Celanese Corp 10-Q for FY2021 Q1

Celanese Corp (CE)

10-Q 2021-04-23 For: 2021-03-31

Added on April 12, 2026

About this 10-Q

Celanese Corp filed this 10-Q on April 23, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.8B; up 23.2% from $1.46B a year earlier
Net income: $322M; up 47.7% from net income of $218M a year earlier
Diluted EPS: $2.82; up 54.9% from $1.82 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, 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


		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	a) Unaudited Interim Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	3
	b) Unaudited Interim Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020	4
	c) Unaudited Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	5
	d) Unaudited Interim Consolidated Statements of Equity for the three months ended March 31, 2021 and 2020	6
	e) Unaudited Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	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	40
Item 4.	Controls and Procedures	40

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
Signatures		44


	Three Months Ended March 31,
	2021	2020
	(In $ millions, except share and per share data)
Net sales	1,798	1,460
Cost of sales	(1,313)	(1,112)
Gross profit	485	348
Selling, general and administrative expenses	(137)	(125)
Amortization of intangible assets	(6)	(5)
Research and development expenses	(20)	(17)
Other (charges) gains, net	6	(6)
Foreign exchange gain (loss), net	3	(1)
Gain (loss) on disposition of businesses and assets, net	(5)	—
Operating profit (loss)	326	194
Equity in net earnings (loss) of affiliates	29	57
Non-operating pension and other postretirement employee benefit (expense) income	38	28
Interest expense	(25)	(28)

Interest income	1	2
Dividend income - equity investments	42	37
Other income (expense), net	(2)	2
Earnings (loss) from continuing operations before tax	409	292
Income tax (provision) benefit	(85)	(65)
Earnings (loss) from continuing operations	324	227
Earnings (loss) from operation of discontinued operations	(1)	(7)

Income tax (provision) benefit from discontinued operations	—	—
Earnings (loss) from discontinued operations	(1)	(7)
Net earnings (loss)	323	220
Net (earnings) loss attributable to noncontrolling interests	(1)	(2)
Net earnings (loss) attributable to Celanese Corporation	322	218
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	323	225
Earnings (loss) from discontinued operations	(1)	(7)
Net earnings (loss)	322	218
Earnings (loss) per common share - basic
Continuing operations	2.85	1.89
Discontinued operations	(0.01)	(0.06)
Net earnings (loss) - basic	2.84	1.83
Earnings (loss) per common share - diluted
Continuing operations	2.83	1.88
Discontinued operations	(0.01)	(0.06)
Net earnings (loss) - diluted	2.82	1.82
Weighted average shares - basic	113,511,369	119,251,689
Weighted average shares - diluted	114,028,145	119,899,844


	As of March 31, 2021	As of December 31, 2020
	(In $ millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents	791	955
Trade receivables - third party and affiliates	959	792
Non-trade receivables, net	551	450
Inventories	1,025	978

Marketable securities	331	533

Other assets	53	55
Total current assets	3,710	3,763
Investments in affiliates	796	820
Property, plant and equipment (net of accumulated depreciation - 2021: $3,309; 2020: $3,279)	3,876	3,939
Operating lease right-of-use assets	221	232
Deferred income taxes	255	259
Other assets	456	411
Goodwill	1,134	1,166
Intangible assets, net	308	319
Total assets	10,756	10,909
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	497	496
Trade payables - third party and affiliates	906	797
Other liabilities	489	680

Income taxes payable	43	—
Total current liabilities	1,935	1,973
Long-term debt, net of unamortized deferred financing costs	3,135	3,227
Deferred income taxes	530	509
Uncertain tax positions	255	240
Benefit obligations	616	643
Operating lease liabilities	187	208
Other liabilities	191	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: 169,699,069 issued and 112,632,584 outstanding; 2020: 169,402,979 issued and 114,168,464 outstanding)	—	—

Treasury stock, at cost (2021: 57,066,485 shares; 2020: 55,234,515 shares)	(4,744)	(4,494)
Additional paid-in capital	253	257
Retained earnings	8,335	8,091
Accumulated other comprehensive income (loss), net	(302)	(328)
Total Celanese Corporation stockholders' equity	3,542	3,526
Noncontrolling interests	365	369
Total equity	3,907	3,895
Total liabilities and equity	10,756	10,909


	Three Months Ended March 31,
	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	(1,831,970)	—	(1,709,431)	—
Stock awards	296,090	—	383,122	—
Balance as of the end of the period	112,632,584	—	118,228,898	—
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	1,831,970	(250)	1,709,431	(150)

Balance as of the end of the period	57,066,485	(4,744)	51,127,396	(3,996)
Additional Paid-In Capital
Balance as of the beginning of the period		257		254
Stock-based compensation, net of tax		(4)		(12)

Balance as of the end of the period		253		242
Retained Earnings
Balance as of the beginning of the period		8,091		6,399

Net earnings (loss) attributable to Celanese Corporation		322		218
Common stock dividends		(78)		(74)
Balance as of the end of the period		8,335		6,543
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period		(328)		(300)
Other comprehensive income (loss), net of tax		26		(41)
Balance as of the end of the period		(302)		(341)
Total Celanese Corporation stockholders' equity		3,542		2,448
Noncontrolling Interests
Balance as of the beginning of the period		369		391
Net earnings (loss) attributable to noncontrolling interests		1		2
Distributions to noncontrolling interests		(5)		(5)
Balance as of the end of the period		365		388
Total equity		3,907		2,836


			Three Months Ended March 31, 2021
			(In $ millions)


Accelerated depreciation expense			2
Plant/office closures(1)			(9)


Total			(7)


	Engineered Materials	Acetate Tow	Acetyl Chain	Total
	(In $ millions)
As of December 31, 2020	768	149	249	1,166

Exchange rate changes	(22)	—	(10)	(32)
As of March 31, 2021(1)	746	149	239	1,134


	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


Exchange rate changes	—	(21)	—	—	(21)
As of March 31, 2021	44	703	45	56	848
Accumulated Amortization
As of December 31, 2020	(38)	(555)	(40)	(39)	(672)
Amortization	—	(4)	(2)	—	(6)
Exchange rate changes	—	17	2	—	19
As of March 31, 2021	(38)	(542)	(40)	(39)	(659)
Net book value	6	161	5	17	189


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


Exchange rate changes			(3)
As of March 31, 2021			119


			As of March 31, 2021
			(In $ millions)
Revolving Credit Facility


Available for borrowing(1)			1,250


	As of March 31, 2021	Total Expected 2021
	(In $ millions)
Cash contributions to defined benefit pension plans	6	23
Benefit payments to nonqualified pension plans	5	20
Benefit payments to other postretirement benefit plans	1	4
Cash contributions to German multiemployer defined benefit pension plans(1)	2	9


	Three Months Ended March 31,				Total From February 2008 Through March 31, 2021
	2021		2020
Shares repurchased	1,831,970		1,709,431		64,600,021
Average purchase price per share	$	136.47	$	87.87	$	78.22
Shares repurchased (in $ millions)	$	250	$	150	$	5,053
Aggregate Board of Directors repurchase authorizations during the period (in $ millions)	$	—	$	—	$	5,866


	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	44	(4)	43

Income tax (provision) benefit	(7)	(10)	—	(17)
As of March 31, 2021	(264)	(22)	(16)	(302)


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


Senior unsecured notes due 2021, interest rate of 5.875%	400	400
Senior unsecured notes due 2022, interest rate of 4.625%	500	500
Senior unsecured notes due 2023, interest rate of 1.125%	878	919
Senior unsecured notes due 2024, interest rate of 3.500%	499	499
Senior unsecured notes due 2025, interest rate of 1.250%	351	368
Senior unsecured notes due 2027, interest rate of 2.125%	583	610
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)	7	8
Obligations under finance leases due at various dates through 2054	194	201
Subtotal	3,578	3,671
Unamortized debt issuance costs(2)	(12)	(13)
Current installments of long-term debt	(431)	(431)
Total	3,135	3,227


	As of March 31, 2021	As of December 31, 2020
	(In $ millions)
Derivative Assets
Gross amount recognized	38	26
Gross amount offset in the consolidated balance sheets	1	2
Net amount presented in the consolidated balance sheets	37	24
Gross amount not offset in the consolidated balance sheets	8	11
Net amount	29	13


	As of March 31, 2021	As of December 31, 2020
	(In $ millions)
Derivative Liabilities
Gross amount recognized	67	123
Gross amount offset in the consolidated balance sheets	1	2
Net amount presented in the consolidated balance sheets	66	121
Gross amount not offset in the consolidated balance sheets	8	11
Net amount	58	110


	As of March 31, 2021	As of December 31, 2020
	(In € millions)
Total	1,358	1,358


	Gain (Loss) Recognized in Other Comprehensive Income (Loss)		Gain (Loss) Recognized in Earnings (Loss)
	Three Months Ended March 31,				Statement of Operations Classification
	2021	2020	2021	2020
	(In $ millions)
Designated as Cash Flow Hedges
Commodity swaps	11	—	—	—	Cost of sales
Interest rate swaps	33	(51)	—	—	Interest expense


Total	44	(51)	—	—

Designated as Net Investment Hedges
Foreign currency denominated debt (Note 8)	50	37	—	—	N/A
Cross-currency swaps	(6)	30	—	—	N/A



Total	44	67	—	—

Not Designated as Hedges

Foreign currency forwards and swaps	—	—	3	19	Foreign exchange gain (loss), net; Other income (expense), net
Total	—	—	3	19


	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, 2021
Derivatives Designated as Cash Flow Hedges
Commodity swaps	—	4	4	Current Other assets
Commodity swaps	—	15	15	Noncurrent Other assets

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

Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	4	4	Current Other assets
Total assets	—	37	37
Derivatives Designated as Cash Flow Hedges

Interest rate swaps	—	(48)	(48)	Current Other liabilities

Commodity swaps	—	(1)	(1)	Noncurrent Other liabilities
Derivatives Designated as Net Investment Hedges

Cross-currency swaps	—	(2)	(2)	Current Other liabilities
Cross-currency swaps	—	(13)	(13)	Noncurrent Other liabilities
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	(2)	(2)	Current Other liabilities
Total liabilities	—	(66)	(66)


		Fair Value Measurement
	Carrying Amount	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)	Total
	(In $ millions)
As of March 31, 2021
Equity investments without readily determinable fair values	171	—	—	—
Insurance contracts in nonqualified trusts	28	29	—	29
Long-term debt, including current installments of long-term debt	3,578	3,555	194	3,749
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 March 31, 2021
Net sales	645	119	1,056	—	(22)	(1)	1,798
Other (charges) gains, net (Note 12)	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 March 31, 2021
Goodwill and intangible assets, net	999	154	289	—	—		1,442
Total assets	3,987	991	4,097	1,681	—		10,756
	Three Months Ended March 31, 2020
Net sales	563	129	799	—	(31)	(1)	1,460
Other (charges) gains, net (Note 12)	—	(1)	—	(5)	—		(6)
Operating profit (loss)	102	27	135	(70)	—		194
Equity in net earnings (loss) of affiliates	53	—	1	3	—		57
Depreciation and amortization	34	8	39	4	—		85
Capital expenditures	24	10	43	9	—		86	(2)
	As of December 31, 2020
Goodwill and intangible assets, net	1,030	154	301	—	—		1,485
Total assets	3,990	975	3,930	2,014	—		10,909


	As of March 31, 2021	As of December 31, 2020
	(unaudited)
	(In $ millions)
Balance Sheet Data
Cash and cash equivalents	791	955

Short-term borrowings and current installments of long-term debt - third party and affiliates	497	496
Long-term debt, net of unamortized deferred financing costs	3,135	3,227
Total debt	3,632	3,723


	Volume	Price	Currency	Other	Total
	(unaudited)
	(In percentages)
Engineered Materials	7	2	6	—	15
Acetate Tow	(8)	—	—	—	(8)
Acetyl Chain	5	25	2	—	32
Total Company	5	14	4	—	23


	Three Months Ended March 31,				Change	% Change
	2021		2020
	(unaudited)
	(In $ millions, except percentages)
Net sales	645		563		82	14.6	%
Net Sales Variance
Volume	7	%
Price	2	%
Currency	6	%
Other	—	%
Other (charges) gains, net	7		—		7	100.0	%
Operating profit (loss)	130		102		28	27.5	%
Operating margin	20.2	%	18.1	%
Equity in net earnings (loss) of affiliates	25		53		(28)	(52.8)	%

Depreciation and amortization	35		34		1	2.9	%


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, 2021	—	$	—	—	$	1,063,000,000
February 1-28, 2021	1,242,115	$	132.06	1,242,115	$	899,000,000
March 1-31, 2021	589,855	$	145.74	589,855	$	813,000,000
Total	1,831,970			1,831,970


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).

10.1*						Form of 2021 Executive Office r Performance-Based Restricted Stock Unit Award Agreement.

10.2*						Form of 2021 Time-Based Restricted Stock Unit Award Agreement.

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 March 31, 2021 has been formatted in Inline XBRL.