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Celanese Corp - Quarter Report: 2024 September (Form 10-Q)

Other assets  Total current assets  Investments in affiliates  
Property, plant and equipment (net of accumulated depreciation - 2024: $; 2023: $)
  Operating lease right-of-use assets  Deferred income taxes  Other assets  Goodwill  Intangible assets, net  Total assets  LIABILITIES AND EQUITYCurrent Liabilities  Short-term borrowings and current installments of long-term debt - third party and affiliates  Trade payables - third party and affiliates  Other liabilities  Income taxes payable  Total current liabilities  Long-term debt, net of unamortized deferred financing costs  Deferred income taxes  Uncertain tax positions  Benefit obligations  Operating lease liabilities  Other liabilities  Commitments and Contingencies par value,  shares authorized (2024 and 2023: issued and outstanding)  
Common stock, $ par value,  shares authorized (2024: issued and outstanding; 2023: issued and outstanding)
  
Treasury stock, at cost (2024: shares; 2023: shares)
()()Additional paid-in capital  Retained earnings  Accumulated other comprehensive income (loss), net()()Total Celanese Corporation shareholders' equity  Noncontrolling interests  Total equity  Total liabilities and equity  

See the accompanying notes to the unaudited interim consolidated financial statements.
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CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF EQUITY
Three Months Ended September 30,
20242023
SharesAmountSharesAmount
(In $ millions, except share data)
Common Stock
Balance as of the beginning of the period    
Stock option exercises    
Stock awards    
Balance as of the end of the period    
Treasury Stock
Balance as of the beginning of the period () ()
Issuance of treasury stock under stock plans    
Balance as of the end of the period () ()
Additional Paid-In Capital
Balance as of the beginning of the period  
Stock-based compensation, net of tax  
Balance as of the end of the period  
Retained Earnings
Balance as of the beginning of the period  
Net earnings (loss) attributable to Celanese Corporation  
Common stock dividends()()
Balance as of the end of the period  
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period()()
Other comprehensive income (loss), net of tax ()
Balance as of the end of the period()()
Total Celanese Corporation shareholders' equity  
Noncontrolling Interests
Balance as of the beginning of the period  
Net earnings (loss) attributable to noncontrolling interests ()
Other comprehensive income (loss), net of tax  
Distributions/dividends to noncontrolling interests()()
Balance as of the end of the period  
Total equity  

See the accompanying notes to the unaudited interim consolidated financial statements.
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CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF EQUITY
Nine Months Ended September 30,
20242023
SharesAmountSharesAmount
(In $ millions, except share data)
Common Stock
Balance as of the beginning of the period    
Stock option exercises    
Stock awards    
Balance as of the end of the period    
Treasury Stock
Balance as of the beginning of the period () ()
Issuance of treasury stock under stock plans() () 
Balance as of the end of the period () ()
Additional Paid-In Capital
Balance as of the beginning of the period  
Stock-based compensation, net of tax  
Stock option exercises, net of tax  
Balance as of the end of the period  
Retained Earnings
Balance as of the beginning of the period  
Net earnings (loss) attributable to Celanese Corporation  
Common stock dividends()()
Balance as of the end of the period  
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period()()
Other comprehensive income (loss), net of tax ()
Balance as of the end of the period()()
Total Celanese Corporation shareholders' equity  
Noncontrolling Interests
Balance as of the beginning of the period  
Net earnings (loss) attributable to noncontrolling interests  
Other comprehensive income (loss), net of tax  
Distributions/dividends to noncontrolling interests()()
Balance as of the end of the period  
Total equity  

See the accompanying notes to the unaudited interim consolidated financial statements.
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CELANESE CORPORATION AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS         
Nine Months Ended
September 30,
20242023
(In $ millions)
Operating Activities
Net earnings (loss)  
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities
Asset impairments  
Depreciation, amortization and accretion  
Pension and postretirement net periodic benefit cost  
Pension and postretirement contributions()()
Deferred income taxes, net ()
(Gain) loss on disposition of businesses and assets, net ()
Stock-based compensation  
Undistributed earnings in unconsolidated affiliates() 
Other, net  
Operating cash provided by (used in) discontinued operations()()
Changes in operating assets and liabilities
Trade receivables - third party and affiliates, net()()
Inventories() 
Other assets  
Trade payables - third party and affiliates()()
Other liabilities()()
Net cash provided by (used in) operating activities  
Investing Activities
Capital expenditures on property, plant and equipment()()
Acquisitions, net of cash acquired  
Proceeds from sale of businesses and assets, net  
Settlement of cross-currency swap agreement
  
Other, net()()
Net cash provided by (used in) investing activities() 
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less ()
Proceeds from short-term borrowings  
Repayments of short-term borrowings()()
Proceeds from long-term debt  
Repayments of long-term debt()()
Stock option exercises
  
Common stock dividends()()
Distributions/dividends to noncontrolling interests
()()
LicensesCustomer-
Related
Intangible
AssetsDeveloped
TechnologyCovenants
Not to
Compete
and Other
The Company assesses the recoverability of the carrying amount of its indefinite-lived intangible assets either qualitatively or quantitatively annually during the third quarter of its fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.
The Company completed qualitative evaluations on its indefinite-lived intangible assets, with the exception of those assigned to the engineered materials reporting unit, and concluded that it was more likely than not that the fair value of these indefinite-lived intangible assets exceeded their carrying value.
Indefinite-lived intangible assets assigned to the engineered materials reporting unit were tested quantitatively utilizing the relief from royalty method under the income approach to determine the estimated fair value for each indefinite-lived intangible asset. The key assumptions used in this model include discount rates, royalty rates, growth rates, tax rates, sales projections and terminal value rates. The discount rate was based on the Company's weighted average return on assets adjusted for risks specific to the indefinite-lived intangible assets. Royalty rates are established by management using the most recent third party valuations and are periodically substantiated by third-party valuation consultants. The growth rates and sales projections were based on historical trends and expected growth drivers such as macroeconomic trends in the industries and territories in which the indefinite-lived intangible assets operate. The tax rate considers the operating structure of the Company and tax rates in jurisdictions in which the indefinite-lived intangible assets operate. A terminal value rate was applied to the final year of the projected period to reflect continued stable, perpetual growth.
In connection with the Company's annual indefinite-lived intangible assets impairment assessment, the Company recorded a non-cash impairment loss of $ million in Other charges (gains), net (Note 18) to impair the net book value of certain trade names, primarily Zytel®, included in the Engineered Materials segment. Other than these trade names, the estimated fair value of the Company's indefinite-lived intangible assets exceeded the carrying value of the underlying assets.
While the Company believes the assumptions used in the impairment tests were reasonable, changes in market conditions or key assumptions made in future quantitative assessments, including discount rates, royalty rates, growth rates, tax rates, sales projections and terminal value rates, could negatively impact the results of future impairment testing and could result in the
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renew or extend any intangible assets. 2026 2027 2028 2029 
6.
  Customer rebates  
Derivatives (Note 12)
  
Interest (Note 7)
  
Legal (Note 14)
  Operating leases  
Restructuring (Note 18)
  Salaries and benefits  Sales and use tax/foreign withholding tax payable  Investment in affiliates  Other  Total  
7.
  
Short-term borrowings, including amounts due to affiliates(1)
  
Revolving credit facilities(2)
  Total  
______________________________
(1)% and % as of September 30, 2024 and December 31, 2023, respectively.
(2)% and % as of September 30, 2024 and December 31, 2023, respectively.
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%  
Senior unsecured notes due 2024, interest rate of %
  
Senior unsecured notes due 2025, interest rate of %
  
Senior unsecured notes due 2025, interest rate of %
  
Senior unsecured notes due 2026, interest rate of %
  
Senior unsecured notes due 2026, interest rate of %
  
Senior unsecured notes due 2027, interest rate of %
  
Senior unsecured notes due 2027, interest rate of %
  
Senior unsecured term loan due 2027(1)
  
Senior unsecured notes due 2028, interest rate of %
  
Senior unsecured notes due 2028, interest rate of %
  
Senior unsecured notes due 2029, interest rate of %
  
Senior unsecured notes due 2029, interest rate of %
  
Senior unsecured notes due 2030, interest rate of %
  
Senior unsecured notes due 2032, interest rate of %
  
Senior unsecured notes due 2033, interest rate of %
  
Pollution control and industrial revenue bonds due at various dates through 2030(2)
  
Bank loans due at various dates through 2030(3)
  
On November 1, 2024, Celanese U.S. entered into a senior unsecured term loan credit agreement (the "November 2024 U.S. Term Loan Credit Agreement"), pursuant to which the lenders provided a delayed-draw term loan due days from the date of borrowing in an amount up to $ billion. Amounts outstanding under the November 2024 U.S. Term Loan Credit Agreement will accrue interest at a rate equal to the Secured Overnight Financing Rate with an interest period of one or three months ("Term SOFR") plus a margin of % to % per annum, or the base rate plus a margin of % to %, in each case, based on the Company's senior unsecured debt rating, subject to further changes based on such ratings. The commitments under the November 2024 U.S. Term Loan Credit Agreement will terminate by March 15, 2025. The loan under the November 2024 U.S. Term Loan Credit Agreement was not drawn prior to issuance date of this Form 10-Q.
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% of the principal amount, plus a "make-whole" premium as specified in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date.
Accounts Receivable Purchasing Facility
In June 2023, the Company entered into an amendment to the amended and restated receivables purchase agreement (the "Amended Receivables Purchase Agreement") under its U.S. accounts receivable purchasing facility among certain of the Company's subsidiaries, its wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). The Amended Receivables Purchase Agreement extends the term of the accounts receivable purchasing facility such that the SPE may sell certain receivables until June 18, 2025. Under the Amended Receivables Purchase Agreement, transfers of U.S. accounts receivable from the SPE are treated as sales and are accounted for as a reduction in accounts receivable because the agreement transfers effective control over and risk related to the U.S. accounts receivable to the SPE. The Company and related subsidiaries have no continuing involvement in the transferred U.S. accounts receivable, other than collection and administrative responsibilities and, once sold, the U.S. accounts receivable are no longer available to satisfy creditors of the Company or the related subsidiaries. These sales are transacted at % of the face value of the relevant U.S. accounts receivable, resulting in derecognition of the U.S. accounts receivables from the Company's unaudited consolidated balance sheet. The Company de-recognized $ billion and $ billion of accounts receivable under this agreement for the nine months ended September 30, 2024 and year ended December 31, 2023, respectively, and collected $ billion and $ billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $ million were pledged by the SPE as collateral to the Purchasers as of September 30, 2024.
Factoring and Discounting Agreements
The Company has factoring agreements in Europe and Singapore with financial institutions to sell % and % of certain accounts receivable, respectively, on a non-recourse basis. The Company also has a factoring agreement in China with a financial institution to sell % of certain accounts receivable on a limited recourse basis. These transactions are treated as sales and are accounted for as reductions in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyer. The Company has no material continuing involvement in the transferred receivables, other than collection and administrative responsibilities and, once sold, the accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. The Company de-recognized $ million and $ million of accounts receivable under these factoring agreements for the nine months ended September 30, 2024 and year ended December 31, 2023, respectively, and collected $ million and $ million of accounts receivable sold under these factoring agreements during the same periods.
The Company has master discounting agreements (the "Master Discounting Agreements") with financial institutions in China to discount, on a non-recourse basis, banker's acceptance drafts ("BADs"), classified as accounts receivable. Under the Master Discounting Agreements, transfers of BADs are treated as sales and are accounted for as a reduction in accounts receivable because the Master Discounting Agreements transfer effective control over and risk related to the transferred BADs to the financial institutions. The Company has no continuing involvement in the transferred BADs, and the BADs are no longer available to satisfy creditors in the event of a bankruptcy. The Company received $ million and $ million from the accounts receivable transferred under the Master Discounting Agreements as of September 30, 2024 and December 31, 2023, respectively.
Covenants
The Company's material financing arrangements contain customary covenants, such as events of default and change of control provisions, and in the case of the U.S. Credit Agreements the maintenance of certain financial ratios (subject to adjustment following certain qualifying acquisitions and dispositions, as set forth in the U.S. Credit Agreements, as amended). Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations.
The Company is in compliance with the covenants in its material financing arrangements as of September 30, 2024.
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8.
        Interest cost        
Expected return on plan assets
() () () ()    
The purchase of treasury stock reduces the number of shares outstanding. The repurchased shares may be used by the Company for compensation programs utilizing the Company's stock and other corporate purposes. The Company accounts for treasury stock using the cost method and includes treasury stock as a component of shareholders' equity.
The Company did repurchase any Common Stock during the nine months ended September 30, 2024 or 2023.
Other Comprehensive Income (Loss), Net
    () Gain (loss) on derivative hedges   () ()Pension and postretirement benefits gain (loss)   () ()Total    ()()
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 ()()
11.
 () ()
The effective income tax rate for the three and nine months ended September 30, 2024, was higher compared to the same period in 2023, primarily due to prior period impacts that did not recur in the current year, including deferred tax benefits of $ million resulting from the relocation of certain intangible assets to align with the foreign operations acquired with the Mobility & Materials business from DuPont de Nemours, Inc., differences in the tax and U.S. GAAP gain resulting from the formation of the Nutrinova joint venture and decreases in valuation allowance on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period. In addition, the effective income tax rate for the nine months ended September 30, 2024, was higher compared to the same period in 2023 due to non-recurring tax effects related to internal debt restructuring transactions in the current year.
In December 2017, the Tax Cuts and Jobs Act (the "TCJA") was enacted and was effective January 1, 2018. The U.S. Treasury has issued various notices and final and proposed regulatory packages supplementing the TCJA provisions since 2018. There have been no material proposed or final regulatory packages during the three months ended September 30, 2024.
In August 2022, the Inflation Reduction Act (the "IRA") was enacted and included a 1% excise tax on share repurchases in excess of $1 million, and a corporate minimum tax of 15% on adjusted book earnings. The corporate minimum tax paid is creditable in future years to the extent regular tax liability exceeds the minimum tax in any given year. The Company does not expect these provisions or any newly issued administrative guidance to have a material impact to future income tax expense. The IRA also provided various beneficial credits for energy efficiency related to manufacturing, transportation and fuels, hydrogen/carbon recapture and renewable energy, which the Company is evaluating in regard to planned projects.
The Company will continue to monitor the expected impacts of any new guidance on the Company's filing positions and will record the impacts as discrete income tax expense adjustments in the period the guidance is finalized or becomes effective.
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12.
)   Cost of salesInterest rate swaps  ()()Interest expenseForeign currency forwards()   Cost of salesTotal() () Designated as Fair Value Hedges
Cross-currency swaps(1)
() () Foreign exchange gain (loss), netDesignated as Net Investment HedgesForeign currency denominated debt()   N/A
Cross-currency swaps(2)
()   N/ATotal()   Not Designated as HedgesForeign currency forwards and swaps  ()()Foreign exchange gain (loss), net; Other income (expense), net
______________________________
(1) million of the issued notes into a Japanese yen-denominated borrowing at prevailing yen interest rates, maturing on July 15, 2029. The swap qualifies and has been designated as a fair value hedge of the Company's foreign currency exchange rate exposure on the long-term debt of its Japanese yen-denominated subsidiary.
 billion of the issued notes into -year and -year euro-denominated borrowings at prevailing euro interest rates, maturing on November 15, 2028 and November 15, 2030, respectively. The swaps qualify and have been designated as fair value hedges of the Company's foreign currency exchange rate exposure on the long-term debt of its euro-denominated subsidiary.
(2) billion senior unsecured notes due 2033 (Note 7) into Chinese yuan-denominated borrowings at prevailing yuan interest rates, maturing on November 15, 2033. The swaps qualify and have been designated as net investment hedges of the Company's foreign currency exchange rate exposure on the net investment of certain of its Chinese yuan-denominated subsidiaries.
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)()() Cost of salesInterest rate swaps  ()()Interest expenseForeign currency forwards()   Cost of salesTotal() ()()Designated as Fair Value Hedges
Cross-currency swaps(1)
    Foreign exchange gain (loss), net
Designated as Net Investment Hedges
Foreign currency denominated debt()   N/A
Cross-currency swaps(2)
()()  N/ATotal()()  Not Designated as HedgesForeign currency forwards and swaps  ()()Foreign exchange gain (loss), net; Other income (expense), net                          () ()      )() ()        
______________________________
(1)
(2) million and $ million for the nine months ended September 30, 2024 and 2023, respectively.
(3)
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 billion of remaining performance obligations related to take-or-pay contracts. The Company expects to recognize approximately $ million of its remaining performance obligations as Net sales in 2024, $ million in 2025, $ million in 2026 and the balance thereafter.
Contract Balances
Contract liabilities primarily relate to advances or deposits received from the Company's customers before revenue is recognized. These amounts are recorded as deferred revenue and are included in Current and Noncurrent Other liabilities in the unaudited consolidated balance sheets.
The Company does have any material contract assets as of September 30, 2024.
Disaggregated Revenue
In general, the Company's business segmentation is aligned according to the nature and economic characteristics of its products and customer relationships and provides meaningful disaggregation of each business segment's results of operations.
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    Europe and Africa    Asia-Pacific    South America    Total    Acetyl ChainNorth America    Europe and Africa    Asia-Pacific    South America    
Total(1)
    
______________________________
(1) million and $ million for the three months ended September 30, 2024 and 2023, respectively. Excludes intersegment sales of $ million and $ million for the nine months ended September 30, 2024 and 2023, respectively.
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17.
    Earnings (loss) from discontinued operations()()()()Net earnings (loss)    Weighted average shares - basic    
Incremental shares attributable to equity awards(1)
    Weighted average shares - diluted    
______________________________
(1) and shares of Common Stock for the three months ended September 30, 2024 and 2023, respectively; and and equity award shares for the three months ended September 30, 2024 and 2023, respectively, as their effect would have been antidilutive. Excludes stock options to purchase and shares of Common Stock for the nine months ended September 30, 2024 and 2023, respectively; and and equity award shares for the nine months ended September 30, 2024 and 2023, respectively, as their effect would have been antidilutive.
18.
)()()()Asset impairments()(2)()()(2)()Plant/office closures () ()  ))    
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
In this Quarterly Report on Form 10-Q ("Quarterly Report"), the term "Celanese" refers to Celanese Corporation, a Delaware corporation, and not its subsidiaries. The terms the "Company," "we," "our" and "us," refer to Celanese and its subsidiaries on a consolidated basis. The term "Celanese U.S." refers to the Company's subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.
The following discussion should be read in conjunction with the Celanese Corporation and Subsidiaries consolidated financial statements as of and for the year ended December 31, 2023 filed on February 23, 2024 with the Securities and Exchange Commission ("SEC") as part of the Company's Annual Report on Form 10-K ("2023 Form 10-K") and the unaudited interim consolidated financial statements and notes to the unaudited interim consolidated financial statements herein, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Investors are cautioned that the forward-looking statements contained in this section and other parts of this Quarterly Report involve both risk and uncertainty. Several important factors could cause actual results to differ materially from those anticipated by these statements. Many of these statements are macroeconomic in nature and are, therefore, beyond the control of management. See "Forward-Looking Statements" below and at the beginning of our 2023 Form 10-K.
Forward-Looking Statements
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and other parts of this Quarterly Report contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, us. Generally, words such as "believe," "expect," "intend," "estimate," "anticipate," "project," "plan," "may," "can," "could," "might," and "will," and similar expressions, as they relate to us are intended to identify forward-looking statements. These statements reflect our current views and beliefs with respect to future events as of the date hereof, are not historical facts or guarantees of future performance and involve risks and uncertainties that are difficult to predict and many of which are outside of our control. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. All forward-looking statements made in this Quarterly Report are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this Quarterly Report will increase with the passage of time. We undertake no obligation, and disclaim any duty, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changes in our expectations or otherwise.
Risk Factors
See Part I - Item 1A. Risk Factors of our 2023 Form 10-K for a description of certain risk factors that you should consider which could significantly affect our business and/or financial results. In addition, the following factors, among others, could cause our actual results to differ materially from those results, performance or achievements that may be expressed or implied by such forward-looking statements:
•changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate;
•the length and depth of product and industry business cycles particularly in the automotive, electrical, textiles, electronics and construction industries;
•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;
•the ability to pass increases in raw materials prices, logistics costs and other costs on to customers or otherwise improve margins through price increases;
•the possibility that we will not be able to realize the anticipated benefits of the Mobility & Materials business (the "M&M Business") we acquired from DuPont de Nemours, Inc. (the "M&M Acquisition"), including synergies and growth opportunities, whether as a result of difficulties arising from the operation of the M&M Business or other unanticipated delays, costs, inefficiencies or liabilities;
•impairments of goodwill or intangible assets;
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•increased commercial, legal or regulatory complexity of entering into, or expanding our exposure to, certain end markets and geographies;
•risks in the global economy and equity and credit markets and their potential impact on our ability to pay down debt in the future and/or refinance at suitable rates, in a timely manner, or at all;
•risks and costs associated with increased leverage from the M&M Acquisition, including increased interest expense and potential reduction of business and strategic flexibility;
•the ability to maintain plant utilization rates and to implement planned capacity additions, expansions and maintenance;
•the ability to reduce or maintain current levels of production costs and to improve productivity by implementing technological improvements to existing plants;
•increased price competition and the introduction of competing products by other companies;
•the ability to identify desirable potential acquisition or divestiture opportunities and to complete such transactions, including obtaining regulatory approvals, consistent with our strategy;
•market acceptance of our products and technology;
•compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, transportation, logistics or supply chain disruptions, cybersecurity incidents, terrorism or political unrest, public health crises (including, but not limited to, the COVID-19 pandemic), or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the direct or indirect consequences of acts of war or conflict (such as the Russia-Ukraine conflict or the Israel-Hamas conflict) or terrorist incidents or as a result of weather, natural disasters, or other crises;
•the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to us;
•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;
•changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property;
•potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change or other sustainability matters;
•potential liability resulting from pending or future claims or litigation, including investigations or enforcement actions, or from changes in the laws, regulations or policies of governments or other governmental activities, in the countries in which we operate;
•our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry, and the success of our deleveraging efforts;
•changes in currency exchange rates and interest rates;
•tax rates and changes thereto; and
•various other factors, both referenced and not referenced in this Quarterly Report.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Quarterly Report as anticipated, believed, estimated, expected, intended, planned or projected. We neither intend nor assume any obligation to update these forward-looking statements, which speak only as of the date hereof.
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Overview
We are a global chemical and specialty materials company. We are a leading global producer of high performance engineered polymers that are used in a variety of high-value applications, as well as one of the world's largest producers of acetyl products, which are intermediate chemicals for nearly all major industries. As a recognized innovator in the chemicals industry, we engineer and manufacture a wide variety of products essential to everyday living. Our broad product portfolio serves a diverse set of end-use applications including automotive, chemical additives, construction, consumer and industrial adhesives, medical, consumer electronics, energy storage, filtration, paints and coatings, paper and packaging, industrial applications and textiles. Our products enjoy leading global positions due to our differentiated business models, large global production capacity, operating efficiencies, proprietary technology and competitive cost structures.
Our large and diverse global customer base primarily consists of major companies across a broad array of industries. We hold geographically balanced global positions and participate in diversified end-use applications. We combine a demonstrated track record of execution, strong performance built on differentiated business models and a clear focus on growth and value creation. Known for operational excellence, reliability and execution of our business strategies, we partner with our customers around the globe to deliver best-in-class technologies and solutions.
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Results of Operations
Financial Highlights
Three Months Ended September 30, Nine Months Ended September 30,
20242023Change20242023Change
(unaudited)
(In $ millions, except percentages)
Statement of Operations Data
Net sales2,648 2,723 (75)7,910 8,371 (461)
Gross profit622 673 (51)1,817 1,990 (173)
Selling, general and administrative ("SG&A") expenses(248)(244)(4)(768)(803)35 
Other (charges) gains, net(61)(17)(44)(123)(50)(73)
Gain (loss) on disposition of businesses and assets, net(3)503 (506)(12)508 (520)
Operating profit (loss)248 842 (594)708 1,428 (720)
Equity in net earnings (loss) of affiliates51 12 39 157 50 107 
Non-operating pension and other postretirement employee benefit (expense) income3 (1)4 7 (2)9 
Interest expense(169)(178)9 (512)(542)30 
Interest income5 12 (7)28 27 1 
Dividend income - equity investments30 30 — 95 95 — 
Earnings (loss) from continuing operations before tax183 714 (531)523 1,051 (528)
Earnings (loss) from continuing operations122 950 (828)400 1,266 (866)
Earnings (loss) from discontinued operations(2)(1)(1)(3)(3)— 
Net earnings (loss)120 949 (829)397 1,263 (866)
Net earnings (loss) attributable to Celanese Corporation116 951 (835)392 1,262 (870)
Other Data
Depreciation and amortization203 173 30 616 517 99 
SG&A expenses as a percentage of Net sales9.4 %9.0 %9.7 %9.6 %
Operating margin(1)
9.4 %30.9 %9.0 %17.1 %
Other (charges) gains, net
Restructuring
(27)(7)(20)(84)(40)(44)
Asset impairments
(34)(9)(25)(39)(9)(30)
Plant/office closures
— (1)1 — (1)1 
Consolidated Results
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Net sales decreased $75 million, or 3%, for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower pricing, driven by our Acetyl Chain segment due to an environment with greater supply than demand during the three months ended September 30, 2024 and demand-based pressures on certain pricing inputs, as well as our Engineered Materials segment due to product mix and competitive market dynamics; and
•lower volume in our Engineered Materials segment, 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 in our Engineered Materials segment for polyoxymethylene ("POM") in Europe, as well as higher volume in our Acetyl Chain segment primarily for acetate tow and vinyl acetate monomer ("VAM") principally in Europe.
Operating profit decreased $594 million, or 71%, for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•a gain of $508 million in our Engineered Materials segment recognized in September 2023 on the formation of the Nutrinova joint venture, which did not recur in the current year (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information);
•lower Net sales across our segments; and
•an unfavorable impact of $45 million to Other (charges) gains, net, in our Engineered Materials segment, primarily related to an impairment loss on certain trade names, primarily Zytel®, arising from our annual indefinite-lived intangible assets impairment assessment and restructuring costs for the previously announced closure of our facility in Mechelen, Belgium (see Note 18 - Other (Charges) Gains, Net and Note 5 - Goodwill and Intangible Assets, Net in the accompanying unaudited interim consolidated financial statements for further information);
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partially offset by:
•lower merger and acquisition project spending of $16 million in our Other Activities segment.
Equity in net earnings (loss) of affiliates increased $39 million, or 325%, for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•an increase in earnings from our Mylar Specialty Films (formally DuPont Teijin Films) strategic affiliates of $24 million, primarily due to increased restructuring costs incurred in the three months ended September 30, 2023, which did not recur in the current year.
Our effective income tax rate for the three months ended September 30, 2024 was 33% compared to a tax benefit of 33% for the same period in 2023, primarily due to prior period impacts that did not recur in the current year, including deferred tax benefits of $293 million resulting from the relocation of certain intangible assets to align with the foreign operations acquired with the M&M Acquisition, differences in the tax and U.S. GAAP gain resulting from the formation of the Nutrinova joint venture and a decrease in valuation allowance on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Net sales decreased $461 million, or 6%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower pricing, driven by our Acetyl Chain segment, due to an environment with greater supply than demand during the nine months ended September 30, 2024, primarily in Europe and Asia, as well as our Engineered Materials segment due to product mix, competitive market dynamics and decreased energy surcharges;
•lower volume in our Engineered Material segment, 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); and
•an unfavorable currency impact, primarily resulting from a weaker Japanese Yen ("JPY") and Chinese Yuan ("CNY") relative to the U.S. dollar;
partially offset by:
•higher volume in our Acetyl Chain segment for most of our products, primarily VAM, acid and downstream derivative products, as well as higher volume within our Engineered Materials segment for POM in Europe and Asia.
Operating profit decreased $720 million, or 50%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•a gain of $508 million recognized in September 2023 on the formation of the Nutrinova joint venture, which did not recur in the current year (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information);
•lower Net sales across our segments;
•higher accelerated depreciation expense of $72 million in our Engineered Materials segment, primarily related to the previously announced closure of our polymerization units in Uentrop, Germany and our facility in Mechelen, Belgium (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information); and
•an unfavorable impact of $70 million to Other (charges) gains, net, in our Engineered Materials segment, primarily related to restructuring costs for the previously announced closure of our facility in Mechelen, Belgium and an impairment loss on certain trade names, primarily Zytel®, arising from our annual indefinite-lived intangible assets impairment assessment (see Note 18 - Other (Charges) Gains, Net and Note 5 - Goodwill and Intangible Assets, Net in the accompanying unaudited interim consolidated financial statements for further information);
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partially offset by:
•lower raw materials costs in our Engineered Materials and Acetyl Chain segments; and
•lower merger and acquisition project spending of $34 million in our Other Activities segment.
Equity in net earnings (loss) of affiliates increased $107 million, or 214%, for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•an increase in earnings from our Mylar Specialty Films (formally DuPont Teijin Films) strategic affiliates of $57 million, primarily due to increased restructuring costs incurred in the nine months ended September 30, 2023, which did not recur in the current year; and
•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.
Our effective income tax rate for the nine months ended September 30, 2024 was 24% compared to a tax benefit of 20% for the same period in 2023. The higher effective income tax rate was primarily due to:
•prior period impacts that did not recur in the current year, including deferred tax benefits of $293 million resulting from the relocation of certain intangible assets to align with the foreign operations acquired in the M&M Acquisition, differences in the tax and U.S. GAAP gain resulting from the formation of the Nutrinova joint venture and decreases in valuation allowance on U.S. foreign tax credit carryforwards due to revised forecasts of foreign sourced income and expenses during the carryforward period; and
•non-recurring tax effects related to internal debt restructuring transactions in the current year.
See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Business Segments
Engineered Materials
Three Months Ended September 30, Change%
Change		Nine Months Ended September 30, Change%
Change
2024202320242023
(unaudited)
(In $ millions, except percentages)
Net sales1,481 1,528 (47)(3.1)%4,326 4,743 (417)(8.8)%
Net Sales Variance
Volume(1)%(3)%
Price(2)%(5)%
Currency— %(1)%
Other (charges) gains, net(60)(15)(45)(300.0)%(114)(44)(70)(159.1)%
Operating profit (loss)102 691 (589)(85.2)%329 961 (632)(65.8)%
Operating margin6.9 %45.2 %7.6 %20.3 %
Equity in net earnings (loss) of affiliates
44 8 36 450.0 %140 37 103 278.4 %
Depreciation and amortization
127 111 16 14.4 %395 335 60 17.9 %
Our Engineered Materials segment includes our engineered materials business and certain strategic affiliates. Our engineered materials business develops, produces and supplies a broad portfolio of high performance specialty polymers for automotive and medical applications, as well as industrial products and consumer electronics. Together with our strategic affiliates, our engineered materials business is a leading participant in the global specialty polymers industry.
The pricing of products within the Engineered Materials segment is primarily based on the value of the material we produce and is generally independent of changes in the cost of raw materials, but may be impacted during periods of inflation and increased
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costs. Therefore, in general, margins may expand or contract in response to changes in raw materials costs. We attempt to address increases in raw materials costs through appropriate pricing actions.
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Net sales decreased for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower pricing for most of our products, primarily due to product mix and competitive market dynamics; and
•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 for POM in Europe.
Operating profit decreased for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•a gain of $508 million recognized in September 2023 on the formation of the Nutrinova joint venture, which did not recur in the current year (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information);
•lower Net sales; and
•an unfavorable impact of $45 million to Other (charges) gains, net primarily related to an impairment loss on certain trade names, primarily Zytel®, arising from our annual indefinite-lived intangible assets impairment assessment and restructuring costs for the previously announced closure of our facility in Mechelen, Belgium (see Note 18 - Other (Charges) Gains, Net and Note 5 - Goodwill and Intangible Assets, Net in the accompanying unaudited interim consolidated financial statements for further information);
partially offset by:
•lower raw materials costs for most of our products.
Equity in net earnings (loss) of affiliates increased for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•an increase in earnings from our Mylar Specialty Films (formally DuPont Teijin Films) strategic affiliates of $24 million, primarily due to increased restructuring costs incurred in the three months ended September 30, 2023, which did not recur in the current year.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Net sales decreased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower pricing for most of our products, primarily due to product mix, competitive market dynamics and decreased energy surcharges;
•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 for POM in Europe and Asia; and
•an unfavorable currency impact, primarily resulting from a weaker JPY and CNY relative to the U.S. dollar.
Operating profit decreased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•a gain of $508 million recognized in September 2023 on the formation of the Nutrinova joint venture, which did not recur in the current year (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information);
•lower Net sales;
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•higher accelerated depreciation expense of $72 million, primarily related to the previously announced closure of our polymerization units in Uentrop, Germany and our facility in Mechelen, Belgium (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information); and
•an unfavorable impact of $70 million to Other (charges) gains, net primarily related to restructuring costs for the previously announced closure of our facility in Mechelen, Belgium and an impairment loss on certain trade names, primarily Zytel®, arising from our annual indefinite-lived intangible assets impairment assessment (see Note 18 - Other (Charges) Gains, Net and Note 5 - Goodwill and Intangible Assets, Net in the accompanying unaudited interim consolidated financial statements for further information);
partially offset by:
•lower raw materials costs for most of our products; and
•lower spending of $64 million, primarily driven by a reduction in distribution and administrative costs.
Equity in net earnings (loss) of affiliates increased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•an increase in earnings from our Mylar Specialty Films (formally DuPont Teijin Films) strategic affiliates of $57 million, primarily due to increased restructuring costs incurred in the nine months ended September 30, 2023, which did not recur in the current year; and
•an increase in earnings from our Ibn Sina strategic affiliate, primarily as a result of higher MTBE volume and margin, partially offset by lower methanol sales volume.
Acetyl Chain
Three Months Ended September 30, Change%
Change		Nine Months Ended September 30, Change%
Change
2024202320242023
(unaudited)
(In $ millions, except percentages)
Net sales1,190 1,220 (30)(2.5)%3,653 3,703 (50)(1.4)%
Net Sales Variance
Volume1 %6 %
Price(3)%(7)%
Currency— %— %
Operating profit (loss)239 272 (33)(12.1)%735 845 (110)(13.0)%
Operating margin20.1 %22.3 % 20.1 %22.8 %
Dividend income - equity investments
30 30 — — %94 93 1 1.1 %
Depreciation and amortization
63 55 8 14.5 %181 163 18 11.0 %
Our Acetyl Chain segment, which includes the integrated chain of our intermediate chemistry, emulsion polymers, ethylene vinyl acetate polymers, redispersible powders and acetate tow businesses, is active in every major global industrial sector and serves diverse consumer end-use applications. These include conventional uses, such as paints, coatings, adhesives, and filter products, as well as other unique, high-value end uses including flexible packaging, thermal laminations, pharmaceuticals, wire and cable, and compounds. Together with our strategic affiliates, our Acetyl Chain businesses are leading producers and suppliers in multiple global industrial sectors.
The pricing of products within the Acetyl Chain is influenced by industry utilization rates and changes in the cost of raw materials. Therefore, in general, there is a directional correlation between these factors and our Net sales for most Acetyl Chain products. This impact to pricing typically lags changes in raw materials costs over months or quarters.
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Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Net sales decreased for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower pricing for most of our products, primarily acid, due to an environment with greater supply than demand during the three months ended September 30, 2024 and acetate tow due to demand-based pressures on certain pricing inputs;
partially offset by:
•higher volume, primarily for acetate tow and VAM in Europe.
Operating profit decreased for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower Net sales.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Net sales decreased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower pricing for our products, primarily in Europe and Asia, due to an environment with greater supply than demand during the nine months ended September 30, 2024;
partially offset by:
•higher volume for most of our products, primarily VAM, acid and downstream derivative products.
Operating profit decreased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower Net sales; and
•higher spending of $47 million, primarily as a result of increased plant operating and maintenance expenses, including costs at our new acetic acid unit at Clear Lake, Texas, and plant turnaround costs related to our joint venture, Fairway Methanol LLC;
partially offset by:
•lower raw materials and sourcing costs, primarily for carbon monoxide, methanol and ethanol.
Other Activities
Three Months Ended September 30, Change%
Change		Nine Months Ended September 30, Change%
Change
2024202320242023
(unaudited)
(In $ millions, except percentages)
Operating profit (loss)(93)(121)28 23.1 %(356)(378)22 5.8 %
Our Other Activities segment primarily consists of corporate center costs, including administrative activities such as finance, taxes, information technology and human resource functions, interest income and expense associated with financing activities and results of our captive insurance companies. The Other Activities segment also includes the components of net periodic benefit cost (interest cost, expected return on assets and net actuarial gains and losses) for our defined benefit pension plans and other postretirement plans not allocated to our business segments.
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Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
Operating loss decreased for the three months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower merger and acquisition project spending of $16 million; and
•a favorable currency impact.
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Operating loss decreased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to:
•lower merger and acquisition project spending of $34 million;
partially offset by:
•an unfavorable currency impact.
Liquidity and Capital Resources
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 September 30, 2024, we have $1.6 billion available for borrowing under our senior U.S. unsecured revolving credit facility and $64 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 $813 million as of September 30, 2024. Further, we entered into the November 2024 U.S. Term Loan Credit Agreement (defined below), which provides for a delayed-draw term loan due 364 days from the date of borrowing in an amount up to $1.0 billion. 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.
On February 29, 2024, we announced the intended closure of our facility in Mechelen, Belgium to optimize production costs across our global network. This operation is included in the Engineered Materials segment. We expect to incur additional exit and shutdown costs related to the closure of the facility of approximately $30 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.
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. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements.
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.
Our incurrence of debt to finance the purchase price for a majority of the Mobility & Materials business (the "M&M Business") acquired from DuPont de Nemours, Inc. in November 2022 (the "M&M Acquisition") has increased our leverage and our ratio of indebtedness to consolidated EBITDA as set forth in our senior unsecured credit facilities. We believe that cash flows from our operations, together with cash generation, synergy opportunities from the M&M Acquisition and cost reduction initiatives, will support our deleveraging efforts over the next few years. However, we expect the weakened demand environment, as discussed below, to continue to adversely impact our cash generation in the near-term. In furtherance of our deleveraging efforts, we have paused our share repurchase program and are in the process of evaluating additional cash generation or conservation opportunities. As part of this process, on November 4, 2024, we announced our intent to reduce our quarterly dividend by approximately 95 percent beginning in the first quarter of 2025. We will continue to evaluate our dividend policy,
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taking into account our ability to return to a balanced capital allocation strategy. Our deleveraging efforts may also include, in addition to the food ingredients joint venture described above, other opportunistic dispositions or monetization of other product or business lines or other assets.
While our contractual obligations, commitments and debt service requirements over the next several years are significant, we continue to believe we will have available resources to meet our liquidity requirements, including debt service, for the next 12 months. If our cash flow from operations is insufficient to fund our debt service and other obligations, we may be required to use other means available to us such as increasing our borrowings, reducing or delaying capital expenditures, seeking additional capital, reducing or pausing future dividend payments or seeking to restructure or refinance our indebtedness. There can be no assurance, however, that we will continue to generate cash flows at or above current levels.
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 is in construction and we are accelerating completion to meet demand 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 in line with demand growth. 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 planned expansion of our vinyl acetate ethylene ("VAE") emulsion plant in Frankfurt, Germany is in construction and on schedule for start-up in the second quarter of 2025. We continue to see the investments made in recent years strengthen the growth and reliability, while lowering the carbon footprint of our manufacturing network to best serve our customers.
On a stand-alone basis, Celanese and its immediate 100% owned subsidiary, Celanese U.S., have no independent external operations of their own. Accordingly, they generally depend on the cash flow of their subsidiaries and their ability to pay dividends and make other distributions to Celanese and Celanese U.S. in order to meet their obligations, including their obligations under senior credit facilities and senior notes, and to pay dividends on our Common Stock.
We are subject to capital controls and exchange restrictions imposed by the local governments in certain jurisdictions where we operate, such as China, South Korea, India and Indonesia. Capital controls impose limitations on our ability to exchange currencies, repatriate earnings or capital, lend via intercompany loans or create cross-border cash pooling arrangements. Our largest exposure to a country with capital controls is in China. Pursuant to applicable regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, the Chinese government imposes certain currency exchange controls on cash transfers out of China, puts certain limitations on duration, purpose and amount of intercompany loans, and restricts cross-border cash pooling. While it is possible that future tightening of these restrictions or application of new similar restrictions could impact us, these limitations do not currently restrict our operations.
We remain in compliance with the covenants in the Global Credit Agreements (defined below) and expect to remain in compliance based on our current expectation of future results of operations and planned cash generation activities. If the actual future results of our operations and cash generation activities differ materially from these expectations, we may be required to seek an amendment to or waiver of any impacted covenants, which may increase our borrowing costs under the Global Credit Agreements.
Cash Flows
Cash and cash equivalents decreased $992 million to $813 million as of September 30, 2024 compared to December 31, 2023. As of September 30, 2024, $695 million of the $813 million 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.
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•Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities decreased $597 million to $472 million for the nine months ended September 30, 2024 compared to net cash provided by operating activities of $1.1 billion for the same period in 2023, primarily due to:
•unfavorable trade working capital of $505 million, primarily due to inventory increases compared to prior year reductions; the timing of collections of trade receivables and settlement of trade payables during the nine months ended September 30, 2024; and
•a decrease in Net earnings, excluding the non-cash impacts of the gain of $508 million recognized on the formation of the Nutrinova joint venture during the nine months ended September 30, 2023 (see Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information) and deferred income taxes of $294 million.
•Net Cash Provided by (Used in) Investing Activities
Net cash used in investing activities increased $376 million to $342 million for the nine months ended September 30, 2024 compared to net cash provided by investing activities of $34 million for the same period in 2023, primarily due to:
•a cash inflow of $461 million recognized during the nine months ended September 30, 2023 related to 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), which did not recur in the current year;
partially offset by:
•a decrease of $110 million in capital expenditures during the nine months ended September 30, 2024.
•Net Cash Provided by (Used in) Financing Activities
Net cash used in financing activities decreased $92 million to $1.1 billion for the nine months ended September 30, 2024 compared to net cash used in financing activities of $1.2 billion for the same period in 2023, primarily due to:
•a decrease in payments on long-term debt, primarily due to our cash tender offer of $2.25 billion completed in August 2023, payment in full of delayed-draw term loans of $750 million and repayment at maturity of the 1.125% senior unsecured notes during the nine months ended September 30, 2023, that did not recur in the current year, partially offset by repayments at maturity of the 5.900% and 3.500% senior unsecured notes during the nine months ended September 30, 2024; and
•a decrease in net payments on short-term debt, primarily driven by a payment of $500 million on our March 2022 U.S. Term Loan Credit Agreement (defined below) during the nine months ended September 30, 2023, which did not recur in the current year and an increase in net proceeds on our revolving credit facilities of $46 million;
partially offset by:
•a decrease in proceeds of long-term debt, primarily due to the issuance of certain senior unsecured notes of $3.0 billion during the nine months ended September 30, 2023, that did not recur in the current year partially offset by current year borrowings on working capital loan facilities in China; and
•an increase in net payments on our China Working Capital Term Loan Agreement (defined below).
Debt and Other Obligations
•Senior Credit Facilities
In March 2022, we entered into a term loan credit agreement (as amended to date, the "March 2022 U.S. Term Loan Credit Agreement"), pursuant to which lenders provided a tranche of delayed-draw term loans due 5 years from issuance in an amount equal to $1.0 billion (the "5-year Term Loans").
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Also in March 2022, we entered into a new revolving credit agreement (as amended to date, the "U.S. Revolving Credit Agreement" and, together with the March 2022 U.S. Term Loan Credit Agreement the "U.S. Credit Agreements") consisting of a $1.75 billion senior unsecured revolving credit facility (with a letter of credit sublimit), maturing in 2027.
In August 2023, we amended certain covenants in the March 2022 U.S. Term Loan Credit Agreement to permit refinancing of certain senior notes without requiring a mandatory prepayment under the March 2022 U.S. Term Loan Credit Agreement.
On November 1, 2024, February 16, 2024 and February 21, 2023, we amended certain covenants in the U.S. Credit Agreements, including financial ratio maintenance covenants.
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").
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.
Also in January 2023, CSIT entered into a senior unsecured working capital loan contract for CNY800 million (the "China Working Capital Term Loan Agreement"), payable 12 months from withdrawal date and bearing interest at 0.5% less than certain interbank rates. The loan under the China Working Capital Term Loan Agreement was fully drawn in January 2023 and was fully repaid during the three months ended March 31, 2024.
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"). The loan under the CNC Working Capital Loan Agreement was fully drawn during the three months ended March 31, 2024.
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 partially drawn during the three months ended September 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.
On November 1, 2024, we entered into a senior unsecured term loan credit agreement (the "November 2024 U.S. Term Loan Credit Agreement"), pursuant to which the lenders provided a delayed-draw term loan due 364 days from the date of borrowing in an amount up to $1.0 billion. Amounts outstanding under the November 2024 U.S. Term Loan Credit Agreement will accrue interest at a rate equal to the Secured Overnight Financing Rate with an interest period of one or three months ("Term SOFR") plus a margin of 1.300% to 2.250% per annum, or the base rate plus a margin of 0.300% to 1.250%, in each case, based on our senior unsecured debt rating, subject to further changes based on such ratings. The commitments under the November 2024 U.S. Term Loan Credit Agreement will terminate by March 15, 2025. The loan under the November 2024 U.S. Term Loan Credit Agreement was not drawn prior to issuance date of this Form 10-Q.
There have been no material changes to our debt or other obligations described in our 2023 Form 10-K other than those disclosed above and in Note 7 - Debt in the accompanying unaudited interim consolidated financial statements.
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•Accounts Receivable Purchasing Facility
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 $1.2 billion and $1.4 billion of accounts receivable under this agreement for the nine months ended September 30, 2024 and year ended December 31, 2023, respectively, and collected $1.1 billion and $1.3 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $155 million were pledged by the SPE as collateral to the Purchasers as of September 30, 2024.
•Factoring and Discounting Agreements
We have factoring agreements in Europe, Singapore and China with financial institutions. We de-recognized $508 million and $423 million of accounts receivable under these factoring agreements for the nine months ended September 30, 2024 and year ended December 31, 2023, respectively, and collected $481 million and $407 million of accounts receivable sold under these factoring agreements during the same periods.
We have master discounting agreements (the "Master Discounting Agreements") with financial institutions in China to discount, on a non-recourse basis, banker's acceptance drafts, classified as accounts receivable. We received $83 million and $45 million from the accounts receivable transferred under the Master Discounting Agreements as of September 30, 2024 and December 31, 2023, respectively.
Covenants
The Company's material financing arrangements contain customary covenants, such as events of default and change of control provisions, and in the case of the U.S. Credit Agreements the maintenance of certain financial ratios (subject to adjustment following certain qualifying acquisitions and dispositions, as set forth in the U.S. Credit Agreements, as amended). Failure to comply with these covenants, or the occurrence of any other event of default, could result in acceleration of the borrowings and other financial obligations.
We are in compliance with the covenants in our material financing arrangements as of September 30, 2024.
See Note 7 - Debt in the accompanying unaudited interim consolidated financial statements for further information.
Guarantor Financial Information
We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933, as amended (collectively, the "Senior Notes"). The Senior Notes were issued by Celanese U.S. ("Issuer") and are guaranteed by Celanese Corporation ("Parent Guarantor") and the Subsidiary Guarantors (collectively the "Obligor Group"). See Note 7 - Debt in the accompanying unaudited interim consolidated financial statements for further information. The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor. The Subsidiary Guarantors are listed in Exhibit 22.1 to this Quarterly Report.
The Parent Guarantor and the Subsidiary Guarantors have guaranteed the Senior Notes on a full and unconditional, joint and several, senior unsecured basis. The guarantees are subject to certain customary release provisions, including that a Subsidiary Guarantor will be released from its respective guarantee in specified circumstances, including (i) the sale or transfer of all of its assets or capital stock; (ii) its merger or consolidation with, or transfer of all or substantially all of its assets to, another person; or (iii) its ceasing to be a majority-owned subsidiary of the Issuer in connection with any sale of its capital stock or other transaction. Additionally, a Subsidiary Guarantor will be released from its guarantee of the Senior Notes at such time that it ceases to guarantee the Issuer's obligations under the U.S. Credit Agreements (subject to the satisfaction of customary document delivery requirements). The obligations of the Subsidiary Guarantors under their guarantees are limited as necessary to prevent such guarantees from constituting a fraudulent conveyance or fraudulent transfer under applicable law.
The Parent Guarantor and the Issuer are holding companies that conduct substantially all of their operations through their subsidiaries, which own substantially all of our consolidated assets. The Parent Guarantor holds the stock of its immediate 100% owned subsidiary, the Issuer, but has no material consolidated assets. The principal source of cash to pay the Parent Guarantor's and the Issuer's obligations, including obligations under the Senior Notes and the guarantee of the Issuer's obligations under the U.S. Credit Agreements, is the cash that our subsidiaries generate from their operations. Each of the Subsidiary Guarantors and our non-guarantor subsidiaries is a distinct legal entity and, under certain circumstances, applicable
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country or state laws, regulatory limitations and terms of other debt instruments may limit our subsidiaries' ability to distribute cash to the Issuer and the Parent Guarantor.
For cash management purposes, we transfer cash among the Parent Guarantor, Issuer, Subsidiary Guarantors and non-guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. While the non-guarantor subsidiaries do not guarantee the Issuer's obligations under our outstanding debt, the transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest on the Senior Notes, the U.S. Credit Agreements, other outstanding debt, Common Stock dividends and Common Stock repurchases.
The summarized financial information of the Obligor Group is presented below on a combined basis after the elimination of: (i) intercompany transactions among such entities and (ii) equity in earnings from and investments in the non-guarantor subsidiaries. Transactions with, and amounts due to or from, non-guarantor subsidiaries and affiliates are separately disclosed.
Nine Months Ended
September 30, 2024
(In $ millions)
(unaudited)
Net sales to third parties1,388 
Net sales to non-guarantor subsidiaries854 
Total net sales2,242 
Gross profit421 
Earnings (loss) from continuing operations(498)
Net earnings (loss)(501)
Net earnings (loss) attributable to the Obligor Group(501)
As of
September 30,
2024		As of
December 31,
2023
(In $ millions)
(unaudited)
Receivables from non-guarantor subsidiaries558 787 
Other current assets2,064 2,245 
Total current assets2,622 3,032 
Goodwill536 536 
Other noncurrent assets3,195 3,289 
Total noncurrent assets3,731 3,825 
Current liabilities due to non-guarantor subsidiaries4,302 2,993 
Current liabilities due to affiliates9 6 
Other current liabilities2,276 1,940 
Total current liabilities6,587 4,939 
Noncurrent liabilities due to non-guarantor subsidiaries3,338 3,365 
Other noncurrent liabilities11,710 13,007 
Total noncurrent liabilities15,048 16,372 
Share Capital
On October 17, 2024, we declared a quarterly cash dividend of $0.70 per share on our Common Stock amounting to $76 million. The cash dividend will be paid on November 13, 2024 to holders of record as of October 30, 2024. As disclosed above, on November 4, 2024, we announced our intent to reduce our quarterly dividend by approximately 95 percent beginning in the first quarter of 2025.
There have been no material changes to our share capital described in our 2023 Form 10-K other than those disclosed above and in Note 10 - Shareholders' Equity in the accompanying unaudited interim consolidated financial statements.
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Contractual Obligations
We have not entered into any material off-balance sheet arrangements.
Except as otherwise described in this report, there have been no material revisions outside the ordinary course of business to our contractual obligations as described in our 2023 Form 10-K.
Tax Return Audits
Our tax returns have been under joint audit for the years 2013 through 2015 by the United States, Netherlands and Germany (the "Authorities"). The Company and the Authorities were unable to reach an agreement jointly and therefore the audits continued on a separate jurisdictional basis. In the fourth quarter of 2022, we concluded settlement discussions with the Dutch tax authority. In the third quarter of 2024, we concluded settlement discussions with the German tax authority related to the German transfer pricing audit. In addition, our income tax returns in Mexico are under audit for the year 2018, in Canada for the years 2016 through 2022, and in the United States for the years 2016 through 2020. In August 2023, we negotiated a partial settlement with the Mexico tax authority for its audit for the year 2018. The partial settlement did not have a material impact on income tax expense in the consolidated statements of operations for the year ended December 31, 2023. In September 2023, the Canadian tax authority opened tax audits for the years 2019 through 2022, and the audits are in the preliminary stages. The audit in the United States for the years 2016 through 2020 is in the data gathering phase.
As of September 30, 2024, we believe that an adequate provision for income taxes has been made for all open tax years related to the examinations by governmental authorities. However, the outcome of tax audits cannot be predicted with certainty. If any issues raised by the government authorities are resolved in a manner inconsistent with our expectations or we are unsuccessful in defending our positions, we could be required to adjust our provision for income taxes in the period such resolution occurs. If required, any such adjustments could be material to the statements of operations and cash flows in the period(s) recorded. See Note 11 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.
Business Environment
During the third quarter of 2024, we experienced challenging demand conditions across several end-markets, including rapid and acute downturns in the Western Hemisphere automotive and industrial end-markets, impacting our Engineering Materials segment, as well as persistent demand weakness in paints, coatings, and construction, impacting our Acetyl Chain segment. Demand conditions and incremental industry production capacity resulted in elevated industry competitive dynamics and continuing pricing pressure across end-markets. While the macroeconomic challenges we are facing are not unique to Celanese, we remain committed to identifying and implementing actions to improve long-term growth and value creation.
We expect demand conditions to temporarily worsen in the fourth quarter of 2024, as automotive and industrial end-markets react to recent dynamics by destocking, which we expect to be largely contained to the fourth quarter of 2024. We will also continue to closely monitor the impact of, and responses to, geopolitical effects on demand conditions and the supply chain.
Critical Accounting Policies and Estimates
Our unaudited interim consolidated financial statements are based on the selection and application of significant accounting policies. The preparation of unaudited interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amounts of Net sales, expenses and allocated charges during the reporting period. Actual results could differ from those estimates. However, we are not currently aware of any reasonably likely events or circumstances that would result in materially different results.
We describe our significant accounting policies in Note 2 - Summary of Accounting Policies, of the Notes to the Consolidated Financial Statements included in our 2023 Form 10-K. We discuss our critical accounting policies and estimates in MD&A in our 2023 Form 10-K.
Recent Accounting Pronouncements
See Note 2 - Recent Accounting Pronouncements in the accompanying unaudited interim consolidated financial statements included in this Quarterly Report for information regarding recent accounting pronouncements.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk for the Company has not changed materially from the foreign exchange, interest rate and commodity risks disclosed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk in our 2023 Form 10-K. See also Note 12 - Derivative Financial Instruments in the accompanying unaudited interim consolidated financial statements for further discussion of our market risk management and the related impact on the Company's financial position and results of operations.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based on that evaluation, as of September 30, 2024, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
Changes in Internal Control Over Financial Reporting
During the period covered by this report, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in legal and regulatory proceedings, lawsuits, claims and investigations incidental to the normal conduct of its business, relating to such matters as product liability, land disputes, insurance coverage disputes, contracts, employment, antitrust and competition, intellectual property, personal injury and other actions in tort, workers' compensation, chemical exposure, asbestos exposure, taxes, trade compliance, acquisitions and divestitures, claims of current and legacy shareholders, past waste disposal practices and release of chemicals into the environment. The Company is actively defending those matters where it is named as a defendant. Due to the inherent subjectivity of assessments and unpredictability of outcomes of legal proceedings, the Company's litigation accruals and estimates of possible loss or range of possible loss may not represent the ultimate loss to the Company from legal proceedings. See Note 9 - Environmental and Note 14 - Commitments and Contingencies in the accompanying unaudited interim consolidated financial statements for a discussion of material environmental matters and material commitments and contingencies related to legal and regulatory proceedings. There have been no significant developments in the "Legal Proceedings" described in our 2023 Form 10-K other than those disclosed in Note 9 - Environmental and Note 14 - Commitments and Contingencies in the accompanying unaudited interim consolidated financial statements. See Part I - Item 1A. Risk Factors of our 2023 Form 10-K for certain risk factors relating to these legal proceedings.
Item 1A. Risk Factors
In addition to the information in this Quarterly Report, readers should carefully consider the information in Part I, Item 1A. Risk Factors of our 2023 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We did not repurchase any Common Stock during the three months ended September 30, 2024. As of September 30, 2024, our Board of Directors had authorized the repurchase of $6.9 billion of our Common Stock since February 2008, with approximately $1.1 billion value of shares remaining that may be purchased under the program. See Note 10 - Shareholders' Equity in the accompanying unaudited interim consolidated financial statements for further information.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
(c) Trading Plans
or any Rule 10b5-1 trading plans or "non-Rule 10b5-1 trading arrangements" as defined in Item 408 of Regulation S-K.
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Item 6. Exhibits(1)
Exhibit
Number
Description
3.1
3.1(a)
3.1(b)
3.1(c)
3.1(d)
3.2
10.1
10.2
10.3
22.1*
31.1*
31.2*
32.1*
32.2*
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.
104The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 has been formatted in Inline XBRL.
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*    Filed herewith.

(1)The Company and its subsidiaries have in the past issued, and may in the future issue from time to time, long-term debt. The Company may not file with the applicable report copies of the instruments defining the rights of holders of long-term debt to the extent that the aggregate principal amount of the debt instruments of any one series of such debt instruments for which the instruments have not been filed has not exceeded or will not exceed 10% of the assets of the Company at any pertinent time. The Company hereby agrees to furnish a copy of any such instrument(s) to the SEC upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CELANESE CORPORATION
By: /s/ LORI J. RYERKERK
Lori J. Ryerkerk
Chair of the Board of Directors,
Chief Executive Officer and President
Date:November 12, 2024

By: /s/ CHUCK B. KYRISH
Chuck B. Kyrish
Senior Vice President and
Chief Financial Officer
Date:November 12, 2024
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