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MEDIA RELATIONS
Celanese Corporation
1601 West LBJ Freeway
PRESS INFORMATION Dallas, TX 75234
U.S.A.
CELANESE CORPORATION INCREASES FIRST QUARTER AND FULL YEAR EARNINGS OUTLOOK
Dallas, Texas, March 23, 2005: Celanese Corporation (NYSE: CE) today announced
it increased its earnings outlook for both the first quarter and full year 2005
primarily due to better than expected performance in the Chemical Products
segment in the first quarter. As a result, the company expects first quarter
adjusted EBITDA, a key company performance measure, will be 35% to 40% higher
than adjusted EBITDA of $208 million in the first quarter of 2004 or in the
range of $280 million to $290 million. The company had guided on Feb. 28 to a
25% to 30% increase in adjusted EBITDA. Factoring in the more robust earnings in
the first quarter, full year adjusted EBITDA in 2005 is expected to be 15% to
20% higher than the combined full year 2004 adjusted EBITDA of $801 million or
in the range of $920 million to $960 million. This compares to the company's
previous guidance of a 12% to 17% increase in adjusted EBITDA.
The guidance does not factor in the pending acquisition of Acetex. It
does include the losses from the cyclo-olefin copolymers and Pemeas fuel cell
businesses, which the company has decided to sell.
In addition to adjusted EBITDA, Celanese will also begin to offer
guidance on net earnings and earnings per share. Based on a first quarter
adjusted EBITDA of $280 to $290 million, this would result in a net loss in the
range of $40 million to $35 million or a loss per share
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between $0.26 and $0.23. Excluding special and one-time expenses related to the
initial public offering, cancellation of a monitoring fee and special charges,
adjusted net earnings for basic EPS would be between $116 million and $121
million for the first quarter, and basic earnings per share - adjusted would be
between $0.73 and $0.76. Basic earnings per share - adjusted is computed by
dividing income available to common shareholders, less one-time and other items,
by the sum of weighted average common shares outstanding, except for the first
quarter of 2005, which was calculated assuming the shares were outstanding
during the entire period. (The initial public offering occurred on January 21,
2005.)
For the full year, based on an adjusted EBITDA range of $920 million to
$960 million, net earnings would be between $65 million and $110 million and
earnings per share between $0.35 and $0.63. Excluding the special adjustments
noted in the paragraph above, adjusted net earnings for basic earnings per share
would range between $255 million to $280 million or basic earnings per share -
adjusted of $1.61 to $1.77.
Celanese will publish its first quarter financial results and host a
conference call on May 10, 2005.
YOUR CONTACT:
USA Europe Investors:
Jeanne Cullers Phillip Elliott Andrea Stine
Phone: +01 (972) 443 4824 Phone: +49 (0)69/305 33480 Phone: +01 (908) 901-4504
Telefax: +01 (972) 443 8519 Telefax: +49 (0)69/305 36787
Telefax: +01 (908) 901-4805
Email:JECullers@celanese.com Email: P.Elliott@celanese.com Email: A.Stine@celanese.com
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Celanese Corporation (NYSE:CE) is an integrated global producer of
value-added industrial chemicals based in Dallas, Texas. The Company is the #1
or #2 producer of products comprising the majority of its sales and has four
major businesses: Chemicals Products, Technical Polymers Ticona, Acetate
Products and Performance Products. Celanese has 29 production plants, with major
operations in North America, Europe and Asia. In 2004, Celanese Corporation and
its predecessor had combined net sales of $5.1 billion. The presentation of
combined net sales of Celanese Corporation with its predecessor is not in
accordance with U.S. GAAP. For more information on Celanese Corporation,
including a reconciliation of the combined net sales, please visit the company's
web site at www.celanese.com.
RECONCILIATION OF NON-U.S. GAAP MEASURES TO U.S. GAAP
This release reflects our three performance measures, adjusted EBITDA, adjusted
net earnings for basic earnings per share and basic earnings per share-adjusted,
all non-U.S. GAAP measures. Adjusted EBITDA is defined as earnings (loss) from
continuing operations plus interest expense net of interest income, income taxes
and depreciation and amortization, and further adjusted for certain cash and
non-cash charges. Adjusted net earnings for basic earnings per share is defined
as income available to common shareholders adjusted for special and one-
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time expenses. Basic earnings per share-adjusted is defined as income available
to common shareholders adjusted for special and one-time expenses divided by the
sum of weighted average common shares outstanding except for Q1 2005, which was
calculated assuming the shares were outstanding during the entire period. (The
IPO occurred on January 21, 2005.) The most directly comparable financial
measure presented in accordance with U.S. GAAP for adjusted EBITDA is net
earnings (loss) and for adjusted net earnings for basic earnings per share and
for basic earnings per share-adjusted is income available to common
shareholders. For a reconciliation of adjusted EBITDA to net earnings (loss) see
the accompanying schedules to our fourth quarter 2004 earnings release on our
website at www.celanese.com and for adjusted net earnings for basic earnings per
share and basic earnings per share-adjusted see the appendix titled Appendix -
Earnings Reconciliation accompanying this release. Reconciliations of certain
forward-looking non-U.S. GAAP to U.S. GAAP measures are not available.
Forward-Looking Statements
This release may contain "forward-looking statements," which include information
concerning the company's future performance. 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
Registration Statement on Form S-1 at the SEC's website at www.sec.gov. 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.
APPENDIX - EARNINGS RECONCILIATION [CELANESE LOGO]
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(usd millions, except share price)
2003 2004 Q1 2005 Q1 2005 FY 2005 FY 2005
FY Q1 Q2 Q3 Q4 FY Low High Low High
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Guidance Guidance
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Adjusted EBITDA 675 208 188 218 187 801 280 290 920 960
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Reported/Projected Net Earnings/(Loss) 148 78 (125) (71) (57) (175) (40) (35) 65 110
Preferred Dividends 0 0 0 0 0 0 (2) (2) (10) (10)
Net Earnings for Basic EPS 148 78 (125) (71) (57) (175) (42) (37) 55 100
Special Adjustments (see below) 94 38 130 103 103 374 158 158 200 180
Adjusted Net Earnings for Basic EPS 242 116 5 32 46 199 116 121 255 280
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Basic EPS 0.93 0.49 (0.79) (0.45) (0.36) (1.10) (0.26) (0.23) 0.35 0.63
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Basic EPS - Adjusted 1.53 0.73 0.03 0.20 0.29 1.26 0.73 0.76 1.61 1.77
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Special Adjustments
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Transaction 4 0 8 2 11 21 0 0 0 0
Inventory Step Up 0 0 49 0 4 53 0 0 0 0
Refinancing costs 0 0 71 39 0 110 105 105 105 105
Special Charges 5 28 (1) 59 33 119 8 8 50 30
Mgmt Comp/SAR's 59 0 1 0 50 51 0 0 0 0
Monitor/Cancel Fee 0 0 2 3 5 10 45 45 45 45
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Total Special Adjustments 68 28 130 103 103 364 158 158 200 180
Tax effect on spec adj 26 10 0 0 0 10 0 0 0 0
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Shares Outstanding 158.5 158.5 158.5 158.5 158.5 158.5 158.5 158.5 158.5 158.5
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Potentially Dilutive Securities
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Preferred Conversion 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0
Option Conversion (currently outstanding) 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.3 11.3
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This schedule reconciles reported Net Earnings to Adjusted Net Earnings for
Basic EPS used to calculate Basic EPS-Adjusted, w hich excludes amounts related
to the acquisition of Celanese AG and associated financing and other costs.
Tax effect on special adjustments for Q2, Q3 and Q4 2004, as well as 2005 is
estimated to be zero due to valuation allow ances on all U.S. tax benefits. EPS
information for 2003 and 2004 is calculated using the current capital structure
of Celanese Corp, and not the capital structure of Celanse AG.
Basic EPS and Basic EPS - Adjusted were calculated assuming all shares were
outstanding during all periods presented.
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APPENDIX - FULL YEAR 2005 KEY MODELING
ASSUMPTIONS
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INCOME STATEMENT EQUITY - CE SHARES
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($ MILLIONS)
o COMMON STOCK = 158.5 MILLION OUTSTANDING
o DEPRECIATION = $230-$250
o POTENTIALLY DILUTIVE SECURITIES:
o SPECIAL CHARGES = $30-$50
o 12 MILLION PREFERRED SHARES
o NET INTEREST EXPENSE = $250-$260
o 11 MILLION STOCK OPTIONS
o EXCLUDING DEFERRED FINANCE/DEBT PREMIUM OF APPROX. $115
(INCLUDES $105MM OF ACCELERATED REFINANCING AND $10MM o PREFERRED STOCK DIVIDENDS = APPROX. $10 MILLION ON 9.6
NORMAL AMORTIZATION) MILLION OUTSTANDING SHARES
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o AVG COST OF BORROWED CAPITAL = 7% ---------------------------------------------------------------
EQUITY - CAG MINORITY INTEREST
o EFFECTIVE TAX RATE OF 34% TO 37% ------------------------------
o MONITORING FEE (TERMINATED JAN '05) : o APPROXIMATELY 8 MILLION SHARES OUTSTANDING AS OF
FEBRUARY 16
o ANNUAL FEE $10
o CURRENT TENDER OFFER PRICE = (EURO)41.92/SHARE
o CANCELLATION $35
- --------------------------------------------------------------- o NET GUARANTEED PAYMENT = APPROXIMATELY (EURO)24 MILLION
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CAPITAL EXPENDITURES
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o CAPITAL EXPENDITURES = $210 - $230
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