Celanese Corp

Previous wording

•volatility or changes in the price and availability of raw materials and energy, 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;

Current wording

•volatility or changes in the price and availability of raw materials and energy, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, carbon monoxide, wood pulp, hexamethylene diamine and fuel oil and the prices for electricity and other energy sources;

Previous wording

•changes in applicable tariffs, duties and trade agreements, tax rates or legislation throughout the world including, but not limited to, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in the United States and other jurisdictions;

Current wording

•changes in applicable tariffs, duties and trade agreements, tax rates or legislation throughout the world including, but not limited to, anti-dumping and countervailing duties, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in the United States and other jurisdictions;

Previous wording

•lower pricing, primarily driven by our Acetyl Chain segment due to a more balanced global demand and supply environment, as well as our Engineered Materials segment due to competitive markets, product mix, and decreased energy surcharges; and

Current wording

•lower pricing, driven by our Acetyl Chain segment due to a more balanced global demand and supply environment, as well as our Engineered Materials segment due to competitive markets, decreased energy surcharges and product mix;

Previous wording

•an unfavorable currency impact, primarily resulting from a weaker Chinese Yuan ("CNY") relative to the U.S. dollar;

Current wording

•an unfavorable currency impact, primarily resulting from a weaker Chinese Yuan ("CNY") and Japanese Yen ("JPY") relative to the U.S. dollar;

Previous wording

•higher accelerated depreciation expense of $37 million in our Engineered Materials segment, related to the previously announced closure of our polymerization units in Uentrop, Germany (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information); and

Current wording

•an unfavorable impact of $38 million to Other (charges) gains, net primarily related to restructuring costs in our Engineered Materials segment for the previously announced closure of our facility in Mechelen, Belgium and our polymerization units in Uentrop, Germany (see Note 18 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information); and

Previous wording

•lower raw materials costs in our Engineered Materials and Acetyl Chain segments and favorable raw materials mix in our Engineered Materials segment;

Current wording

•lower raw materials costs in our Engineered Materials and Acetyl Chain segments;

Previous wording

•an increase in earnings from our Ibn Sina strategic affiliate primarily as a result of higher methyl tertiary-butyl ether volume and margin.

Current wording

•an increase in earnings from our Ibn Sina strategic affiliate, primarily as a result of higher methyl tertiary-butyl ether ("MTBE") volume and margin, partially offset by lower methanol sales volume.

Previous wording

Our effective income tax rate of 21% for the three months ended March 31, 2024 was consistent with the same period in 2023. The effective income tax rate for the current period included the tax effects related to internal debt refinancing transactions. The effective income tax rate for the three months ended March 31, 2023 included the impacts of increased valuation allowance on U.S. foreign tax credit carryforwards due to changes in forecasts of foreign sourced income and deductions that did not re-occur in the current year. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.

Current wording

Our effective income tax rate for the three months ended June 30, 2024 was 16% compared to a tax benefit of 2% for the same period in 2023, primarily due to non-recurring tax effects related to internal debt restructuring transactions for the three months ended June 30, 2024, prior year non-recurring decreases in valuation allowances on U.S. foreign tax credit carryforwards due to changes in forecasted foreign sourced income and expenses during the carryforward period for the three months ended June 30, 2023, and increased earnings in high-taxed jurisdictions related to improved economic conditions. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.

Previous wording

•higher spending in our Acetyl Chain segment of $43 million, primarily as a result of plant turnaround costs related to our joint venture, Fairway Methanol LLC, and inventory impacts of increased demand in downstream derivative products;

Current wording

•higher spending in our Acetyl Chain segment of $49 million, primarily as a result of plant turnaround costs related to our joint venture, Fairway Methanol LLC, and inventory impacts of increased demand in downstream derivative products;

Previous wording

•higher functional spending of $24 million in our Other Activities segment, primarily due to IT integration costs;

Current wording

•higher functional spending of $13 million in our Other Activities segment, primarily due to costs arising from IT integration activities;

Previous wording

•lower merger and acquisition project spending of $23 million in our Other Activities segment; and

Current wording

•lower merger and acquisition project spending and incentive compensation costs of $18 million in our Other Activities segment.

Previous wording

•lower pricing for most of our products, primarily due to competitive markets, product mix, and decreased energy surcharges; and

Current wording

•lower pricing for most of our products, primarily due to competitive markets, decreased energy surcharges, and product mix;

Previous wording

•higher accelerated depreciation expense of $37 million, related to the previously announced closure of our polymerization units in Uentrop, Germany (see Note 3 -Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information);

Current wording

•an unfavorable impact of $35 million to Other (charges) gains, net primarily related to restructuring costs for the previously announced closure of our facility in Mechelen, Belgium and our polymerization units in Uentrop, Germany (see Note 18 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information); and

Previous wording

•lower spending of $38 million, primarily driven by distribution and administrative costs.

Current wording

•lower spending of $40 million, primarily driven by a reduction in distribution and administrative costs.

Previous wording

•lower volume, primarily driven by weaker global economic conditions, the formation of the Nutrinova joint venture (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information) and customer destocking;

Current wording

•lower volume, primarily driven by the formation of the Nutrinova joint venture (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information), partially offset by higher volume, principally in POM, in Europe and Asia; and

Previous wording

Net sales decreased $242 million, or 8%, for the three months ended March 31, 2024 compared to the same period in 2023, primarily due to:

Current wording

Net sales decreased for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to:

Previous wording

•lower pricing for our products, due to a more balanced global demand and supply environment.

Current wording

•lower pricing for our products due to a more balanced global demand and supply environment; and

Previous wording

•lower raw materials and sourcing costs, primarily for carbon monoxide and ethylene; and

Current wording

•lower raw materials and sourcing costs, primarily for methanol and carbon monoxide.

Previous wording

•higher spending of $43 million, primarily as a result of plant turnaround costs related to our joint venture, Fairway Methanol LLC, and inventory impacts of increased demand in downstream derivative products;

Current wording

•higher spending of $49 million, primarily as a result of plant turnaround costs related to our joint venture, Fairway Methanol LLC, and inventory impacts of increased demand in downstream derivative products;

Previous wording

•higher functional spending of $24 million, primarily due to IT integration costs.

Current wording

•higher functional spending of $13 million, primarily due to costs arising from IT integration activities;

Previous wording

•lower merger and acquisition project spending of $23 million; and

Current wording

•lower merger and acquisition project spending of $18 million; and

Previous wording

Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents, dividends from our portfolio of strategic investments and available borrowings under our senior unsecured revolving credit facilities. As of March 31, 2024, we have $1.75 billion available for borrowing under our senior U.S. unsecured revolving credit facility and $201 million available for borrowing under our separate China Revolving Credit Facility (defined below), if required, to meet our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents of $1.5 billion as of March 31, 2024. We are actively managing our business to maintain and improve cash flow and reduce our debt, and we believe that liquidity from the above-referenced sources will be sufficient to meet our operational and capital investment needs and financial obligations for the foreseeable future.

Current wording

Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents, dividends from our portfolio of strategic investments and available borrowings under our senior unsecured revolving credit facilities. As of June 30, 2024, we have $1.75 billion available for borrowing under our senior U.S. unsecured revolving credit facility and $62 million available for borrowing under our separate China Revolving Credit Facilities (defined below), if required, to meet our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents of $1.2 billion as of June 30, 2024. We are actively managing our business to maintain and improve cash flow and reduce our debt, and we believe that liquidity from the above-referenced sources will be sufficient to meet our operational and capital investment needs and financial obligations for the foreseeable future.

Previous wording

On February 29, 2024, we announced the intended closure of our facility in Mechelen, Belgium to optimize production costs across our global network. These operations are included in the Engineered Materials segment. We expect to incur additional exit and shutdown costs related to the closure of the facility of approximately $130 million, inclusive of estimated employee termination costs, through 2025. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements.

Current wording

On February 29, 2024, we announced the intended closure of our facility in Mechelen, Belgium to optimize production costs across our global network. These operations are included in the Engineered Materials segment. We expect to incur additional exit and shutdown costs related to the closure of the facility of approximately $68 million, inclusive of estimated employee termination costs, through 2028. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements.

Previous wording

In October 2023, we announced the intended closure of our Polyamide 66 ("PA66") and High-Performance Nylon ("HPN") polymerization units at our facility in Uentrop, Germany to optimize production costs across our global network. These operations are included in the Engineered Materials segment. We expect to incur additional exit and shutdown costs related to the closure of the PA66 and HPN polymerization units in Uentrop, Germany of approximately $36 million, inclusive of estimated employee termination costs, through 2025. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements.

Current wording

In October 2023, we announced the intended closure of our Polyamide 66 ("PA66") and High-Performance Nylon ("HPN") polymerization units at our facility in Uentrop, Germany to optimize production costs across our global network. These operations are included in the Engineered Materials segment. We expect to incur additional exit and shutdown costs related to the closure of the PA66 and HPN polymerization units in Uentrop, Germany of approximately $11 million, inclusive of estimated employee termination costs, through 2027. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements.

Previous wording

In September 2023, we formed a food ingredients joint venture with Mitsui & Co., Ltd. ("Mitsui") under the name Nutrinova. We contributed receivables, inventory, property, plant and equipment, certain other assets, liabilities, technology and employees of our food ingredients business while retaining a 30% interest in the joint venture. Mitsui acquired the remaining 70% interest in the food ingredients business for a purchase price of $503 million, subject to transaction adjustments. We are accounting for our interest in the joint venture as an equity method investment, and our portion of the results continues to be included in the

Current wording

In September 2023, we formed a food ingredients joint venture with Mitsui & Co., Ltd. ("Mitsui") under the name Nutrinova. We contributed receivables, inventory, property, plant and equipment, certain other assets, liabilities, technology and employees of our food ingredients business while retaining a 30% interest in the joint venture. Mitsui acquired the remaining 70% interest in the food ingredients business for a purchase price of $503 million, subject to transaction adjustments. We are accounting for our interest in the joint venture as an equity method investment, and our portion of the results continues to be included in the Engineered Materials segment. For further information regarding the food ingredients joint venture, see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements.

Previous wording

We continue to prioritize projects that drive growth and productivity in the near term and expect total capital expenditures to be approximately $425 million in 2024, primarily associated with certain investments in growth opportunities and productivity improvements. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant and (2) the new liquid crystal polymer ("LCP") plant are on schedule and in construction. At our Bishop, Texas facility, our debottleneck of the ultra-high molecular weight polyethylene ("UHMW-PE") unit is on schedule and in detailed engineering design while construction is delayed nine to 12 months. Our energy optimization productivity project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is on schedule in detailed engineering design. In the Acetyl Chain, the planned expansion of our acetic acid unit at Clear Lake, Texas was successfully commissioned and started in the first quarter of 2024 and is operating as designed, and our vinyl acetate ethylene ("VAE") emulsions unit in Nanjing, China was successfully commissioned in the first quarter of 2024, started in the second quarter of 2024 on schedule and is operating as designed. Our planned expansions of our VAE emulsion plant in Frankfurt, Germany are in construction and on schedule. We continue to see the incremental capacity from investments made in recent years strengthen the growth and reliability of our manufacturing network to best serve our customers.

Current wording

We have focused our near-term capital expenditures on required maintenance projects, productivity improvements, and selected short term growth projects, as we continue to prioritize deleveraging and expect total capital expenditures to be approximately $425 million in 2024. In Engineered Materials, at our Nanjing, China facility, our expansions of (1) the compounding plant and (2) the new liquid crystal polymer ("LCP") plant are on schedule and in construction. At our Bishop, Texas facility, our debottleneck of the ultra-high molecular weight polyethylene ("UHMW-PE") unit is on schedule and in detailed engineering design while construction is delayed approximately 12 months. Our energy optimization productivity and greenhouse gas reduction project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is on schedule in detailed engineering design. In the Acetyl Chain, our vinyl acetate ethylene ("VAE") emulsions unit in Nanjing, China was successfully commissioned in the first quarter of 2024, started in the second quarter of 2024 on schedule and is operating as designed. Our planned expansion of our VAE emulsion plant in Frankfurt, Germany is in construction and on schedule for start-up in the second quarter of 2025.

Previous wording

Cash and cash equivalents decreased $322 million to $1.5 billion as of March 31, 2024 compared to December 31, 2023. As of March 31, 2024, $1.3 billion of the $1.5 billion of cash and cash equivalents was held by our foreign subsidiaries. Under the Tax Cuts and Jobs Act, we incurred a charge in a prior year associated with the deemed repatriation of foreign earnings. These funds are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations.

Current wording

Cash and cash equivalents decreased $620 million to $1.2 billion as of June 30, 2024 compared to December 31, 2023. As of June 30, 2024, $993 million of the $1.2 billion of cash and cash equivalents was held by our foreign subsidiaries. Under the Tax Cuts and Jobs Act, we incurred a prior year charge associated with the deemed repatriation of foreign earnings. These funds are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations.

Previous wording

Net cash provided by operating activities increased $197 million to $101 million for the three months ended March 31, 2024 compared to net cash used in operating activities of $96 million for the same period in 2023, primarily due to:

Current wording

Net cash provided by operating activities decreased $273 million to $393 million for the six months ended June 30, 2024 compared to net cash provided by operating activities of $666 million for the same period in 2023, primarily due to:

Previous wording

•favorable trade working capital of $98 million, primarily due to the timing of collections of trade receivables, inventory reduction due to lower volume and lower raw materials costs, and settlement of trade payables during the three months ended March 31, 2024;

Current wording

•unfavorable trade working capital of $80 million, primarily due to inventory increases compared to prior year reductions partially offset by lower raw materials costs, the timing of collections of trade receivables, and settlement of trade payables during the six months ended June 30, 2024;

Previous wording

Net cash used in investing activities decreased $27 million to $151 million for the three months ended March 31, 2024 compared to net cash used in investing activities of $178 million for the same period in 2023; primarily due to:

Current wording

Net cash used in investing activities decreased $99 million to $242 million for the six months ended June 30, 2024 compared to net cash used in investing activities of $341 million for the same period in 2023; primarily due to:

Previous wording

•a decrease of $27 million in capital expenditures during the three months ended March 31, 2024.

Current wording

•a decrease of $67 million in capital expenditures during the six months ended June 30, 2024; and

Previous wording

Net cash used in financing activities increased $190 million to $259 million for the three months ended March 31, 2024 compared to net cash used in financing activities of $69 million for the same period in 2023, primarily due to:

Current wording

Net cash used in financing activities increased $232 million to $748 million for the six months ended June 30, 2024 compared to net cash used in financing activities of $516 million for the same period in 2023, primarily due to:

Previous wording

•an increase in net payments on short-term debt of $300 million, primarily as a result of higher payments and lower borrowings under our revolving credit facilities and China Working Capital Term Loan Agreement (defined below);

Current wording

•an increase in net payments on our China Working Capital Term Loan Agreement (defined below) and revolving credit facilities;

Previous wording

The U.S. Credit Agreements are guaranteed by Celanese, Celanese U.S. and domestic subsidiaries together representing substantially all of the Company's U.S. assets and business operations (the "Subsidiary Guarantors").

Current wording

The U.S. Credit Agreements are guaranteed by Celanese, Celanese U.S. and domestic subsidiaries together representing substantially all of our U.S. assets and business operations (the "Subsidiary Guarantors").

Previous wording

In January 2023, Celanese (Shanghai) International Trading Co., Ltd ("CSIT"), a fully consolidated subsidiary, entered into a restatement of an existing credit facility agreement (the "China Revolving Credit Agreement") to upsize and modify the facility thereunder to consist of an aggregate CNY1.75 billion uncommitted senior unsecured revolving credit facility available under two tranches (with overdraft, bank guarantee and documentary credit sublimits) (the "China Revolving Credit Facility"). Obligations bear interest at certain fixed and floating rates. The China Revolving Credit Agreement is guaranteed by Celanese U.S.

Current wording

In January 2023, Celanese (Shanghai) International Trading Co., Ltd ("CSIT"), a fully consolidated subsidiary, entered into a restatement of an existing credit facility agreement (the "China Revolving Credit Agreement") to upsize and modify the facility thereunder to consist of an aggregate CNY1.75 billion uncommitted senior unsecured revolving credit facility available under two tranches (with overdraft, bank guarantee and documentary credit sublimits) (the "CSIT January 2023 Facility", and together with any other revolving credit facilities available to our subsidiaries in China, the "China Revolving Credit Facilities"). Obligations bear interest at certain fixed and floating rates. On April 7, 2024, the CSIT January 2023 Facility was reduced to CNY750 million. The China Revolving Credit Agreement is guaranteed by Celanese U.S.

Previous wording

In December 2023, Celanese (Nanjing) Chemical Co., Ltd. ("CNC") entered into a senior unsecured working capital loan agreement for CNY800 million, payable on December 25, 2026 and bearing interest at 2.8% (the "CNC Working Capital Loan Agreement," together with the China Revolving Credit Agreement and the China Working Capital Term Loan Agreement, the "China Credit Agreements," and the China Credit Agreements together with the U.S. Credit Agreements, the "Global Credit Agreements"). The loan under the CNC Working Capital Loan Agreement was fully drawn during the three months ended March 31, 2024. We expect the China Credit Agreements will continue to facilitate our efficient repatriation of cash to the U.S. to repay debt and effectively redomicile a portion of our U.S. debt to China at a lower average interest rate.

Current wording

On June 28, 2024, CNC entered into a senior unsecured working capital loan agreement for CNY800 million, payable in installments until June 28, 2027 and bearing interest at 2.75% (the "CNC Three Year Working Capital Loan Agreement," together with the China Revolving Credit Agreement, the China Working Capital Term Loan Agreement and the CNC Working Capital Loan Agreement, the "China Credit Agreements," and the China Credit Agreements together with the U.S. Credit Agreements, the "Global Credit Agreements"). The CNC Three Year Working Capital Loan Agreement was not drawn during the three months ended June 30, 2024. We expect the China Credit Agreements will continue to facilitate our efficient repatriation of cash to the U.S. to repay debt and effectively redomicile a portion of our U.S. debt to China at a lower average interest rate.

Previous wording

On May 8, 2024, we drew $300 million from our U.S. Revolving Credit Facility. This borrowing and cash on hand were used to repay in full our senior unsecured notes due 2024, with an interest rate of 3.500%, due on May 8, 2024.

Current wording

Subsequent to June 30, 2024, we drew $400 million from our U.S. Revolving Credit Facility. This borrowing and cash on hand were used primarily to repay in full our senior unsecured notes, with an interest rate of 5.900%, due on July 5, 2024.

Previous wording

In August 2023, we completed a cash tender offer for $2.25 billion in aggregate principal amount (the "Tender Offer") as follows:

Current wording

Also, in August 2023, we completed a cash tender offer for $2.25 billion in aggregate principal amount (the "Tender Offer") as follows:

Previous wording

In June 2023, we entered into an amendment to the amended and restated receivables purchase agreement under our U.S. accounts receivable purchasing facility among certain of our subsidiaries, our wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). We de-recognized $290 million and $1.4 billion of accounts receivable under this agreement for the three months ended March 31, 2024 and year ended December 31, 2023, respectively, and collected $318 million and $1.3 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $153 million were pledged by the SPE as collateral to the Purchasers as of March 31, 2024.

Current wording

In June 2023, we entered into an amendment to the amended and restated receivables purchase agreement under our U.S. accounts receivable purchasing facility among certain of our subsidiaries, our wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). We de-recognized $728 million and $1.4 billion of accounts receivable under this agreement for the six months ended June 30, 2024 and year ended December 31, 2023, respectively, and collected $710 million and $1.3 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $136 million were pledged by the SPE as collateral to the Purchasers as of June 30, 2024.

Previous wording

We have factoring agreements in Europe, Singapore and China with financial institutions. We de-recognized $164 million and $423 million of accounts receivable under these factoring agreements for the three months ended March 31, 2024 and year ended December 31, 2023, respectively, and collected $110 million and $407 million of accounts receivable sold under these factoring agreements during the same periods.

Current wording

We have factoring agreements in Europe, Singapore and China with financial institutions. We de-recognized $347 million and $423 million of accounts receivable under these factoring agreements for the six months ended June 30, 2024 and year ended December 31, 2023, respectively, and collected $264 million and $407 million of accounts receivable sold under these factoring agreements during the same periods.