans	1	4


	Three Months Ended March 31,				Total From February 2008 Through March 31, 2022
	2022		2021
Shares repurchased	—		1,831,970		69,324,429
Average purchase price per share	$	—	$	136.47	$	83.71
Shares repurchased (in $ millions)	$	—	$	250	$	5,803
Aggregate Board of Directors repurchase authorizations during the period (in $ millions)	$	—	$	—	$	6,866


	Foreign Currency Translation Gain (Loss)	Gain (Loss) on Cash Flow Hedges (Note 12)	Pension and Postretirement Benefits Gain (Loss) (Note 8)	Accumulated Other Comprehensive Income (Loss), Net
	(In $ millions)
As of December 31, 2021	(271)	(43)	(15)	(329)
Other comprehensive income (loss) before reclassifications	(15)	17	2	4
Amounts reclassified from accumulated other comprehensive income (loss)	—	2	—	2
Income tax (provision) benefit	(6)	(4)	—	(10)
As of March 31, 2022	(292)	(28)	(13)	(333)


	As of March 31, 2022	As of December 31, 2021
	(In $ millions)
Long-Term Debt



Senior unsecured notes due 2022, interest rate of 4.625%	500	500
Senior unsecured notes due 2023, interest rate of 1.125%	499	509
Senior unsecured notes due 2024, interest rate of 3.500%	499	499
Senior unsecured notes due 2025, interest rate of 1.250%	332	339
Senior unsecured notes due 2026, interest rate of 1.400%	400	400
Senior unsecured notes due 2027, interest rate of 2.125%	553	564
Senior unsecured notes due 2028, interest rate of 0.625%	555	566
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)	5	6
Obligations under finance leases due at various dates through 2054	166	173
Subtotal	3,675	3,722
Unamortized debt issuance costs(2)	(18)	(19)
Current installments of long-term debt	(525)	(527)
Total	3,132	3,176


	As of March 31, 2022	As of December 31, 2021
	(In $ millions)
Derivative Assets
Gross amount recognized	69	40
Gross amount offset in the consolidated balance sheets	—	—
Net amount presented in the consolidated balance sheets	69	40
Gross amount not offset in the consolidated balance sheets	7	2
Net amount	62	38


	As of March 31, 2022	As of December 31, 2021
	(In $ millions)
Derivative Liabilities
Gross amount recognized	10	5
Gross amount offset in the consolidated balance sheets	—	—
Net amount presented in the consolidated balance sheets	10	5
Gross amount not offset in the consolidated balance sheets	7	2
Net amount	3	3


	Three Months Ended March 31,
	2022	2021
	(In $ millions)
Engineered Materials
North America	289	164
Europe and Africa	377	296
Asia-Pacific	221	164
South America	23	21
Total	910	645

Acetate Tow
North America	25	28
Europe and Africa	59	68
Asia-Pacific	40	22
South America	1	1
Total	125	119

Acetyl Chain
North America	400	281
Europe and Africa	533	310
Asia-Pacific	521	423
South America	49	20
Total(1)	1,503	1,034


	As of March 31, 2022	As of December 31, 2021
	(In € millions)
Total	1,733	1,653


	Gain (Loss) Recognized in Other Comprehensive Income (Loss)		Gain (Loss) Recognized in Earnings (Loss)
	Three Months Ended March 31,				Statement of Operations Classification
	2022	2021	2022	2021
	(In $ millions)
Designated as Cash Flow Hedges
Commodity swaps	17	11	—	—	Cost of sales
Interest rate swaps	—	33	(2)	—	Interest expense


Total	17	44	(2)	—

Designated as Net Investment Hedges
Foreign currency denominated debt (Note 7)	28	50	—	—	N/A
Cross-currency swaps	2	(6)	—	—	N/A



Total	30	44	—	—

Not Designated as Hedges

Foreign currency forwards and swaps	—	—	(1)	3	Foreign exchange gain (loss), net; Other income (expense), net
Total	—	—	(1)	3


	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 March 31, 2022
Derivatives Designated as Cash Flow Hedges
Commodity swaps	—	16	16	Current Other assets
Commodity swaps	—	32	32	Noncurrent Other assets

Derivatives Designated as Net Investment Hedges
Cross-currency swaps	—	7	7	Current Other assets
Cross-currency swaps	—	11	11	Noncurrent Other assets
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	3	3	Current Other assets
Total assets	—	69	69





Derivatives Designated as Net Investment Hedges

Cross-currency swaps	—	(7)	(7)	Current Other liabilities

Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	(3)	(3)	Current Other liabilities
Total liabilities	—	(10)	(10)


		Fair Value Measurement
	Carrying Amount	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)	Total
	(In $ millions)
As of March 31, 2022
Equity investments without readily determinable fair values	170	—	—	—
Insurance contracts in nonqualified trusts	25	25	—	25
Long-term debt, including current installments of long-term debt	3,675	3,401	166	3,567
As of December 31, 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	3,722	3,639	173	3,812


	Engineered Materials	Acetate Tow	Acetyl Chain	Other Activities	Eliminations		Consolidated
	(In $ millions)
	Three Months Ended March 31, 2022
Net sales	910	125	1,538	—	(35)	(1)	2,538
Other (charges) gains, net	(1)	—	—	—	—		(1)
Operating profit (loss)	124	4	499	(96)	—		531
Equity in net earnings (loss) of affiliates	49	—	4	3	—		56
Depreciation and amortization	46	11	45	4	—		106
Capital expenditures	30	8	62	14	—		114	(2)
	As of March 31, 2022
Goodwill and intangible assets, net	1,684	154	273	—	—		2,111
Total assets	5,576	1,109	4,504	1,237	—		12,426
	Three Months Ended March 31, 2021
Net sales	645	119	1,056	—	(22)	(1)	1,798
Other (charges) gains, net	7	—	—	(1)	—		6
Operating profit (loss)	130	16	251	(71)	—		326
Equity in net earnings (loss) of affiliates	25	—	2	2	—		29
Depreciation and amortization	35	10	41	4	—		90
Capital expenditures	23	11	33	6	—		73	(2)
	As of December 31, 2021
Goodwill and intangible assets, net	1,714	154	279	—	—		2,147
Total assets	5,363	1,098	4,428	1,086	—		11,975


	As of March 31, 2022	As of December 31, 2021
	(unaudited)
	(In $ millions)
Balance Sheet Data
Cash and cash equivalents	605	536

Short-term borrowings and current installments of long-term debt - third party and affiliates	860	791
Long-term debt, net of unamortized deferred financing costs	3,132	3,176
Total debt	3,992	3,967


	Volume	Price	Currency	Other	Total
	(unaudited)
	(In percentages)
Engineered Materials	20	25	(4)	—	41
Acetate Tow	1	4	—	—	5
Acetyl Chain	8	39	(1)	—	46
Total Company	12	32	(2)	(1)	41


	Three Months Ended March 31,				Change	% Change
	2022		2021
	(unaudited)
	(In $ millions, except percentages)
Net sales	910		645		265	41.1	%
Net Sales Variance
Volume	20	%
Price	25	%
Currency	(4)	%
Other	—	%

Operating profit (loss)	124		130		(6)	(4.6)	%
Operating margin	13.6	%	20.2	%
Equity in net earnings (loss) of affiliates	49		25		24	96.0	%

Depreciation and amortization	46		35		11	31.4	%


			Three Months Ended March 31, 2022
			(In $ millions)
			(unaudited)
Net sales to third parties			481
Net sales to non-guarantor subsidiaries			227
Total net sales			708
Gross profit			97
Earnings (loss) from continuing operations			(105)
Net earnings (loss)			(105)
Net earnings (loss) attributable to the Obligor Group			(105)


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)
January 1 - 31, 2022	—	$	—	—	$	1,063,000,000
February 1 - 28, 2022	—	$	—	—	$	1,063,000,000
March 1 - 31, 2022	—	$	—	—	$	1,063,000,000
Total	—			—


Exhibit Number
						Description

2.1						Transaction Agreement, dated as of February 17, 2022, by and among DuPont De Nemours, Inc., DuPont E&I Holding, Inc. and Celanese Corporation (incorporated by r eference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on Febru ary 18, 2022).

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).

10.1						Commitment Letter, dated as of February 17, 2022, by and among Celanese Corporation, Bank of America, N.A. and BofA Securities, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on February 18, 2022).

10.2†						Credit Agreement, dated as of March 18, 2022, by and among Celanese Corporation, Celanese US Holdings LLC, Celanese Europe B.V., certain subsidiaries of Celanese US Holdings LLC from time to time party thereto as borrowers, each lender from time to time party thereto, Bank of America, N.A., as Administrative Agent, a Swing Line Lender and an L/C Issuer and other Swing Line Lenders and L/C Issuers party thereto (incorporated by reference to Exh i bit 10.1 to the Current Report on Form 8-K filed with the SEC on March 24, 2022).

10.3†						Term Loan Credit Agreement, dated as of March 18, 2022, by and among Celanese Corporation, Celanese US Holdings LLC, each lender from time to time party thereto, Bank of America, N.A., as Administrative Agent, a Swing Line Lender and an L/C Issuer and other Swing Line Lenders and L/C Issuers party thereto (incorporated by reference to Exh i bit 10.2 to the Current Report on Form 8-K filed with the SEC on March 24, 2022).

10.4*‡						Form of 202 2 Performance-Based Restricted Stock Unit Award Agreement.

10.5*‡						Form of 2022 Performance-Based Restricted Stock Unit Award Agreement for Chi ef Executive Officer .

10.6*‡						Form of 202 2 Time-Based Restricted Stock Unit Award Agreement.

10.7*‡						Form of 2022 Time-Based Restricted Stock Unit Award Agreement for Chi ef Execu tiv e Officer .

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.

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

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104						The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 has been formatted in Inline XBRL.