Celanese(US:CE)2025-05-05 21:06Non-US GAAP Financial Measures and Supplemental Information This report provides supplemental financial information and reconciles non-US GAAP measures to their US GAAP counterparts, offering additional insights into the company's performance Introduction and Definitions This section defines key non-GAAP financial measures and explains their importance for assessing the company's performance and internal planning - The company presents its business in two segments: Engineered Materials and the Acetyl Chain4 - Management discloses non-GAAP financial measures as supplemental information for investors, believing them to be important for assessing financial results and comparing periods, and should be viewed as supplemental to US GAAP measures6 - The report provides definitions for key non-GAAP measures including: Adjusted EBIT, Operating EBITDA, Adjusted Gross Profit, Adjusted Earnings Per Share, Free Cash Flow, Net Debt, and Return on Invested Capital (Adjusted)91115 - The company does not provide forward-looking reconciliations for non-GAAP measures like Adjusted EBIT or Free Cash Flow due to the difficulty in forecasting certain items like mark-to-market pension gains or working capital changes111215 Financial Performance and Reconciliations This section presents detailed unaudited financial tables reconciling US GAAP measures to non-GAAP metrics, covering key performance indicators and segment-level data Table 1: Adjusted EBIT and Operating EBITDA Reconciliation This table reconciles Net Earnings to Adjusted EBIT and Operating EBITDA, showing Q1 2025 Adjusted EBIT of $234 million and Operating EBITDA of $414 million Reconciliation of Net Earnings to Adjusted EBIT and Operating EBITDA (In $ millions) | Measure | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Net earnings (loss) attributable to Celanese Corporation | (21) | (1,522) | (1,914) | | Certain Items attributable to Celanese Corporation | 43 | 2,009 | 1,696 | | Adjusted EBIT | 234 | 1,648 | 333 | | Depreciation and amortization expense | 180 | 728 | 184 | | Operating EBITDA | 414 | 2,376 | 517 | Table 2: Supplemental Segment Data and Reconciliation This table provides segment-level Adjusted EBIT and Operating EBITDA, with Engineered Materials reporting $126 million Adjusted EBIT and Acetyl Chain $168 million in Q1 2025 Segment Adjusted EBIT (In $ millions) | Segment | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Engineered Materials | 126 | 859 | 156 | | Acetyl Chain | 168 | 1,102 | 253 | | Other Activities | (60) | (313) | (76) | | Total | 234 | 1,648 | 333 | Segment Operating EBITDA (In $ millions) | Segment | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Engineered Materials | 235 | 1,296 | 270 | | Acetyl Chain | 229 | 1,346 | 316 | | Other Activities | (50) | (266) | (69) | | Total | 414 | 2,376 | 517 | Table 2a: Adjusted Gross Profit Reconciliation This table reconciles Gross Profit to Adjusted Gross Profit for the Engineered Materials segment, showing $1,356 million Adjusted Gross Profit for 2024 Engineered Materials Adjusted Gross Profit (In $ millions) | Description | 2024 | 2021 | | :--- | :--- | :--- | | Gross profit | 1,236 | 1,670 | | Certain Items | 120 | 27 | | Adjusted gross profit | 1,356 | 1,697 | - The $120 million in "Certain Items" for 2024 included $115 million for exit and shutdown costs and $3 million for mergers, acquisitions, and dispositions23 Table 3 & 3a: Adjusted Earnings per Share and Tax Rate Reconciliation These tables reconcile GAAP earnings per share to Adjusted EPS, reporting $0.57 Adjusted EPS for Q1 2025 and an adjusted effective tax rate of 9% for 2025 Adjusted Earnings Per Share Reconciliation | Description | Q1 '25 (per share) | 2024 (per share) | Q4 '24 (per share) | | :--- | :--- | :--- | :--- | | Earnings (loss) from continuing operations | (0.15) | (13.86) | (17.45) | | Adjusted earnings (loss) from continuing operations | 0.57 | 8.37 | 1.45 | Adjusted Tax Rate Reconciliation (In percentages) | Description | Estimated 2025 | Actual 2024 | | :--- | :--- | :--- | | US GAAP annual effective tax rate | 20 | (51) | | Adjustments | (11) | 60 | | Adjusted tax rate | 9 | 9 | Table 4, 4a, 4b, & 4c: Net Sales Analysis This section analyzes net sales by segment, with total net sales of $2,389 million in Q1 2025, showing a 1% sequential increase and a 9% year-over-year decrease Net Sales by Segment (In $ millions) | Segment | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Engineered Materials | 1,287 | 5,607 | 1,281 | | Acetyl Chain | 1,116 | 4,763 | 1,110 | | Total Net sales | 2,389 | 10,280 | 2,370 | - Sequential Change (Q1'25 vs Q4'24): Total sales increased 1%, driven by a 2% increase in volume, partially offset by a 1% negative currency impact29 - Year-over-Year Change (Q1'25 vs Q1'24): Total sales decreased 9%, driven by a 5% decrease in volume and a 3% decrease in price34 - Full Year Change (2024 vs 2023): Total sales decreased 6%, driven by a 4% decrease in price and a 1% decrease in volume39 Table 5: Free Cash Flow Reconciliation This table reconciles net cash from operating activities to free cash flow, reporting a negative free cash flow of ($73) million in Q1 2025 Free Cash Flow Reconciliation (In $ millions) | Description | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | 37 | 966 | 494 | | Capital expenditures on property, plant and equipment | (102) | (435) | (105) | | Contributions from/(Distributions) to NCI | (8) | (33) | (8) | | Free cash flow | (73) | 498 | 381 | Table 6: Cash Dividends Received This table details cash dividends received from equity investments, totaling $32 million in Q1 2025 Cash Dividends Received (In $ millions) | Description | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Dividends from equity method investments | 31 | 160 | 38 | | Dividends from other equity investments | 1 | 128 | 33 | | Total | 32 | 288 | 71 | Table 7: Net Debt Reconciliation This table reconciles total debt to net debt, showing net debt of $11,833 million at the end of Q1 2025 Net Debt Calculation (In $ millions) | Description | Q1 '25 | Q4 '24 | | :--- | :--- | :--- | | Total debt | 12,784 | 12,579 | | Cash and cash equivalents | (951) | (962) | | Net debt | 11,833 | 11,617 | Table 8: Certain Items This table details "Certain Items" excluded from non-GAAP measures, totaling $43 million in Q1 2025, primarily from exit and shutdown costs Breakdown of Certain Items (In $ millions) | Item | Q1 '25 | 2024 | Q4 '24 | | :--- | :--- | :--- | :--- | | Exit and shutdown costs | 32 | 236 | 47 | | Asset impairments | — | 1,638 | 1,601 | | Mergers, acquisitions and dispositions | 5 | 80 | 12 | | Other Items | 6 | 55 | 36 | | Total Certain Items | 43 | 2,009 | 1,696 | - The significant asset impairment in Q4 2024 and full year 2024 was related to goodwill and certain tradenames, primarily Zytel®, arising from impairment tests45 Table 9: Return on Invested Capital (Adjusted) This table calculates the Return on Invested Capital (Adjusted) for 2024, which was 7.8% based on tax-effected adjusted EBIT Return on Invested Capital (Adjusted) - 2024 | Metric | Value | | :--- | :--- | | Adjusted EBIT tax effected | $1,500 million | | Average Invested capital | $19,265 million | | Return on invested capital (adjusted) | 7.8% | | Net earnings (loss) as a % of invested capital | (7.9)% |