Dear Celanese Shareholders,
In the second half of 2019, not long after I joined
Celanese, we set out to refresh our strategy. It was an
opportunity to critically review and refresh our strategy
and a perfect way for me to learn what really makes
Celanese successful.
What defines Celanese and, I believe, what makes us
unique was clear. We are an active organization.
Employees are agile. Decisions are made quickly. Teams
continuously optimize. There is no organization I have
observed across my career that is better at moving
collectively and collaboratively at speed. It was also
clear to me that we had a tremendous opportunity to
multiply the shareholder value we create through that
effort.
We started to share the results of our strategic refresh
across 2020. We formally presented it at our Investor
Day in March 2021, under the theme Multiplying our
Momentum. We had given a lot of thought to the
meaning packed into those three words.
Personally, momentum took me back to some of my first
courses as a young engineering student at Iowa State
University.
𝑝 (cid:3404) 𝑚𝑣
Momentum (cid:4666)𝑝(cid:4667) is the product of mass and velocity.
Momentum has movement. It has direction. It builds on
itself. As it grows, it becomes more resistant to
deviation by external forces. At Celanese, we have
always looked to build momentum. This simple formula
helps to frame some of my first observations of
Celanese.
Celanese really embodies the second half of the formula:
velocity. Movement. Action. Agility. Optionality.
Optimization. Execution. We demonstrate this quality in
our productivity programs, pricing actions, business
models, and in how we respond to external challenges
each day. No one does better with what they have than
our amazing Celanese team.
The first half of the formula was where I saw the
opportunity in 2019. At the time I referred to it as
“building our base,” a phrase I brought from many years
as a manufacturing leader. Simply, it is about building
mass. For a company as active and dynamic as Celanese,
there is a multiplicative effect if we can strategically
build our mass as well.
Let me be clear. Mass is not simply size. It also has depth,
breadth, and density. For Celanese, it represents things
like our business portfolio, production and supply chain
networks, joint ventures, leadership positions, systems,
product portfolios, technology, and, of course, people.
It is the base from which our actions drive shareholder
value. I challenged our teams in 2019 to “build our base.”
Let me highlight some of the ways we have
accomplished this over the last few years.
in areas
We built targeted growth programs in Engineered
Materials (EM)
like medical, electric
vehicles, 5G, and sustainability. We brought in
resources and built our solutions portfolio for each.
We are a global materials leader in these rapidly
growing areas.
limited control,
We established more control over our earnings. We
monetized our stake in Polyplastics, a JV where we
for $1.575 billion. We
had
restructured our KEPCO JV to a manufacturing
entity for greater commercial control of the product.
We extended the Acetyl Chain’s (AC) leading chain
further
the acquisition of Elotex
It has enhanced our
of
downstream with
redispersible powders.
optionality in a way that far exceeds its size.
integrated products one
step
We transformed Celanese into the preeminent
global specialty materials company with the
acquisitions of Santoprene and Mobility & Materials.
Our preeminence spans flagship brands, breadth of
polymer solutions, backward integration, global
footprint, and leadership positions.
We completed a strategic overhaul of our acetate
flake and tow products and folded them into AC.
The power of AC’s integrated product model is
enhanced as are the earnings contribution from
flake and tow.
We are nearly complete building a second world‐
scale acetic acid production unit at our Clear Lake
facility. That facility was built for a fraction of
competitor cost and will significantly enhance AC’s
leadership
also
systematically executed on a number of smaller
projects across the AC network to enhance our
manufacturing capacity and flexibility.
position. We
have
cost
We executed a number of capital efficient EM
investments including a sold‐out expansion of GUR
to meet EV growth as well as continued localization
of our footprint in Asia.
We have elevated our ESG leadership in a way that
creates shareholder value. We have launched a
portfolio of bio‐based products that span EM and
AC. We have developed new bio‐based products
using our acetate flake. We are in the final stages of
completing a Fairway Methanol capacity expansion
that will utilize Clear Lake’s vented process CO2 to
produce green methanol.
We continue to invest in the digitalization of our
plants, our customer experience, and our back
office automation while strengthening our
IT
foundation through cloud infrastructure, 5G, and
cyber security enhancements.
We continue to strengthen a diverse and inclusive
culture at Celanese and are attracting, retaining,
and promoting more talent then ever before.
I thank our team for delivering against the strategy we
developed a few years ago. These actions we have taken
to “build our base” multiply the impact of our day to day
efforts and will support our growth for years to come.
Celanese remains an action‐oriented and agile company
at heart. I am committed to continuing that legacy.
Because of our work over the last few years, we have
opened more opportunities to create shareholder value
than at any time in our history. Over the coming
quarters you will hear much more about our actions
underway to deliver against those opportunities.
investment
I thank you for the trust you place in our team through
your
in Celanese and reiterate our
commitment as an organization to multiply our
momentum.
Sincerely,
Lori Ryerkerk
Chair of the Board and Chief Executive Officer
This letter includes forward‐looking statements. For more information about the risks associated with forward‐looking statements, please
see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the
accompanying Annual Report on Form 10‐K, which follows.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________________
Form 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Commission File Number) 001-32410
CELANESE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation or Organization)
98-0420726
(I.R.S. Employer Identification No.)
222 W. Las Colinas Blvd., Suite 900N
Irving, TX 75039-5421
(Address of Principal Executive Offices and zip code)
(972) 443-4000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of Each Class
Common Stock, par value $0.0001 per share
1.125% Senior Notes due 2023
1.250% Senior Notes due 2025
4.777% Senior Notes due 2026
2.125% Senior Notes due 2027
0.625% Senior Notes due 2028
5.337% Senior Notes due 2029
Trading Symbol(s)
CE
CE /23
CE /25
CE /26A
CE /27
CE /28
CE /29A
Name of Each Exchange on Which Registered
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
Large accelerated Filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☑
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the registrant's common stock held by non-affiliates as of June 30, 2022 (the last business day of the registrants' most
recently completed second fiscal quarter) was $12,713,879,912.
The number of outstanding shares of the registrant's common stock, $0.0001 par value, as of February 10, 2023 was 108,474,128.
Certain portions of the registrant's Definitive Proxy Statement relating to the 2023 annual meeting of shareholders, to be filed with the Securities and
Exchange Commission, are incorporated by reference into Part III.
DOCUMENTS INCORPORATED BY REFERENCE
Table of Contents
CELANESE CORPORATION
Form 10-K
For the Fiscal Year Ended December 31, 2022
TABLE OF CONTENTS
Special Note Regarding Forward-Looking Statements ..................................................................................................
3
Page
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART I
Business ...............................................................................................................................................
Risk Factors ..........................................................................................................................................
Unresolved Staff Comments ................................................................................................................
Properties .............................................................................................................................................
Legal Proceedings ................................................................................................................................
Mine Safety Disclosures ......................................................................................................................
Information about our Executive Officers ...........................................................................................
PART II
Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities ..................................................................................................................................
Reserved ...............................................................................................................................................
Management's Discussion and Analysis of Financial Condition and Results of Operations ...............
Quantitative and Qualitative Disclosures About Market Risk .............................................................
Financial Statements and Supplementary Data ....................................................................................
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ..............
Controls and Procedures ......................................................................................................................
Other Information ................................................................................................................................
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .................................................
PART III
Directors, Executive Officers and Corporate Governance ...................................................................
Executive Compensation ......................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters .................................................................................................................................................
Certain Relationships and Related Transactions, and Director Independence ....................................
Principal Accounting Fees and Services ..............................................................................................
PART IV
Exhibits and Financial Statement Schedules .......................................................................................
Item 15.
Signatures .......................................................................................................................................................................
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29
29
30
30
32
33
34
49
49
49
50
50
50
51
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Table of Contents
Special Note Regarding Forward-Looking Statements
Certain statements in this Annual Report on Form 10-K ("Annual Report") or in other materials we have filed or will file with
the Securities and Exchange Commission ("SEC"), and incorporated herein by reference, are forward-looking in nature as
defined in Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do
not relate to matters of a strictly factual or historical nature and generally discuss or relate to forecasts, estimates or other
expectations regarding future events. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project,"
"plan," "may," "can," "could," "might," "will" and similar expressions identify forward-looking statements, including
statements that relate to such matters as planned and expected capacity increases and utilization rates; anticipated capital
spending; environmental matters; legal proceedings; sources of raw materials and exposure to, and effects of hedging of raw
material and energy costs and foreign currencies; interest rate fluctuations; global and regional economic, political, business and
regulatory conditions; expectations, strategies, and plans for individual assets and products, business segments, as well as for
the whole Company; cash requirements and uses of available cash; financing plans; pension expenses and funding; anticipated
restructuring, divestiture, and consolidation activities; planned construction or operation of facilities; cost reduction and control
efforts and targets and integration of acquired businesses.
Forward-looking statements are not historical facts or guarantees of future performance but instead represent only our beliefs at
the time the statements were made regarding future events, which are subject to significant risks, uncertainties, and other
factors, many of which are outside of our control and certain of which are listed above. Any or all of the forward-looking
statements included in this Annual Report and in any other materials incorporated by reference herein may turn out to be
materially inaccurate. This can occur as a result of incorrect assumptions, in some cases based upon internal estimates and
analyses of current market conditions and trends, management plans and strategies, economic conditions, or as a consequence
of known or unknown risks and uncertainties. Many of the risks and uncertainties mentioned in this Annual Report, such as
those discussed in Item 1A. Risk Factors, Item 3. Legal Proceedings and Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations will be important in determining whether these forward-looking statements
prove to be accurate. Consequently, neither our shareholders nor any other person should place undue reliance on our forward-
looking statements and should recognize that actual results may differ materially from those anticipated by us.
All forward-looking statements made in this Annual Report are made as of the date hereof, and the risk that actual results will
differ materially from expectations expressed in this Annual 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. However, we may make further disclosures regarding
future events, trends and uncertainties in our subsequent reports on Forms 10-K, 10-Q and 8-K to the extent required under the
Exchange Act. The above cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our
business includes factors we believe could cause our actual results to differ materially from expected and historical results.
Other factors beyond those listed above or in Item 1A. Risk Factors, Item 3. Legal Proceedings and Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations below, including factors unknown to us and factors
known to us which we have determined not to be material, could also adversely affect us.
3
Table of Contents
Item 1. Business
Basis of Presentation
In this Annual Report on Form 10-K, the term "Celanese" refers to Celanese Corporation, a Delaware corporation, and not its
subsidiaries. The terms "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.
Industry
This Annual Report on Form 10-K includes industry data obtained from industry publications and surveys, as well as our own
internal company surveys. Third-party industry publications, surveys and forecasts generally state that the information
contained therein has been obtained from sources believed to be reliable.
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,
consumer and medical, energy storage, filtration, food and beverage, paints and coatings, paper and packaging, performance
industrial 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.
Celanese's history began in 1918, the year that its predecessor company, The American Cellulose & Chemical Manufacturing
Company, was incorporated. The company, which manufactured cellulose acetate, was founded by Swiss brothers Drs. Camille
and Henri Dreyfus. The current Celanese was incorporated in 2004 under the laws of the State of Delaware and is a U.S.-based
public company traded on the New York Stock Exchange under the ticker symbol CE.
Headquartered in Irving, Texas, our operations are primarily located in North America, Europe and Asia and consist of 61
global production facilities and an additional 19 strategic affiliate production facilities. As of December 31, 2022, we employed
13,263 people worldwide.
Business Segment Overview
Effective December 31, 2022, we reorganized our operating and reportable segments to align with recent structural and
management reporting changes. The change reflects the resegmentation of the former Acetate Tow operating and reportable
segment into the Acetyl Chain operating and reportable segment. This reorganization reflects the culmination of a shift in
operating strategy and organizational hierarchy, with a focus on integration, collaboration and maximization of value creation
through its global optionality and integrated chain model of the underlying businesses.
We operate principally through two business segments: Engineered Materials and the Acetyl Chain. See Business Segments in
this Item 1. Business and Note 21 - Segment Information and Note 22 - Revenue Recognition in the accompanying consolidated
financial statements for further information.
4
Major End-Use
Applications
• Automotive
• Medical
• Industrial
• Energy storage
• Consumer electronics
• Appliances
• Construction
• Filtration equipment
• Telecommunications
• Beverages
• Baked goods
• Electrical
• Mobility
• Connectivity
Table of Contents
Business Segments
Engineered Materials
Products
• Nylon compounds or
formulations
• High temperature nylons
("HTN")
• Polyoxymethylene
("POM")
• Polyethylene terephthalate
("PET")
• Polybutylene terephthalate
("PBT")
• Ultra-high molecular
weight polyethylene
("UHMW-PE")
• Long-fiber reinforced
thermoplastics ("LFRT")
• Liquid crystal polymers
("LCP")
• Thermoplastic copolyesters
("TPC")
• Thermoplastic vulcanizates
("TPV")
• Polypropylene compounds
or formulations
• Polyphenylene sulfide
("PPS")
• Ethylene acrylic elastomers
("EAE")
•
Overview
Principal Competitors
• Anhui Jinhe Industrial Co.,
Ltd.
• Ascend Performance
Materials LLC
• BASF SE
• Daicel Corporation
("Daicel")
• DOMO Chemicals
• E. I. du Pont de Nemours
and Company
• Kingfa Science and
Technology
• Koninklijke DSM N.V.
• Korea Petrochemical Ind.
Co, Ltd ("KPIC")
• SABIC Innovative Plastics
• Solvay S.A.
Other regional competitors:
• Asahi Kasei Corporation
• Braskem S.A.
• Lanxess AG
• Mitsubishi Gas Chemical
Company, Inc.
• Sumitomo Corporation
• Teijin Limited
• Toray Industries, Inc.
Key Raw Materials
• HMD
• Adipic acid
• Formaldehyde
• DMT
• BDO
• Ethylene
• Fiberglass
• Polypropylene
• Acetic anhydride
• Propylene
• Ethylene propylene diene
monomer
• Base Oil
• PA6
• PA66
• Para-dichlorobenzene
• Diketene
• TPEE
• PTMEG
• Flame Retardants
• DDDA
• PTA
• Methyl acrylate
• Precious metals
• PET
Our Engineered Materials segment includes our engineered materials business, our food ingredients business and certain
strategic affiliates. The engineered materials business leverages our leading project pipeline model to more rapidly
commercialize projects. Our unique approach is based on deep customer engagement to develop new projects that are aligned
with our skill domains to address critical customer needs and ensure our success and growth.
Engineered Materials is a project-based business where growth is driven by increasing new project commercializations from the
pipeline. Our project pipeline model leverages competitive advantages that include our global assets and resources, marketplace
presence, broad materials portfolio and differentiated capabilities. Our global assets and resources are represented by our
operations, including polymerization, compounding, research and development, and customer technology centers in all regions
of the world, including Argentina, Belgium, Brazil, Canada, China, Germany, India, Italy, Japan, Luxembourg, Mexico, South
Korea, Switzerland, Taiwan, the United Kingdom and the U.S., along with sites associated with our 16 strategic affiliates in
China, Germany, Japan, Luxembourg, Netherlands, Saudi Arabia, South Korea, United Kingdom and the U.S.
In July 2020, we announced that we are establishing a European Compounding Center of Excellence at our Forli, Italy facility,
which includes the intended consolidation of our compounding operations in Kaiserslautern, Germany; Wehr, Germany; and
Ferrara Marconi, Italy. These operations are included in our Engineered Materials segment. We expect to complete the
consolidation of the compounding operations in 2023.
On November 1, 2022, we acquired a majority of the Mobility & Materials business (the "M&M Business") of DuPont de
Nemours, Inc. ("DuPont") pursuant to a definitive transaction agreement entered into on February 17, 2022 by us, DuPont and
an affiliate of DuPont (the "M&M Acquisition"). The M&M Acquisition was completed for a purchase price of $11.0 billion,
subject to transaction adjustments. The M&M Business is a leading global producer of engineering thermoplastics and
elastomers serving a variety of end-uses including automotive, electrical and electronics, consumer goods and industrial
5
Table of Contents
applications. The acquired M&M Business product portfolio includes numerous specialty materials with global leadership
positions in nylons, specialty nylons polyesters and elastomers. See Note 4 - Acquisitions, Dispositions and Plant Closures in
the accompanying consolidated financial statements for further information.
Our broad marketplace presence reflects our deep understanding of global and customer trends, including the growing global
demand for more sophisticated vehicles, elevated environmental considerations, increased global connectivity, and improved
health and wellness. These global trends drive a range of needed customer solutions, such as vehicle lightweighting, precise
components, aesthetics and appearance, low emissions, heat resistance and low-friction for medical applications, that we are
uniquely positioned to address with our materials portfolio. In addition, the opportunity pipeline process identifies a number of
emerging trends early, enabling faster growth.
Our materials portfolio offers differentiated chemical and physical properties that enable them to perform in a variety of
conditions. These include enduring a wide range of temperatures, resisting adverse chemical interactions and withstanding
deformation. Nylon compounds are used in a range of applications including automotive, consumer, electrical, electronic and
industrial. These value-added applications in diverse end uses support the business' global growth objectives. POM, PBT and
LFRT are used in a broad range of performance-demanding applications, including fuel system components, automotive safety
systems, consumer electronics, appliances, industrial products and medical applications. UHMW-PE is used in battery
separators, industrial products, filtration equipment, coatings and medical applications. Primary end uses for LCP are electrical
applications or products and consumer electronics. Thermoplastic elastomers offer unique attributes for use in automotive,
appliances, consumer goods, electrical, electronic and industrial applications.
We also have several differentiated polymer technologies designed for the utility industry, the oil and gas industry, original
equipment manufacturers and companies that enhance supply chain efficiency. These include composite technologies for the
utility industry that deliver greater reliability, capacity and performance for utility transmission lines.
Our differentiated capabilities are highlighted in our intimate and unique customer engagement which allows us to work across
the entirety of our customers' value chain. For example, in the automotive industry we work with original equipment
manufacturers as well as system and tier suppliers and injection molders in numerous areas, including polymer formulation and
functionality, part and structural design, mold design, color development, part testing and part processing. This broad access
allows us to create a demand pull for our solutions. This business segment also includes 16 strategic affiliates that complement
our global reach, improve our ability to capture growth opportunities in emerging economies and positions us as a leading
participant in the global specialty polymers industry.
•
Key Products
Nylon. Our nylon products include Nylfor® A (PA 6.6), Nylfor® B (PA 6), NILAMID® (PA 6, PA 66, PPA), FRIANYL®
(flame retardant PA 6, PA 66, PPA compounds), ECOMID® (recycled polyamide), Zytel® (PA, PA 6, PA 66, PA 610, PA 612),
Zytel® HTN (PPA) and Zytel® LCPA (long-chain polyamide) and are used in automotive, appliances, electrical, medical,
industrial and consumer applications due to their mechanical properties, dimensional stability, high impact resistance, resistance
to organic solvents, high wear and fatigue resistance even at high temperatures, and easy processing and molding.
POM. Commonly known as polyacetal in the chemical industry, POM is sold by our engineered materials business under the
trademarks Celcon®, Hostaform® and Tarnoform®. POM is used for diverse end-use applications in the automotive, industrial,
consumer and medical industries. These applications include mechanical parts in automotive fuel system components and
window lift systems, water handling, conveyor belts, sprinkler systems, drug delivery systems and gears in large and small
home appliances.
We continue to innovate and broaden the portfolio of Celcon®, Hostaform® and Tarnoform® in order to support the industry
needs for higher performing polyacetal. We have expanded our portfolio to include products with higher impact resistance and
stiffness, low emissions, improved wear resistance and enhanced appearance such as laser marking and metallic effects. We
launched POM ECO-B, a sustainable polyacetal, which allows customers to realize reduction in carbon dioxide emissions in
their end-use products and advance toward their renewable content goals.
Korea Engineering Plastics Co., Ltd., our 50%-owned strategic affiliate, manufactures POM and other engineering resins in the
Asia-Pacific region. For further discussion, see Strategic Affiliates in this Item 1. Business.
National Methanol Company, our 25% owned strategic affiliate, produces methanol which is a key feedstock for POM
production. Its production facilities are located in Saudi Arabia. For further discussion, see Strategic Affiliates in this Item 1.
Business.
6
Table of Contents
The primary raw material for POM is formaldehyde, which is manufactured from methanol. Raw materials are sourced from
internal production and from third parties, generally through long-term contracts.
Polyesters. Our products include a series of thermoplastic polyesters including Celanex® PBT, Crastin® PBT, Melinex®, Mylar®
and Thermx® PCT (polycyclohexylene-dimethylene terephthalate), as well as Rynite® PET, a polyester resin. These products
are used in a wide variety of automotive, electrical, medical, industrial and consumer applications, including ignition system
parts, radiator grilles, electrical switches, medical devices, insulation, photovoltaic panels, critical energy components,
appliance and sensor housings, light emitting diodes and technical fibers.
UHMW-PE. Celanese is a global leader in UHMW-PE products, which are sold under the GUR® trademark. They are highly
engineered thermoplastics designed for a variety of industrial, consumer and medical applications. Primary applications for the
material include lead acid battery separators, heavy machine components, lithium ion separator membranes, and noise and
vibration dampening tapes. Several specialty grades are also produced for applications in high performance filtration
equipment, ballistic fibers, thermoplastic and elastomeric additives, as well as medical implants.
LFRT. Celstran® and Factor®, our LFRT products, impart extra strength and stiffness, making them more suitable for larger
parts than conventional thermoplastics. These products are used in automotive, transportation and industrial applications, such
as instrument panels, consoles and front end modules. LFRTs meet a wide range of end-user requirements and are excellent
candidates for metal replacement where they provide the required structural integrity with significant weight reduction,
corrosion resistance and the potential to lower manufacturing costs.
LCP. Vectra® and Zenite®, our LCP brands, are primarily used in electrical and electronics applications for precision parts with
thin walls and complex shapes and applications requiring heat dissipation. They are also used in high heat cookware
applications.
TPE. Forprene®, Sofprene® T, Laprene® and Hytrel®, our TPE brands, are primarily used in automotive, construction,
appliances and consumer applications due to their ability to combine the advantages of both flexible and plastic materials.
These materials are selected for their ability to stretch and return to their near original shape creating a longer life and better
physical range than other materials.
TPV. SantopreneTM, DytronTM and GeolastTM, our TPV trademarks, are chemically cross-linked, high-performance materials
which leverage a unique combination of engineering thermoplastic and elastomer properties. These products are used in future
mobility, infrastructure, medical and sustainability applications.
Polypropylene. Our polypropylene products include Polifor® and Tecnoprene® and are primarily used in automotive,
appliances, electrical and consumer applications due to their high impact and fatigue resistance, exceptional rigidity at high
temperatures and an ability to withstand chemical agents.
VitalDose®. Our ethylene vinyl acetate ("EVA") copolymers, sold under the VitalDose® trademark, are an enabling technology
used for controlled-release drugs, medical implants and combination devices, including drug-eluting implants, reliable
controlled-release performance in subcutaneous and surgical implants, intravitreal and extraocular devices.
Elastomers. Vamac® EAE, our elastomer brand, is primarily used in variety of demanding automotive applications, including
electric and hybrid vehicle components. These materials can be formulated to provide excellent resistance to extreme
temperatures and fluids.
•
Customers
Engineered Materials' principal customers are original equipment manufacturers and their suppliers serving the automotive,
medical, industrial and consumer industries. We utilize our customer options mapping process to collaborate with our
customers to identify customized solutions that leverage our broad range of polymers and technical expertise. Our engineered
materials business has long-standing relationships through multi-year and annual arrangements with many of its major
customers and utilizes distribution partners to expand its customer base.
Because Engineered Materials is a project-based business focused on solutions, the pricing of products in this segment is
primarily based on the value-in-use and is generally independent of changes in the cost of raw materials. Therefore, in general,
margins may expand or contract in response to changes in raw material costs.
See Note 22 - Revenue Recognition in the accompanying consolidated financial statements for further information.
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Acetyl Chain
Products
• Acetic acid
• Vinyl acetate monomer
("VAM")
• Vinyl acetate ethylene
("VAE") emulsions
• Conventional emulsions
• Ethylene vinyl acetate
("EVA") resins and
compounds
• Low-density polyethylene
resins ("LDPE")
• Redispersible Powders
("RDP")
• Acetic anhydride
• Acetaldehyde
• Ethyl acetate
• Formaldehyde
• Butyl acetate
• Acetate tow
• Acetate flake
•
Overview
Major End-Use
Applications
• Paints
• Coatings
• Adhesives
• Textiles
• Paper finishing
• Flexible packaging
• Lamination products
• Pharmaceuticals
• Films
• Inks
• Plasticizers
• Solvents
• Automotive parts
• External thermal insulation
composite systems
• Tiling
• Plasters and renders
• Lubricants
• Filtration
Principal Competitors
Key Raw Materials
• Methanol
• Carbon monoxide
• Ethylene
• Acetic acid
• VAM
• VAE emulsions
• Conventional emulsions
• Acrylate esters
• Styrene
• Polyvinyl alcohol
• Wood pulp
• Acetic anhydride
• Arkema
• BASF SE
• Cerdia
• Chang Chun Petrochemical
Co., Ltd.
• Daicel
• Dairen Chemical
Corporation
• Dow Inc.
• Eastman Chemical
Company
• E. I. du Pont de Nemours
and Company
• ExxonMobil Chemical
• Huayi Chemical Co., Ltd.
• INEOS
• Jiangsu Sopo (Group) Co.,
Ltd.
• Kuraray Co., Ltd.
• LyondellBasell Industries
N.V.
• Nippon Gohsei
• Showa Denko K.K.
• Sipchem
• Wacker Chemie AG
The Acetyl Chain segment, which includes the integrated chain of intermediate chemistry, emulsion polymers, EVA polymers,
redispersible powders, and acetate tow businesses, is active in every major global industrial sector and serves diverse consumer
end-use applications. These include traditional vinyl-based end uses, such as paints and coatings and adhesives, as well as other
unique, high-value end uses including flexible packaging, thermal laminations, wire and cable, and compounds.
Our intermediate chemistry business produces and supplies acetyl products, including acetic acid, VAM, acetic anhydride and
acetate esters. These products are generally used as starting materials for colorants, paints, adhesives, coatings and
pharmaceuticals. Our intermediate chemistry business also produces organic solvents and intermediates for pharmaceutical,
agricultural and chemical products.
We have focused in recent years on enhancing our ability to drive incremental value through our global production network and
productivity initiatives as well as proactively managing the intermediate chemistry business in response to trade flows and
prevailing industry trends. Our intermediate chemistry business has production sites in China, Germany, Mexico, Singapore and
the U.S. We are a global industry leader, with a broad acetyls product portfolio, leading technology, low cost production
footprint and a global supply chain. With decades of experience, advanced proprietary process technology and favorable capital
and production costs, we are a leading global producer of acetic acid and VAM. AOPlus®3 technology extends our historical
technology advantage and enables us to construct a greenfield acetic acid facility with a capacity of 1.8 million metric tons at a
lower capital cost than our competitors. Our VAntage®2 technology could increase VAM capacity to meet growing customer
demand globally with minimal investment. We believe our production technology is among the lowest cost in the industry and
provides us with global growth opportunities through low cost expansions and a cost advantage over our competitors.
Our emulsion polymers business is a leading global producer of vinyl acetate-based emulsions and develops products and
application technologies to improve performance, create value and drive innovation in applications such as paints and coatings,
adhesives, construction, glass fiber, textiles and paper. Our emulsion polymers products are sold under globally and regionally
recognized brands including EcoVAE®, Mowilith®, Vinamul®, Celvolit®, Dur-O-Set®, TufCOR® and Avicor®. The emulsion
polymers business has production facilities in Canada, China, Germany, the Netherlands, Singapore, Sweden and the U.S. and
is supported by expert technical service regionally.
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Our EVA polymers business is a leading North American manufacturer of a full range of specialty EVA resins and compounds,
as well as select grades of LDPE. Sold under the Ateva® brand, these products are used in many applications, including flexible
packaging films, lamination film products, hot melt adhesives, automotive parts and carpeting. Our EVA polymers business has
a production facility in Canada.
Our intermediate chemistry business produces VAM, a primary raw material for our emulsion polymers and EVA polymers
businesses. Ethylene, another key raw material, is purchased externally from a variety of sources through annual or multi-year
contracts.
Our RDP business is a leading manufacturer of redispersible polymer powders, sold under the Elotex® brand. The business
produces polymer emulsions which are converted into powdered thermoplastic resin materials. RDP products are used in a
variety of applications in the mortar industry, including decorative mortar, exterior insulation and finish systems, gypsum-based
materials, plaster and render, self-leveling floor systems, skim coat and tile adhesives.
Our acetate tow business is a leading global producer and supplier of acetate tow and acetate flake, primarily used in filter
products applications. We hold an approximately 30% ownership interest in three separate ventures in China that produce
acetate flake and acetate tow. China National Tobacco Corporation, a Chinese state-owned tobacco entity, has been our venture
partner for over three decades. Our acetate tow business has production sites in Belgium and the U.S., along with sites at our
three strategic affiliates in China.
•
Key Products
Acetyl Products. Acetyl products include acetic acid, VAM, acetic anhydride and acetaldehyde. Acetic acid is primarily used to
manufacture VAM, purified terephthalic acid and other acetyl derivatives. VAM is used in a variety of adhesives, paints, films,
coatings and textiles. Acetic anhydride is a raw material used in the production of cellulose acetate, detergents and
pharmaceuticals. Acetaldehyde is a major feedstock for the production of a variety of derivatives, such as pyridines, which are
used in agricultural products. We manufacture acetic acid, VAM and acetic anhydride for our own use in producing
downstream, value-added products, as well as for sale to third parties.
Acetic acid and VAM, our basic acetyl intermediates products, leverage global supply and demand fundamentals. The principal
raw materials in these products are carbon monoxide, methanol and ethylene. We generally purchase carbon monoxide under
long-term contracts, and we also produce carbon monoxide in our Clear Lake facility. We generally purchase methanol and
ethylene under both annual and multi-year contracts. Methanol and ethylene are commodity products and generally available
from a wide variety of sources, while carbon monoxide is typically purpose-made in close proximity.
We have a joint venture, Fairway Methanol LLC ("Fairway"), with Mitsui & Co., Ltd., of Tokyo, Japan ("Mitsui"), in which we
own a 50% interest, for the production of methanol at our integrated chemical plant in Clear Lake, Texas. The methanol unit
utilizes natural gas in the U.S. Gulf Coast region as a feedstock. Almost all of our North American methanol needs are met
from our share of the production, as well as the long-term contract we have with our joint venture partner, Mitsui.
Sales from acetyl products amounted to 30%, 36% and 27% of our consolidated net sales for the years ended
December 31, 2022, 2021 and 2020, respectively.
Solvents and Derivatives. We manufacture a variety of solvents, formaldehyde and other chemicals, which in turn are used in
the manufacture of paints, coatings, adhesives and other products. Many solvents and derivatives products are derived from our
production of acetic acid. Primary products are:
•
•
•
Ethyl acetate, an acetate ester that is a solvent used in coatings, inks and adhesives;
Butyl acetate, an acetate ester that is a solvent used in inks, pharmaceuticals and perfume; and
Formaldehyde and paraformaldehyde, which are primarily used to produce adhesive resins for plywood, particle board,
coatings, POM engineering resins and a compound used in making polyurethane.
Emulsion Polymers. Our emulsion polymers business produces conventional vinyl- and acrylate-based emulsions and VAE
emulsions. VAE emulsions are a key component of water-based architectural coatings, adhesives, non-wovens, textiles, glass
fiber and other applications. VAE emulsions are in high demand in Europe and Asia as they enable low volatile organic
compound paints, specifically in interior paints.
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Table of Contents
EVA Polymers. Our EVA polymers business produces low-density polyethylene, EVA resins and compounds. Low-density
polyethylene is produced in high-pressure reactors from ethylene, while EVA resins and compounds are produced in high-
pressure reactors from ethylene and VAM.
Redispersible Powders. Our RDP business produces a number of emulsions for use in manufacturing redispersible powders to
meet requirements for various applications and formulated to fit our customers' needs for optimal production.
Acetate tow and acetate flake. Acetate tow is a fiber used primarily in cigarette filters. In order to produce acetate tow, we first
produce acetate flake by processing wood pulp with acetic acid and acetic anhydride. Wood pulp generally comes from
reforested trees and is purchased externally from a variety of sources, and acetic anhydride is an intermediate chemical that we
produce from acetic acid in our intermediate chemistry business. Acetate flake is then further processed into acetate tow.
•
Customers
Our intermediate chemistry business sells its products both directly to customers and through distributors. Acetic acid, VAM
and acetic anhydride are global businesses, and we generally supply our customers under a mix of short- and long-term
agreements. Acetic acid, VAM and acetic anhydride customers produce polymers used in water-based paints, adhesives, paper
coatings, polyesters, film modifiers, pharmaceuticals, cellulose acetate and textiles. We have long-standing relationships with
most of these customers. Solvents and derivatives are sold to a diverse group of regional and multinational customers under
multi-year contracts and on the basis of long-standing relationships. Solvents and derivatives customers are primarily engaged
in the production of paints, coatings and adhesives. We manufacture formaldehyde for our own use as well as for sale to a few
regional customers.
Emulsion, RDP and EVA polymers products are sold to a diverse group of regional, family owned and multinational customers.
Customers of our emulsion polymers and RDP business are manufacturers of water-based paints and coatings, adhesives, paper,
building and construction products, glass fiber, non-wovens, textiles and premixed dry mortars. Customers of our EVA
polymers business are engaged in the manufacture of a variety of products, including hot melt adhesives, automotive
components, thermal laminations, and flexible and food packaging materials.
Acetate tow is sold principally to the major tobacco companies that account for a majority of worldwide cigarette production.
Many sales are conducted under contracts with pricing for one or more years. As a result, margins may expand or contract in
response to changes in market conditions over these similar periods, and we may be unable to adjust pricing due to other
factors, such as the intense level of competition in the industry.
Pricing of our products within the Acetyl Chain segment is influenced by industry utilization, changes in the cost of raw
materials, sensitivity to demand and the value-in-use. Therefore, in general, there is a direct correlation between these factors
and our net sales for most Acetyl Chain products. This impact to pricing typically lags changes in raw material costs over
months or quarters and impacts profit margins over those periods.
See Note 22 - Revenue Recognition in the accompanying consolidated financial statements for further information.
Other Activities
Other Activities primarily consists of corporate center costs, including administrative activities such as finance, information
technology and human resource functions, interest income and expense associated with our financing activities and results of
our captive insurance companies. Our two wholly-owned captive insurance companies are a key component of our global risk
management program, as well as a form of self-insurance for our liability, property and workers compensation risks. The
captive insurance companies retain risk at levels approved by management and obtain reinsurance coverage from third parties to
limit the net risk retained. Other Activities also includes the interest cost, expected return on assets and net actuarial gains and
losses components of our net periodic benefit cost for our defined benefit pension plans and other postretirement plans, which
are not allocated to our business segments. Ongoing merger, acquisition and integration related costs are also included in Other
Activities.
Strategic Affiliates
Our strategic affiliates represent an important component of our strategy. During 2022, we acquired interests in several global
strategic affiliates as part of the M&M Acquisition, described below. We have a substantial portfolio of affiliates in various
regions, including Asia-Pacific, Europe, North America and the Middle East. These affiliates have sizeable operations and are
significant within their industries.
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Table of Contents
With shared characteristics such as products, applications and manufacturing technology, these strategic affiliates complement
and extend our technology and specialty materials portfolio. We have historically entered into these investments to gain access
to local demand, minimize costs and accelerate growth in areas we believe have significant future business potential.
Our strategic affiliates contribute substantial earnings and cash flows to us. During the year ended December 31, 2022, our
equity method strategic affiliates generated combined sales of $2.3 billion, resulting in our recording $181 million of equity in
net earnings of affiliates and $187 million of dividends.
Our strategic affiliates as of December 31, 2022 are as follows:
Location of
Headquarters Ownership
Partner(s)
Year
Entered
Equity Investments
Engineered Materials
National Methanol Company ...........
Korea Engineering Plastics Co.,
Ltd. ...................................................
Saudi
Arabia
South
Korea
Fortron Industries, LLC ...................
U.S.
Toray Celanese Co., Ltd. ..................
DuBay Polymer GmbH ....................
DuPont Teijin Films UK Ltd. ...........
DuPont Teijin Films Netherlands
B.V. ..................................................
DuPont Teijin Films Luxembourg
S.A. ...................................................
DuPont Teijin Films US Limited
Partnership .......................................
Teijin-DuPont Films, Incorporated ..
Consolidated Investments
Engineered Materials
DuPont Teijin Films China Ltd. .......
DuPont Teijin Hongji Films Ningbo
Co. Ltd. ............................................
DuPont Hongji Films Foshan Co.
Ltd. ...................................................
DuPont Filaments-Americas, LLC ...
Japan
Germany
United
Kingdom
Netherlands
U.S.
U.S.
China
China
China
U.S.
DuPont Filaments Europe, BV ......... Netherlands
DuPont Xingda Filaments Co Ltd ....
China
Acetyl Chain
Fairway Methanol LLC ....................
50 %
Equity Investments Without Readily Determinable Fair Value
U.S.
25 %
50 %
50 %
50 %
50 %
50 %
50 %
Saudi Basic Industries Corporation (50%);
Duke Energy Arabian Ltd. (25%)
Mitsubishi Gas Chemical Company, Inc.
(40%);
Mitsubishi Corporation (10%)
Kureha America Inc. (50%)
Toray (50%)
Lanxess AG (50%)
Teijin Limited (50%)
Teijin Limited (50%)
Luxembourg
50 %
Teijin Limited (50%)
50 %
50 %
51 %
26 %
26 %
70 %
70 %
70 %
Teijin Limited (50%)
Teijin Limited (50%)
Teijin Limited (49%)
Teijin Limited (73.99%)
Teijin Limited (73.99%)
Xingda (30%)
Xingda (30%)
Xingda (30%)
Mitsui & Co., Ltd. (50%)
1981
1999
1992
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2022
2014
Acetyl Chain
Kunming Cellulose Fibers
Company, Limited ............................
Nantong Cellulose Fibers
Company, Limited ............................
Zhuhai Cellulose Fibers Company,
Limited .............................................
China
China
China
30 %
China National Tobacco Corporation (70%)
1993
31 %
China National Tobacco Corporation (69%)
1986
30 %
China National Tobacco Corporation (70%)
1993
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Table of Contents
National Methanol Company. National Methanol Company ("Ibn Sina") represents approximately 1% of the world's methanol
production capacity and is one of the world's largest producers of methyl tertiary-butyl ether, a gasoline additive. Its production
facilities are located in Saudi Arabia. Saudi Basic Industries Corporation ("SABIC") is responsible for all product marketing.
Methanol is a key feedstock for POM production and is produced by our Ibn Sina affiliate which provides an economic hedge
against raw material costs in our engineered materials business.
Korea Engineering Plastics Co., Ltd. Korea Engineering Plastics Co., Ltd. ("KEPCO") is a leading producer of POM in South
Korea. KEPCO has polyacetal production facilities in Ulsan, South Korea, compounding facilities for PBT and nylon in
Pyongtaek, South Korea, and participates with Mitsubishi Gas Chemical Company, Inc. in a world-scale POM facility in
Nantong, China. In December 2020, we signed a memorandum of understanding with our joint venture partners to restructure
KEPCO, in which we and our joint venture partners will receive exclusive offtake rights to POM in Asia and global marketing
rights without restrictions. On April 1, 2022, we completed the joint venture restructuring of KEPCO. As part of the
restructuring of KEPCO, we paid KEPCO $5 million and will pay 5 equal annual installments of €24 million on October 1 of
each year beginning in 2022. This resulted in an increase to our investment in KEPCO of $134 million. Our joint venture
partner will be making similar payments to KEPCO. The restructuring did not result in a change in ownership percentage of
KEPCO, nor a change in control, and KEPCO will continue to be accounted for as an equity method investment.
Fortron Industries, LLC. Fortron Industries LLC ("Fortron") is a leading global producer of PPS, sold under the Fortron® brand,
which is used in a wide variety of automotive and other applications, especially those requiring heat and/or chemical resistance.
Fortron's facility is located in Wilmington, North Carolina. This venture combines our sales, marketing, distribution,
compounding and manufacturing expertise with the PPS polymer technology expertise of Kureha America Inc.
Toray Celanese Co., Ltd. Toray Celanese Co., Ltd. manufactures Hytrel® for sale primarily in the Japanese market. Hytrel® is a
versatile material with the ability to flex in multiple directions long after rubber would break. Its strength and durability,
combined with its heat resilience and chemical resistance make it an essential ingredient in automotive and construction
applications due to its ability to combine the advantages of both flexible and plastic materials.
DuBay Polymer GmbH. DuBay Polymer GmbH is a manufacturing joint venture with Lanxess AG for the production of PBT-
based products.
DuPont Teijin Films. DuPont Teijin Films is a leading global producer of PET and polyethylene naphthalate ("PEN") polyester
films, which are used in a wide variety of end markets from healthcare to industrial and electronics. Mylar® and Melinex® brand
films, known for their wide range of performance capabilities, are used in a variety of applications.
DuPont Filaments. DuPont Filaments is a joint venture with Xingda for the production and sale of nylon and PBT-based
filament products used in the personal care, construction and industrial end-markets.
Acetyl Chain strategic ventures. Our Acetyl Chain ventures generally fund their operations using operating cash flow and pay
dividends based on each ventures' performance in the preceding year. In 2022, 2021 and 2020, we received cash dividends of
$132 million, $146 million and $126 million, respectively.
Although our ownership interest in each of our Acetyl Chain ventures exceeds 20%, we account for these investments at cost
after considering observable price changes for similar instruments, minus impairment, if any, because we determined that we
cannot exercise significant influence over these entities due to local government investment in and influence over these entities,
limitations on our involvement in the day-to-day operations and the present inability of the entities to provide timely financial
information prepared in accordance with generally accepted accounting principles in the United States of America. Further,
these investments were determined not to have a readily determinable fair value.
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Other Equity Method Investments
InfraServs. We hold indirect ownership interests in several German InfraServ Groups that own and develop industrial parks and
provide various technical and administrative services to tenants. Our ownership interest in the equity investments in InfraServ
affiliates are as follows:
InfraServ GmbH & Co. Gendorf KG .......................................................................................................
InfraServ GmbH & Co. Hoechst KG .......................................................................................................
Yncoris GmbH & Co. KG ........................................................................................................................
Intellectual Property
As of December 31, 2022
(In percentages)
30
31
22
We attach importance to protecting our intellectual property, including safeguarding our confidential information and through
our patents, trademarks and copyrights, in order to preserve our investment in research and development, manufacturing and
marketing. Patents may cover processes, equipment, products, intermediate products and product uses. We also seek to register
trademarks as a means of protecting the brand names of our Company and products.
Patents. In most industrial countries, patent protection exists for new substances and formulations, as well as for certain unique
applications and production processes. However, we do business in regions of the world where intellectual property protection
may be limited and difficult to enforce.
Confidential Information. We maintain stringent information security policies and procedures wherever we do business. Such
information security policies and procedures include data encryption, controls over the disclosure and safekeeping of
confidential information and trade secrets, as well as employee awareness training.
Trademarks. Amcel®, AOPlus®, Ateva®, Avicor®, Celanese®, Celanex®, Celanyl®, Celcon®, Celstran®, Celvolit®, Clarifoil®,
Crastin®, Dur-O-Set®, Dytron®, ECOMID®, EcoVAE®, Elotex®, Factor®, Forprene®, FRIANYL®, Fortron®, Geolast®, GHR®,
GUR®, Hostaform®, Hytrel®, Laprene®, Melinex®, MetaLX®, Mowilith®, MT®, Mylar®, NILAMID®, Nutrinova®, Nylfor®,
OmniLon®, Pibifor®, Pibiter®, Polifor®, Resyn®, Rynite®, Santoprene®, SlideX®, Sofprene®, Sofpur®, Sunett®, Talcoprene®,
Tarnoform®, Tecnoprene®, TufCOR®, Vamac®, VAntage®, Vectra®, Vinac®, Vinamul®, VitalDose®, Zenite®, Zytel® and
certain other branded products and services named in this document are registered or reserved trademarks or service marks
owned or licensed by Celanese. The foregoing is not intended to be an exhaustive or comprehensive list of all registered or
reserved trademarks and service marks owned or licensed by Celanese. Fortron® is a registered trademark of Fortron Industries
LLC. Hostaform® is a registered trademark of Hoechst GmbH. Mowilith® and NILAMID® are registered trademarks of
Celanese in most European countries.
We monitor competitive developments and defend against infringements on our intellectual property rights. Neither Celanese
nor any particular business segment is materially dependent upon any one patent, trademark, copyright or trade secret.
Environmental and Other Regulation
Matters pertaining to environmental and other regulations are discussed in Item 1A. Risk Factors, as well as Note 2 - Summary
of Accounting Policies, Note 13 - Environmental and Note 19 - Commitments and Contingencies in the accompanying
consolidated financial statements.
We expect to incur approximately $20 million to $40 million in capital expenditures for environmental control measures in each
of 2023 and 2024.
Climate Change
Climate change is one of the most challenging and significant issues facing the world today, and we seek to do our part to make
sustainable progress toward addressing this challenge.
The nature of our operations is energy and fossil fuel intensive. We have therefore invested in capital projects to increase
energy efficiency, improve reliability, recover and reuse waste heat, and increase our purchase of renewable energy as well as
more sustainable raw materials. These include a combined heat and power unit at our Lanaken, Belgium facility, a waste-to-
13
Table of Contents
energy system in Nanjing, China, using solar energy at our Clear Lake, Texas facility designed for use by us and our onsite
industrial partners, and a carbon dioxide capture and conversion to methanol project at our Clear Lake, Texas facility.
We are also focused on developing products to help our customers meet their sustainability goals. Examples include products
for improving the sustainability of building and construction materials, adhesives, fiber coatings, flexible packaging, vehicle
lightweighting and powering electric vehicles. We are also focused on making our own products from more sustainable sources,
including increasing our offering products using biocertified content or recycled feedstocks. We believe these capabilities,
together with trends such as the automobile industry's commitment towards improved energy efficiency and clean energy,
present market opportunities for us.
With the fourth quarter 2022 publication of our 2021-2022 Sustainability Report, we have reported gross Scope 1 and Scope 2
greenhouse gas ("GHG") emissions for 2020 and 2021 using The Greenhouse Gas Protocol, A Corporate Accounting and
Reporting Standard, as a guide. Updated 2022 emissions figures were not available at the time of this filing. We have also
announced a Scope 1 and 2 GHG emissions reduction target described in our 2021-2022 Sustainability Report, obtained limited
external assurance on our baseline 2021 environmental metrics, and are working to better understand where we can further
reduce our GHG emissions sources and to integrate the M&M Business into our GHG measurement and reporting processes.
For information on the risks we face related to climate change and other sustainability matters as well as, potential legislative
and regulatory developments in this area that may increase our operating costs, potentially significantly, please see the risk
factors in Item 1A. Risk Factors titled "We are subject to financial, regulatory, physical risks and transition associated with
climate change and other sustainability matters as well as potential legislation, regulation and international accords to address
climate change and other sustainability matters," "Changes in environmental, health and safety regulations in the jurisdictions
where we manufacture or sell our products could lead to a decrease in demand for our products" and "Our aspirations, goals,
and initiatives related to sustainability, and our public statements and disclosures regarding them, expose us to risks." Climate-
related regulatory risks are assessed as a part of our Enterprise Risk Management process. However, due to the level of
uncertainty regarding what legislative or regulatory requirements may be enacted, it is not possible for us to estimate the impact
of climate-related developments on our results of operations or financial conditions.
Human Capital Resources
Workforce Composition and Diversity, Equity and Inclusion
Our business is operated by a diverse and global workforce, with employees in the following key geographies:
North America
U.S. .............................................................................................................................................................
Other North America ..................................................................................................................................
Total ..........................................................................................................................................................
Europe
Germany .....................................................................................................................................................
Other Europe ..............................................................................................................................................
Total ..........................................................................................................................................................
Asia
China ..........................................................................................................................................................
Other Asia ..................................................................................................................................................
Total ..........................................................................................................................................................
Rest of World ...............................................................................................................................................
Total .......................................................................................................................................................
Employees as of
December 31, 2022
4,722
688
5,410
1,896
2,854
4,750
1,838
1,074
2,912
191
13,263
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We believe that providing a workplace that promotes mutual respect and inclusion for all employees is critical to our success
and to driving innovation and growth. To that end, we continue to make progress in our efforts to promote diversity, equity and
inclusion in our Company. In order attract a diverse pipeline of talent, we engage with historically black colleges and
universities ("HBCUs"), trade associations and other professional groups to broaden our candidate pool. Our Diversity, Equity
and Inclusion Council elevates employee voice to inform activities that foster an inclusive environment for all. We promote
engagement globally through 59 chapters of nine different Employee Resource Groups designed to inspire, develop and
increase the visibility, representation and promotion of underrepresented groups.
As of December 31, 2022:
•
•
globally, women represent approximately 44% of our senior leadership team and 25% of our overall workforce; and
in the U.S., people of color represent approximately 13% of our senior leadership team and 30% of our overall
workforce.
The following shows our attrition rate for the year ended December 31, 2022:
Employee Category
Global employees ...................................................................................................................................................
Women (globally) ...................................................................................................................................................
People of Color (U.S.) ............................................................................................................................................
10.9 %
12.2 %
12.9 %
Attrition Rate
Stewardship: Health, Safety and Environmental
We focus on more than the occupational health and safety of our employees, contractors and any visitors to our sites. We have
an expanded view and measurement of "Stewardship" that includes process safety and releases to the environment since these
incidents may have an impact on the communities where we live and work. Our Stewardship values are critical to our success in
attracting and retaining the best industry talent across the globe.
We strive to do no harm to people, the environment or the communities that host our facilities. We believe in continuous
improvement in our Stewardship culture by building competency in our people and having a comprehensive management
system built from recognized global practices. Our values include a commitment to the health and safety of our employees,
contractors, communities and the environment.
We utilize a mixture of leading and lagging indicators to assess the Stewardship performance of our operations. Lagging
indicators for occupational health and safety include the Occupational Safety and Health Administration ("OSHA") Total
Recordable Incident Rate ("TRIR") and the OSHA Lost Time Incident Rate ("LTIR") based upon the number of incidents per
200,000 work hours of both employees and contractors. Process Safety lagging indicators follow the industry standard from
API RP 754 for Tier 1 and Tier 2 events for incident count, rate, and severity. The criteria for tracking release to the
environment lagging indicators are 10% or greater of the Celanese reportable quantity (based on U.S. Environmental Protection
Agency ("EPA") methodology or internal values). Examples of Stewardship Tier 3 leading indicators include reporting and
resolution of near miss events and hazard recognitions, all loss of primary containment releases and challenges to process safety
systems.
For the year ended December 31, 2022, we had a TRIR of 0.24 and a LTIR of 0.04, which includes two months of safety
statistics from the M&M Business. These statistics exclude COVID-19 related work place transmissions. Through deliberate
actions, we have reduced our TRIR and LTIR rates by 23% and 69%, respectively, since 2017.
Rounding out our Stewardship performance in 2022, we had 11 Tier 1 and Tier 2 process safety incidents and 9 releases to the
environment above the 10% significant threshold. Any other loss of primary containment incidents, challenges to pressure relief
systems, safety instrumented systems and safe operating limits are tracked as Tier 3 leading indicators. Our expanded tracking
of leading indicator events helps identify potential emerging deficiencies that enables us to take continuous improvement
actions. For example, this past year we concentrated heavily on improving our hazard identification and risk assessment and
migration systems, hand safety awareness (the most commonly impacted body part) and establishing clear requirements
regarding our fundamental life critical procedures and their field execution while focusing to prevent injuries with the most
significant consequences. In 2023, the criteria for tracking release to the environment lagging indicators referenced above
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changed from a Celanese based reportable quantity to a criteria that includes impact to the community and notification to a
regulatory authority outside of routine communications.
Talent Development
We are committed to fostering an engaging and inclusive workplace with opportunities for collaboration, development and
leadership. Our Talent Management strategies provide a consistent and efficient approach to how we acquire talent, manage
performance, develop bench strength, support development and help employees reach their fullest potential.
We have a structured approach to reviewing talent with management, as well as with the Board of Directors. This includes
discussions of employee development, executive succession, diversity, talent pipelines and workforce planning requirements.
We regularly report to the Board of Directors on talent management strategies across functional areas, and annually review
executive succession with the Board of Directors.
Available Information — Securities and Exchange Commission ("SEC") Filings and Corporate Governance Materials
We make available free of charge, through the investor portion of our internet website (http://investors.celanese.com), our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as ownership reports on
Form 3 and Form 4, as soon as reasonably practicable after electronically filing such material with, or furnishing it to, the SEC.
References to our website in this report are provided as a convenience, and the information on our website is not, and shall not
be deemed to be a part of this report or incorporated into any other filings we make with the SEC. The SEC maintains a website
that contains reports, proxy and information statements, and other information regarding issuers, including Celanese
Corporation, that electronically file with the SEC at http://www.sec.gov.
We also make available free of charge, through our website, our Corporate Governance Guidelines of our Board of Directors
and the charters of each of the standing committees of our Board of Directors.
Item 1A. Risk Factors
The following risks could materially and adversely affect our business, financial condition, cash flows and results of operations,
and the trading price of our common stock or outstanding senior notes could decline. These risk factors do not identify all risks
that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider
to be immaterial to our operations. Due to risks and uncertainties, known and unknown, our past financial results may not be a
reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future
periods. Refer also to the other information set forth in this Form 10-K, including in Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations and the accompanying consolidated financial statements and notes
thereto.
Risks Related to Business and Industry Conditions
We are exposed to general economic, political and regulatory conditions and risks in the countries in which we have
operations and customers.
We operate globally and have customers in many countries. Our major facilities are primarily located in North America, Europe
and Asia, and we hold interests in affiliates that operate in the United States ("U.S."), Germany, China, Japan, South Korea and
Saudi Arabia. Our principal customers are similarly global in scope and the prices of our most significant products are typically
regional or world market prices. Consequently, our business and financial results are affected, directly and indirectly, by world
economic conditions, including instability in credit markets, declining consumer and business confidence, fluctuating
commodity prices and interest rates, cost inflation, volatile exchange rates and other challenges such as the changing regulatory
environment.
Our operations are also subject to global political conditions. For example, any future withdrawal or renegotiation of trade
agreements, or the failure to reach agreement over trade agreements, or the imposition of new or increased tariffs on our
products or raw materials, or the more aggressive prosecution of trade disputes with countries like China, may increase costs or
reduce profitability, or adversely affect our ability to operate our business and execute our growth strategy. In addition, it may
be more difficult for us to enforce agreements, collect receivables, receive dividends and repatriate earnings through foreign
legal systems. In certain foreign jurisdictions our operations are subject to nationalization and expropriation risk and some of
our contractual relationships within these jurisdictions are subject to cancellation without full compensation for loss.
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Furthermore, in certain cases where we benefit from local government subsidies or other undertakings, such benefits are subject
to the solvency of local government entities and are subject to termination without meaningful recourse or remedies.
We have invested significant resources in China and other Asian countries. This region's growth may slow, or trade flows could
be negatively impacted, and we may fail to realize the anticipated benefits associated with our investment there and,
consequently, our financial results may be adversely impacted.
In addition, we have significant operations and financial relationships based in Europe. Historically, sales originating in Europe
have accounted for over one-third of our net sales annually, and accounted for approximately 35% of our Net sales in 2022.
Adverse conditions in the European economy may negatively impact our overall financial results due to reduced economic
growth, trade disruptions, decreased end-use customer demand or other factors.
We are subject to risks associated with the increased volatility in the prices and availability of key raw materials and energy,
which could have a significant adverse effect on the margins of our products and our financial results.
We purchase significant amounts of ethylene, methanol, carbon monoxide and natural gas from third parties primarily for use in
our production of basic chemicals in our intermediate chemistry business, principally acetic acid, VAM and formaldehyde. We
use a portion of our output of these chemicals, in turn, as inputs in the production of downstream products in all of our business
segments. We also purchase some of these raw materials for use in our emulsion polymers and EVA polymer businesses,
primarily for vinyl acetate ethylene emulsions and ethylene vinyl acetate production, as well as significant amounts of wood
pulp for use in our production of acetate tow. We also procure polymers, rubber and polypropylene for use in production of
engineered materials, and other raw materials as additives to our products including fiberglass, flame retardant materials and
other compounding components.
The prices and availability of many of these items is dependent on supply and logistics considerations. Prices can increase
significantly as a result of uncertainties associated with inflationary pressures, transportation or logistics disruptions, weather,
natural disasters, epidemics, pandemics, the effects of climate change or political instability, plant or production disruptions,
war or conflicts, strikes or other labor unrest, breakdown or degradation of transportation infrastructure used in the delivery of
raw materials and energy commodities, terrorist activities, civil unrest, or changes in laws or regulations in any of the countries
in which we have significant suppliers. In particular, to the extent of our vertical integration in the production of chemicals,
shortages in the availability of raw material chemicals, such as natural gas, ethylene and methanol, or the loss of our dedicated
supplies of carbon monoxide, may have an increased adverse impact on us as it can cause a shortage in intermediate and
finished products. Such shortages would adversely impact our ability to produce certain products and increase our costs
resulting in reduced margins and adverse impacts to our financial results.
Like many companies, we experienced supply disruptions and increased costs of inputs in 2021 and continuing into 2022.
These trends have impacted our operating costs and we have undertaken efforts to offset these costs through pricing actions,
alternative supply arrangements, and hedging strategies, however, these do not eliminate all exposure to inflationary pressure.
We are not always successful passing costs to customers, competitive market conditions may prevent us from doing so, and
even where we are successful increased prices could lead to reduced demand for our products or could result in competitive
disadvantages. We currently expect these issues to continue into 2023.
We are exposed to volatility in the prices of our raw materials and energy. Although we have long-term supply agreements,
multi-year purchasing and sales agreements and forward purchase contracts providing for the supply of ethylene, methanol,
carbon monoxide, wood pulp, natural gas and electricity, the contractual prices for these raw materials and energy can vary with
economic conditions and may be highly volatile. In addition to the factors noted above that may impact supply or price, factors
that have caused volatility in our raw material prices in the past and which may do so in the future include:
•
•
•
•
•
Shortages of raw materials due to increasing demand, e.g., from growing uses or new uses;
Capacity constraints, e.g., due to construction delays, labor disruption, government-imposed work or travel
restrictions, involuntary shutdowns or turnarounds;
A supplier's inability to meet our delivery orders, a supplier's decision not to fulfill orders or to terminate a supply
contract or our inability to obtain or renew supply contracts on favorable terms;
The general level of business, economic and industry activity; and
The direct or indirect effect of governmental regulation (including the impact of government regulation relating to
power usage, climate change or regulation of production and transport of certain chemicals).
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If we are not able to fully offset the effects of higher energy and raw material costs through price increases, productivity
improvements or cost reduction programs, or if such commodities become unavailable, it could have a significant adverse effect
on our ability to timely and profitably manufacture and deliver our products resulting in reduced margins, lost sales and adverse
impacts to our financial results.
We have a practice of maintaining, when available, multiple sources of supply for raw materials and services. However, some
of our individual plants may have single sources of supply for some of their raw materials, such as carbon monoxide, steam and
ethylene, or site services. Although we have been able to obtain sufficient supplies of raw materials and services, there can be
no assurance that unforeseen developments will not affect our ability to source raw materials or services in the future. Even if
we have multiple sources of supply for a raw material or a service, there can be no assurance that these sources can make up for
the loss of a major supplier. Furthermore, if any sole source or major supplier were unable or unwilling to deliver a raw material
or a service for an extended period of time, we may not be able to find an acceptable alternative or any such alternative could
result in increased costs. It is also possible that profitability would be adversely affected if we were required to qualify
additional sources of supply for a raw material or a service to our specifications in the event of the loss of a sole source or major
supplier.
Almost all of our supply of methanol in North America is currently obtained from our Fairway joint venture with Mitsui, in
which we own a 50% interest, for the production of methanol at our integrated chemical plant in Clear Lake, Texas.
Risks Related to Our Global Operations and Our Strategy
Production at our manufacturing facilities, or at our suppliers', could be disrupted for a variety of reasons, which could
prevent us from producing enough of our products to maintain our sales and satisfy our customers' demands.
A disruption in production at one or more of our manufacturing facilities, or our suppliers, could have a material adverse effect
on our business. Disruptions could occur for many reasons, including fire, natural disasters, severe weather, unplanned
maintenance or other manufacturing problems, public health crises (including, but not limited to, the COVID-19 pandemic),
disease, geopolitical events, strikes or other labor unrest, transportation interruption, government regulation, political unrest or
terrorism. Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more or may
take a significant time to start production, each of which could negatively affect our business and financial performance. If one
of our key manufacturing facilities is unable to produce our products for an extended period of time, our sales may be reduced
by the shortfall caused by the disruption and we may not be able to meet our customers' needs, which could cause them to seek
other suppliers. In particular, production disruptions at our manufacturing facilities that produce chemicals used as inputs in the
production of chemicals in other business segments, such as acetic acid, VAM and formaldehyde, could have a more significant
adverse effect on our business and financial performance and results of operations to the extent of such vertical integration.
Furthermore, to the extent a production disruption occurs at a manufacturing facility that has been operating at or near full
capacity, the resulting shortage of our product could be particularly harmful because production at such manufacturing facility
may not be able to reach levels achieved prior to the disruption.
We have experienced disruptions of the type described above in recent years. In February 2021, Winter Storm Uri led to
worldwide supply disruptions, loss of energy and critical raw materials at our Texas sites and impacted nearly all of our
employees in Texas, where we are headquartered and where several of our manufacturing sites are located. This storm led us to
proactively and temporarily shut down our Texas production facilities in a controlled manner to protect our employees,
communities, and assets, and the necessity of this decision led to lost production and negatively impacted our financial results
for that quarter. In August 2020, to protect our employees and safeguard the assets at our Clear Lake facility, we temporarily,
voluntarily ceased production at our Clear Lake, Texas facility during the landfall of Hurricane Laura.
Disruptions or interruptions of production or operations could also occur due to accidents, interruptions in sources of raw
materials, cybersecurity incidents, terrorism or political unrest, or other unforeseen events or delays in construction or operation
of facilities, including as a result of geopolitical conditions, the occurrence of acts of war or terrorist incidents or as a result of
weather, natural disasters, or other crises including public health crises.
Failure to develop new products and production technologies or to implement productivity and cost reduction initiatives
successfully, may harm our competitive position.
Our operating results depend significantly on the development of commercially viable new products, product grades and
applications, as well as improving process technologies. If we are unsuccessful in developing new products, applications and
improved production processes in the future, including failing to leverage our opportunity pipeline in our Engineered Materials
segment, our competitive position and operating results may be negatively affected. However, as we invest in new technology,
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we face the risk of unanticipated operational or commercialization difficulties, including an inability to obtain necessary permits
or governmental approvals, the development of competing technologies, failure of facilities or processes to operate in
accordance with specifications or expectations, construction delays, cost over-runs, the unavailability of financing, required
materials or equipment and various other factors. Likewise, we have undertaken and are continuing to undertake initiatives in
all of our business segments to improve productivity and performance and to generate cost savings. These initiatives may not be
completed or beneficial or the estimated cost savings from such activities may not be realized.
We could be subject to damages based on claims brought against us by our customers or lose customers as a result of the
failure of our products to meet certain quality specifications.
Our products provide important performance attributes to our customers' products. If one of our products fails to perform in a
manner consistent with applicable quality specifications, a customer could seek replacement of the product or damages for costs
incurred as a result of the product failing to perform as guaranteed. A successful claim or series of claims against us could have
a material adverse effect on our reputation, financial condition and results of operations and could result in a loss of one or
more key customers.
Our production facilities, including facilities we own and/or operate and operations at our facilities owned and/or operated
by third parties, handle the processing of some volatile and hazardous materials that subject us to operating and other risks
that could have a negative effect on our operating results.
Although we take precautions to enhance the safety of, and minimize the disruption to, our operations and operations at our
facilities owned and/or operated by third parties, we are subject to operating and other risks associated with chemical
manufacturing, including the storage and transportation of raw materials, finished products and waste. These risks include,
among other things, pipeline and storage tank leaks and ruptures, explosions and fires and discharges or releases of toxic or
hazardous substances. In addition, we may have limited control over operations at our facilities owned and/or operated by third
parties or such operations may not be fully integrated into our safety programs.
These operating and other risks can cause personal injury, property damage, third-party damages and environmental
contamination, and may result in the shutdown of affected facilities and the imposition of civil or criminal penalties. The
occurrence of any of these events may disrupt production and have a negative effect on the productivity and profitability of a
particular manufacturing facility, our operating results and cash flows.
Our future success depends in part on our ability to protect our intellectual property rights and our rights to use our
intellectual property. Our inability to protect and enforce these rights could reduce our ability to maintain our industry
position and our profit margins.
We rely on our patents, trademarks, copyrights, know-how and trade secrets, and patents and other technology licensed from
third parties, to protect our investment in research and development and our competitive commercial positions in manufacturing
and marketing our products. We have adopted internal policies for protecting our know-how and trade secrets. In addition, our
practice is to seek patent or trade secret protection for significant developments that provide us competitive advantages and
freedom to practice for our businesses. Patents may cover catalysts, processes, products, intermediate products and product
uses. These patents are usually filed in strategic countries throughout the world and provide varying periods and scopes of
protection based on the filing date and the type of patent application. The legal life and scope of protection provided by a patent
may vary among those countries in which we seek protection. As patents expire, the catalysts, processes, products, intermediate
products and product uses described and claimed in those patents generally may become available for use by the public subject
to our continued protection for associated know-how and trade secrets. We also monitor intellectual property of others,
especially patents that could impact our rights to commercially implement research and development, our rights to manufacture
and market our products, and our rights to use know-how and trade secrets. We will not intentionally infringe upon the valid
intellectual property rights of others, and we will continue to assess and take actions as necessary to protect our positions. We
also seek to register trademarks as a means of protecting the brand names of our products, which brand names become more
important once the corresponding product or process patents have expired. We operate in regions of the world where
intellectual property protection may be limited and difficult to enforce and our continued growth strategy may result in us
seeking intellectual property protection in additional regions with similar challenges. We also monitor the trademarks of others
and take action when our trademark rights are being infringed upon. If we are not successful in protecting or maintaining our
patent, license, trademark or other intellectual property rights, or protecting our rights to commercially make, market and sell
our products, our net sales, results of operations and cash flows may be adversely affected.
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Our business is exposed to risks associated with the creditworthiness of our suppliers, customers and business partners and
the industries in which our suppliers, customers and business partners participate are cyclical in nature, both of which may
adversely affect our business and results of operations.
Our business is exposed to risks associated with the creditworthiness of our key suppliers, customers and business partners and
reductions in demand for our customers' products. These risks include the interruption of production at the facilities of our
customers, the reduction, delay or cancellation of customer orders, delays in or the inability of customers to obtain financing to
purchase our products, delays in or interruptions of the supply of raw materials we purchase and bankruptcy of customers,
suppliers or other creditors. Furthermore, some of the industries in which our end-use customers participate, such as the
automotive, electrical, construction and textile industries, are highly competitive, to a large extent driven by end-use
applications, and may experience overcapacity, all of which may affect demand for and the pricing of our products. In addition,
many of these industries are highly cyclical in nature, thus posing risks to us that vary throughout the year and vary according
to macroeconomic factors. The occurrence of any of these events may adversely affect our cash flow, profitability and financial
condition.
We may incur significant charges in the event we close or divest all or part of a manufacturing plant or facility.
We periodically assess our manufacturing operations in order to manufacture and distribute our products in the most efficient
manner. Based on our assessments, we may make capital improvements to modernize certain units, move manufacturing or
distribution capabilities from one plant or facility to another plant or facility, discontinue manufacturing or distributing certain
products or close or divest all or part of a manufacturing plant or facility. We also have shared services agreements at several of
our plants and if such agreements are terminated or revised, we would assess and potentially adjust our manufacturing
operations. The closure or divestiture of all or part of a manufacturing plant or facility could result in future charges that could
be significant. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial
statements for further information.
The insurance coverage that we maintain may not fully cover all operational risks.
We maintain property, business interruption, casualty and cyber/information security insurance but such insurance may not
cover all of the risks associated with the hazards of our business and is subject to limitations, including deductibles and
maximum liabilities covered. We may incur losses beyond the limits, or outside the coverage, of our insurance policies,
including liabilities for environmental remediation. In the future, the types of insurance we obtain and the level of coverage we
maintain may be inadequate or we may be unable to continue to maintain our existing insurance or obtain comparable insurance
at a reasonable cost.
Risks associated with our joint ventures, including differences in views with our joint venture partners may cause them not
to operate according to their business plans, which may adversely affect our results of operations.
We currently participate in a number of joint ventures, acquired interests in several additional joint ventures through the M&M
Acquisition and may enter into additional joint ventures in the future. Our joint ventures require us to work cooperatively with
unaffiliated third parties. Differences in views among joint venture participants may result in delayed decisions or failure to
agree on major decisions. Additionally, our partners may be unable or unwilling to meet their economic or other obligations to
the joint ventures, which could negatively impact them. If these risks cause the joint ventures to fail to achieve their desired
operating performance, our results of operations could be adversely affected.
Our significant non-U.S. operations expose us to global exchange rate fluctuations that could adversely impact our
profitability.
We conduct a significant portion of our operations outside the U.S. Consequently, fluctuations in currencies of other countries,
especially the euro, may materially affect our operating results. Because our consolidated financial statements are presented in
U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. dollars based on
average exchange rates prevailing during the reporting period or the exchange rate at the end of that period. Therefore, increases
or decreases in the value of the U.S. dollar against other major currencies will affect our net operating revenues, operating
income and the cost of balance sheet items denominated in foreign currencies. Foreign exchange rates can also impact the
competitiveness of products produced in certain jurisdictions and exported for sale into other jurisdictions. These changes may
impact the value received for the sale of our goods versus those of our competitors.
In addition to currency translation risks, we incur a currency transaction risk whenever one of our operating subsidiaries enters
into a purchase or sales transaction using a currency different from the operating subsidiary's functional currency. Given the
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volatility of exchange rates, particularly the strengthening of the U.S. dollar against major currencies or the currencies of large
developing countries, we may not be able to manage our currency transaction and translation risks effectively.
We use financial instruments to hedge certain exposure to foreign currency fluctuations, but those hedges in most cases cover
existing balance sheet exposures and not future transactional exposures. We cannot guarantee that our hedging strategies will be
effective. In addition, the use of financial instruments creates counterparty settlement risk. Failure to effectively manage these
risks could have an adverse impact on our financial position, results of operations and cash flows.
We are subject to information or operational technology cybersecurity threats that could materially affect our business.
We have been and will continue to be subject to advanced and persistent threats in the areas of information and operational
technology security and fraud. We seek to prevent unauthorized access to our information and operational technology systems
and to detect and investigate any cybersecurity incidents that may occur, however in some cases we might be unaware of a
particular incident or its magnitude and effects. We may face increased information technology security and fraud risks due to
our increased reliance on working remotely during and following the COVID-19 pandemic, which may create additional
information security vulnerabilities and/or magnify the impact of any disruption in information technology systems.
Additionally, we may be exposed to unauthorized access to our information or operational technology systems through
undetected vulnerabilities in our service providers' information systems or software. These risks may be heightened as a result
of our efforts to integrate the M&M Business's technology environment with our own.
The theft, misuse or publication of our intellectual property and/or confidential business information or the compromising of
our systems or networks (including through ransomware or denial-of-service attacks) could harm our competitive position,
cause operational disruption (including the potential to disrupt or compromise our control of physical plant operations at our
manufacturing sites), reduce the value of our investment in research and development of new products and other strategic
initiatives or otherwise adversely affect our business or results of operations. To the extent that any security breach impacts
operations at our manufacturing sites, we may experience production or shipping disruptions. To the extent that any security
breach results in inappropriate disclosure of our employees', customers' or vendors' confidential or personally identifiable
information, we may incur liability or suffer reputational damage in the marketplace as a result. We maintain cyber/information
security insurance, but any losses may be beyond the limits, or outside the coverage, of our policy.
Information and operational security threats and methods of perpetrating fraud or misappropriating information are constantly
evolving and becoming more complex, which increases the difficulty and expense of defending against these threats. Although
we attempt to mitigate these risks by employing a number of measures, including insurance, monitoring of our systems and
networks, employee training, crisis simulations and maintenance of backup and protective systems, our systems, networks,
products and services remain potentially vulnerable to increasingly sophisticated advanced persistent threats that may have a
material effect on our business. In addition, the devotion of additional resources to the security of our information or
operational technology systems in the future could significantly increase the cost of doing business or otherwise adversely
impact our financial results.
Risks Relating to the acquisition of the majority of the Mobility & Materials business (the "M&M Acquisition" and
such business being acquired, the "M&M Business") of DuPont de Nemours, Inc. ("DuPont")
We made certain assumptions relating to the M&M Acquisition which may prove to be materially inaccurate and we may
fail to realize all of the anticipated benefits of the acquisition.
We made certain assumptions relating to the M&M Acquisition, which may prove to be inaccurate. Expectations of future
results may not materialize and we face risk of unanticipated or unknown issues or liabilities. Our mitigation strategies for such
risks that are identified may be ineffective. We face risks and uncertainties regarding:
•
•
•
•
performance of the M&M Business in future economic and business conditions;
the process of integrating the M&M Business with ours, which may encounter unanticipated delays, costs or
inefficiencies;
the amount and timing of potential benefits and synergies;
the amount of attention and resources needed to successfully align our and the M&M Business's practices and
operations including integrating commercial activities and technologies, retaining key personnel and aligning business
cultures;
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•
•
potential commercial, macroeconomic and financial risks associated with our broader international business footprint;
and
other financial and strategic risks of the M&M Acquisition.
We cannot guarantee that we will achieve our goals or meet our expectations with respect to the M&M Acquisition. Through
2022, the M&M Business underperformed prior expectations, in particular its financial performance from signing through the
closing was lower than anticipated. We cannot be certain when we will be able to realize improvements in the underlying M&M
Business performance and as we proceed with integration, we may identify additional risks and challenges. The benefits of the
M&M Acquisition, including the anticipated financial benefits and the synergies and growth opportunities, may not be realized
as expected or may not be achieved within the anticipated timeframe, or at all. If our assumptions are inaccurate or we are
unable to meet our expectations (including our expectations regarding financial targets), our business, financial performance
and operating results could be materially and adversely affected.
We will incur direct and indirect costs as a result of the M&M Acquisition.
We have incurred and expect to continue to incur a number of non-recurring costs associated with completing the M&M
Acquisition, combining the operations of our business and the M&M Business and achieving desired synergies. These fees and
costs have been, and will continue to be, substantial. Non-recurring expenses include, among others, employee retention costs,
fees paid to financial, legal, integration and accounting advisors, severance and benefit costs. We will also incur transaction fees
and costs related to formulating and implementing integration plans, including facilities and systems consolidation costs and
employment-related costs. We will continue to assess the magnitude of these costs, and additional unanticipated costs may be
incurred in the M&M Acquisition and the integration of the M&M Business into our business. Although we expect that the
elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the M&M Business,
should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.
Factors beyond our control could affect the total amount or timing of these expenses, many of which, by their nature, are
difficult to estimate accurately.
The risk of non-compliance with non-U.S. laws, regulations and policies could adversely affect our results of operations,
financial condition or strategic objectives.
The M&M Acquisition introduces us into a number of new geographic markets, subjecting us to additional non-U.S. laws,
regulations and policies which do not currently apply to us, and will increase our exposure to certain other geographic markets
as well as their laws and regulations. These laws and regulations are complex, change frequently, have become more stringent
over time, could increase our cost of doing business, and could result in conflicting legal requirements. Therefore, the M&M
Acquisition may increase our exposure to the risks described below under "Regulatory, Legal, Environmental and Tax Risks."
Regulatory, Legal, Environmental and Tax Risks
Failure to comply with applicable laws or regulations and/or changes in applicable laws or regulations may adversely affect
our business and financial results as a whole.
We are subject to extensive international, national, state, local and other laws and regulations. Failure to comply with these
laws, including antitrust, anticorruption and sanctions laws, rules, regulations or court decisions, could expose us to fines,
penalties and other costs. For example, in December 2019 we announced the recording of a reserve in connection with a
competition law investigation by the European Commission based on certain past ethylene purchases by certain subsidiaries of
the Company, and in July 2020, we announced that we had reached a final settlement of $92 million with respect to this
investigation. The Company paid this settlement in full on January 12, 2021. Although we have implemented policies,
procedures and employee training designed to ensure compliance with these laws, rules, regulations and court decisions, there
can be no assurance that our employees and business partners and other third parties acting on our behalf will comply with
these laws, rules, regulations and court decisions, which could result in fines, penalties and costs and damage to our business
reputation.
Moreover, changes in laws or regulations, including the more aggressive enforcement of such laws and regulations, such as
unexpected changes in regulatory requirements (including trade compliance requirements), or changes in reporting
requirements of the U.S., Canadian, Mexican, German, EU or Asian governmental agencies, could increase the cost of doing
business in these regions. In addition, enforcement of environmental or other governmental policy may result in plant shut
downs or significantly decreased production, such as in China on high pollution days. For example, in 2021 we experienced
energy curtailment mandates from the government in the Chinese province where our Nanjing production facility is located,
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which forced us to reduce and curtail production at that site. Any of these types of conditions, including the failure to obtain or
maintain operating permits for our business, may have an effect on our business and financial results as a whole and may result
in volatile current and future prices for our products and raw materials. See Note 19 - Commitments and Contingencies in the
accompanying consolidated financial statements for further information.
Our business exposes us to potential product liability, warranty, and tort claims, and recalls, which could adversely affect
our financial condition and performance.
The development, manufacture and sale of specialty chemical products by us, including products produced for the food and
beverage, medical device, pharmaceutical, automobile, construction, appliance, cigarette and aerospace end markets, involves a
risk of exposure to product liability, warranty, and tort claims, product recalls, product seizures and related adverse publicity. A
product liability, warranty, or tort claim or judgment against us that is larger than those typically experienced in the regular
course of business could also result in substantial and unexpected expenditures, affect consumer or customer confidence in our
products, and divert management's attention from other responsibilities. Although we maintain product liability insurance, there
can be no assurance that this type or the level of coverage is adequate or that we will be able to continue to maintain our
existing insurance or obtain comparable insurance at a reasonable cost, if at all. A product recall or a significant partially or
completely uninsured judgment against us could have a material adverse effect on our results of operations or financial
condition. Although we have standard contracting policies and controls, we may not always be able to contractually limit our
exposure to third party claims should our failure to perform result in downstream supply disruptions or product recalls.
Environmental regulations and other obligations relating to environmental matters could subject us to liability for fines,
clean-ups and other damages, require us to incur significant costs to modify our operations and increase our manufacturing
and delivery costs.
Costs related to our compliance with environmental, health and safety laws and regulations, and potential obligations with
respect to sites currently or formerly owned or operated by us, may have a negative impact on our operating results. We also
have obligations related to the indemnity agreement contained in the demerger and transfer agreement between Celanese GmbH
and Hoechst AG for environmental matters arising out of certain divestitures that took place prior to the demerger. See Note 13
- Environmental in the accompanying consolidated financial statements for further information.
Our operations are subject to extensive international, national, state, local and other laws and regulations that govern
environmental, health and safety matters and that regulate the handling, manufacture, use, emission and disposal of products,
materials and hazardous and non-hazardous waste. If we violate any one of those laws or regulations, we can be held liable for
substantial fines and other sanctions, including limitations on our operations as a result of changes to or revocations of
environmental permits involved. We could also face claims for damages from individuals or groups for alleged violations of
these laws or regulations.
We also incur substantial capital and other costs to comply with environmental, health and safety requirements. Stricter
environmental, safety and health laws and regulations could result in substantial additional costs and liabilities to us or
limitations on our operations. Consequently, compliance with these laws and regulations may negatively affect our earnings and
cash flows in a particular reporting period. See Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources for further information.
For more information on risks we face specifically related to climate change and related potential regulation, see the risk factor
titled "We are subject to financial, regulatory, physical and transition risks associated with climate change or other
sustainability matters as well as potential legislation, regulation and international accords to address climate change and other
sustainability matters" below.
Changes in environmental, health and safety regulations in the jurisdictions where we manufacture or sell our products
could lead to a decrease in demand for our products.
New or revised governmental regulations, independent studies or consumer or societal perceptions relating to the effect of our
products on health, safety or the environment may affect demand for our products and the cost of producing our products. In
addition, products we produce, including VAM, formaldehyde and polymers derived from formaldehyde, may be classified and
labeled in a manner that would adversely affect demand for such products. For example, in 2019 the EPA designated
formaldehyde as a high-priority substance under the Toxic Substances Control Act and the substance is currently undergoing
risk evaluation. In addition, in 2012 the International Agency for Research on Cancer ("IARC"), a research agency within the
World Health Organization, classified formaldehyde as carcinogenic to humans (Group 1) based on epidemiological studies
linking formaldehyde exposure to nasopharyngeal cancer, a rare cancer in humans, and leukemia. In 2011, a similar conclusion
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was reached by the National Toxicology Program ("NTP"), a U.S. inter-agency research program. We anticipate that the results
of the IARC's and the NTP's reviews will continue to be examined and considered by government regulatory agencies with
responsibility for setting worker and environmental exposure standards and labeling requirements.
Other initiatives, including the Chemical Strategy for Sustainability initiative currently to be undertaken by the EU as part of
the Green Deal will potentially require, or increase existing requirements for, toxicological testing and risk assessments of a
wide variety of chemicals, including chemicals used or produced by us. These assessments may result in heightened concerns
about the chemicals involved and additional regulatory requirements being placed on the production, handling, labeling and/or
use of the subject chemicals. The new requirements may necessitate reformulation of products in order to meet customers'
demands, which would be a financially burdensome process.
Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products
and otherwise limit the use of these products, which could lead to a decrease in demand for these products. Such a decrease in
demand would likely have an adverse impact on our business and results of operations.
We are subject to financial, regulatory, physical and transition risks associated with climate change or other sustainability
matters as well as potential legislation, regulation and international accords to address climate change and other
sustainability matters.
Greenhouse gas ("GHG") emissions have become the subject of significant international, national, regional, state and local
attention. For example, the EPA and SEC have promulgated or proposed extensive rules concerning reporting of GHG
emissions. The European Commission has also embarked on the European Green Deal initiative with the goal of making the EU
carbon neutral by 2050, which is leading to additional statutory and regulatory requirements. In addition, regulation of
greenhouse gas also could occur pursuant to future treaty obligations, statutory or regulatory changes or new climate change
legislation intended to reduce or mitigate the effects of GHG emissions. Compliance with such legislation, regulation and
accords and the associated potential cost is complicated by the fact that various countries and regions are following different
approaches and standards to the regulation of climate change.
A number of our operations are within jurisdictions that have or are developing regulatory regimes governing GHG emissions,
which may lead to direct and indirect costs on our operations. Some jurisdictions have emissions reduction measures directed at
the power or oil and gas sectors, which could result in higher power input costs or reduced energy availability for us. Other
regulations that are being implemented or contemplated include the potential for restrictions on GHG emissions, cap and trade
emissions trading systems, taxes on GHG emissions, fuel, and energy, or carbon import charges on certain products among
other provisions. These may exist in addition to country and corporate-level net-zero GHG emissions pledges. These measures,
if and where enacted, may significantly increase our costs of operations or require us to incur significant additional capital costs
for the installation of equipment to mitigate GHG emissions for our sites' manufacturing operations.
Physical impacts of climate change, such as increased frequency and severity of hurricanes and floods and impact on sea levels,
may also impact our facilities and operations and those of our key suppliers. A number of our sites are located in areas that are
exposed to weather events and changing sea levels (such as the Texas Gulf Coast) and that have been impacted by hurricanes
and other weather events in the past as described elsewhere in these risk factors. To the extent climate change exacerbates these
threats, our operations and supply chains could experience increased levels of disruptions and added costs.
Additionally, increased social, legislative and regulatory focus on climate change and other sustainability matters as well as
customer demand for responsibly manufactured products could lead to changes in the behavior of our customers or their end-
customers, and could result in reduced customer demand for products made from materials that are perceived to be significant
contributors to greenhouse gas emissions and global climate change. We may fail to accurately react to these trends and refine
our product offerings through innovation, or we may not be able to fully address these concerns through changes in
manufacturing methods or use of more sustainable materials and processes, which could result in reduced demand for our
products.
We closely monitor developments in this area, but there is significant uncertainty regarding what legislative or regulatory
requirements may be put in place, which makes it impossible for us to predict the longer-term impact these measures have on
our operations. However, we believe that future legislative and regulatory developments related to climate change are likely,
which could materially increase operating costs in the chemical industry and thereby increase our manufacturing and delivery
costs.
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Our aspirations, goals, and initiatives related to sustainability, and our public statements and disclosures regarding them,
expose us to risks.
We have developed and publicized, and expect to continue to establish, goals, targets, and other objectives related to
sustainability matters. These include a GHG intensity reduction target and other environmental targets. Such statements reflect
our current plans at the time they are made, and do not constitute a guarantee that they will be achieved. Our ability to track and
meet these goals depends on future innovations and technology and the availability of accurate reporting methods. Our efforts
to research, establish, accomplish, and accurately report on these goals, targets, and objectives could expose us to operational,
reputational, financial, legal, and other risks. Our ability to achieve any stated goal, target, or objective is and will be subject to
numerous factors and conditions, many of which are outside of our control, such as evolving regulatory or quasi-regulatory
sustainability standards, the ability of suppliers to meet our sustainability and other standards, differing requirements and the
pace of changes in technology.
We may face increased scrutiny from the investment community, other stakeholders, regulators, and the media related to our
sustainability activities, including the goals, targets, and objectives that we announce, and our methodologies and timelines for
pursuing them. If our sustainability practices do not meet investor or other stakeholder expectations and standards, which
continue to evolve, our reputation, ability to attract or retain employees, and attractiveness as an investment, business partner, or
as an acquirer could be negatively impacted, which could in turn adversely impact our business and results of operations.
Similarly, our failure or perceived failure to pursue or fulfill our goals, targets, and objectives, to comply with ethical,
environmental, or other standards, regulations, or expectations, or to satisfy various reporting standards with respect to these
matters, within the timelines that we announce, or at all, could have the same negative impacts, as well as expose us to
government enforcement actions and private litigation. Even if we achieve the goals, targets, and objectives we set, we may not
realize all of the benefits that it expected at the time they were established.
Our business and financial results may be adversely affected by various legal and regulatory proceedings.
We are involved in legal and regulatory proceedings, lawsuits, claims and investigations in the normal course of business and
could become subject to additional claims in the future, some of which could be material. The outcome of existing proceedings,
lawsuits, claims and investigations may differ from our expectations because the outcomes of such proceedings, including
regulatory matters, are often difficult to reliably predict. Various factors or developments can lead us to change current
estimates of liabilities and related insurance receivables where applicable, or permit us to make such estimates for matters
previously not susceptible to reasonable estimates, such as a significant judicial ruling or judgment, a significant settlement,
significant regulatory developments, or changes in applicable law. A future adverse ruling, settlement, or unfavorable
development could result in charges that could have a material adverse effect on our business, results of operations or financial
condition in any particular period. See Note 13 - Environmental and Note 19 - Commitments and Contingencies in the
accompanying consolidated financial statements for further information.
Changes in, or the interpretation of, tax legislation or rates throughout the world, or the resolution of tax examinations or
audits, could materially impact our results.
Our future effective tax rate and related tax balance sheet attributes could be impacted by changes in tax legislation throughout
the world. The overall tax environment has made it increasingly challenging for multinational corporations to operate with
certainty about taxation in many jurisdictions. For example, the European Commission has been conducting investigations
focusing on whether local country tax rulings or tax legislation provide preferential tax treatment that violates EU state aid
rules.
Furthermore, a number of countries where we do business, including the U.S. and many countries in the EU, have changed or
are considering changes in relevant tax, accounting and other laws, regulations and interpretations, including changes to tax
laws applicable to multinational corporations. Our future effective tax rates could be affected by changes in the mix of earnings
in countries with differing statutory tax rates, expirations of tax holidays or rulings, changes in the assessment regarding the
realization of deferred tax assets, or changes in tax laws and regulations or their interpretation. The increasingly complex global
tax environment and related legislative developments could have a material adverse effect on our effective tax rate, results of
operations, cash flows and financial condition.
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For example, the Organization of Economic Cooperation and Development (the "OECD"), which represents a coalition of
member countries, is supporting changes to numerous long-standing tax principles through its base erosion and profit shifting
initiatives, which focus on a number of issues, including (i) the shifting of profits among affiliated entities located in different
tax jurisdictions and (ii) a global minimum tax of at least 15% of adjusted financial statement income, applied on a country by
country basis, applicable to multinational groups with annual adjusted financial statement income in excess of $1.0 billion. The
adoption of such changes is contingent upon the independent actions of participating countries to enact implementing domestic
legislation.
Furthermore, in August 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted in the U.S. The IRA created a new book
minimum tax of at least 15% of consolidated GAAP pre-tax income for corporations with three-year average annual book
income in excess of $1.0 billion. The IRA also created an excise tax of 1% of the value of any stock repurchased by us after
December 31, 2022.
We are subject to the regular examination of our income tax returns by various tax authorities. Examinations in material
jurisdictions or changes in laws, rules, regulations or interpretations by local taxing authorities could result in impacts to tax
years open under statute or to foreign operating structures currently in place.
Our tax returns are under audit for the years 2013 through 2015 by the United States, the Netherlands and Germany. These
authorities have proposed adjustments to transfer pricing and the reallocation of income between the related jurisdictions to
open tax years through 2019. While we have reached resolution with the Netherlands, we are currently continuing with the
other taxing authorities and are evaluating all potential remedies. We are currently evaluating these proposals and all potential
remedies. If this matter is resolved in a manner inconsistent with our expectations or we are unsuccessful in defending our
position, our financial condition and operating results could be adversely impacted.
We cannot predict with certainty the outcome of tax examinations or audits. We regularly assess the likelihood of adverse
outcomes resulting from these examinations or changes in laws, rules, regulations or interpretations to determine the adequacy
of our provision for taxes. It is possible the outcomes from these examinations will have a material adverse effect on our
financial condition and operating results in future periods.
Risks Related to Our Human Capital
Our success depends upon our ability to attract and retain key employees and the identification and development of talent to
succeed senior management.
Our success depends on our ability to attract and retain key personnel including our management team. The inability to recruit
and retain talented employees or the unexpected loss of such talented employees or key personnel may adversely affect our
operations. Like many companies, we have experienced in the last couple of years and continue to experience an increasingly
competitive hiring environment for skilled employees at our manufacturing and other sites, which in some cases has increased,
or may in the future increase, the cost of retaining or hiring talented employees, particularly in technical manufacturing roles
critical to our success.
In addition, we rely on our senior management team specifically, therefore our future success depends in part on our ability to
retain those members of senior management and to identify and develop talent to succeed senior management. The hiring and
retention of key personnel and appropriate senior management succession planning will continue to be important to the
successful implementation of our strategies.
Significant changes in pension fund investment performance or assumptions relating to pension costs may have a material
effect on the valuation of pension obligations, the funded status of pension plans and our pension cost.
The cost of our pension plans is incurred over long periods of time and involves many uncertainties during those periods of
time. Our funding policy for pension plans is to accumulate plan assets that, over the long run, will approximate the present
value of projected benefit obligations. Our pension cost is materially affected by the discount rate used to measure pension
obligations, the level and value of plan assets available to fund those obligations at the measurement date and the expected
long-term rate of return on plan assets. Significant changes in investment performance or a change in the portfolio mix of
invested assets will likely result in corresponding increases and decreases in the valuation of plan assets and a change in the
discount rate or mortality assumptions, which will likely result in an increase or decrease in the valuation of pension
obligations. The combined impact of these changes will affect the reported funded status of our pension plans as well as the net
periodic pension cost in the following fiscal years. In recent years, an extended duration strategy in the asset portfolio has been
implemented in some plans to reduce the influence of liability volatility due to changes in interest rates. If the funded status of a
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pension plan declines, we may be required to make unscheduled contributions in addition to those contributions for which we
have already planned. See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further
information.
Some of our employees are unionized, represented by workers councils or are subject to local laws that are less favorable to
employers than the laws of the U.S.
As of December 31, 2022, we had 13,263 employees globally. Approximately 11% of our 4,722 U.S.-based employees are
unionized. In addition, a large number of our employees are employed in countries in which employment laws provide greater
bargaining or other employment rights than the laws of the U.S. Such employment rights require us to work collaboratively
with the legal representatives of the employees to effect any changes to labor agreements. Most of our employees in Europe are
represented by workers councils and/or unions that must approve any changes in terms and conditions of employment,
including potentially salaries and benefits. They may also impede efforts to restructure our workforce. Although we believe we
have a good working relationship with our employees and their legal representatives, a strike, work stoppage, or slowdown by
our employees could occur, resulting in a disruption of our operations or higher ongoing labor costs.
Risks Related to Our Indebtedness
Financing the M&M Acquisition significantly increased our indebtedness and interest expense, which could adversely affect
us, decrease our business flexibility, diminish our ability to raise additional capital to fund our operations or refinance our
existing indebtedness when it matures and limit our ability to react to changes in the economy or the chemicals industry.
See Note 11 - Debt in the accompanying consolidated financial statements for further information about our indebtedness. See
Note 12 - Benefit Obligations, Note 13 - Environmental and Note 19 - Commitments and Contingencies in the accompanying
consolidated financial statements for further information about our other obligations.
We incurred approximately $11.0 billion of indebtedness to finance the M&M Acquisition, bringing our total outstanding
indebtedness to $14.7 billion at December 31, 2022, compared to $4.0 billion at December 31, 2021. Also, the amount of cash
required to pay interest on our increased indebtedness, and thus the demands on our cash resources, has significantly increased
as a result of the indebtedness to finance the M&M Acquisition.
We intend to allocate capital to repay and reduce our outstanding debt using cash from operations and potentially proceeds from
asset sales or dispositions if we are able to do so on favorable terms. Our ability to reduce our level of indebtedness over time in
line with our strategic goals depends on a number of factors including our business performance, macroeconomic and industry
conditions, commercial and financing market conditions, and other factors described in these risk factors, and our inability to
achieve these objectives could delay or alter our deleveraging plan, or could negatively impact the trading prices of our
securities or our credit ratings.
Our higher level of indebtedness and other liabilities could have other important consequences, including:
•
•
•
•
•
•
Increasing our vulnerability to general economic and industry conditions, including exacerbating the impact of any
adverse business effects that could impact our ability to repay amounts due under existing senior credit agreements
(the "Credit Agreements") or our indentures (the "Indentures") governing our outstanding senior unsecured notes
(collectively, the "Senior Notes");
Requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on
indebtedness and amounts payable in connection with the satisfaction of our other liabilities, therefore reducing our
ability to use our cash flow to fund operations, capital expenditures and future business opportunities or pay dividends
on our common stock, par value $0.0001 per share ("Common Stock");
Reducing our flexibility to respond to changing business and economic conditions;
Exposing us to the risk of increased interest rates as certain of our borrowings are at variable rates of interest;
Exposing us to the risk of changes in currency exchange rates as certain of our borrowings are denominated in foreign
currencies; and
Limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt
service requirements, acquisitions and general corporate or other purposes.
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We may not be able to generate sufficient cash to service our indebtedness and may be forced to take other actions to satisfy
obligations under our indebtedness, which may not be successful.
If our cash flows and capital resources are insufficient to fund our debt obligations, we may be forced to reduce or delay capital
expenditures, sell assets on unfavorable terms, seek additional capital or restructure or refinance our indebtedness. These
alternative measures may not be successful and may not permit us to meet our scheduled debt service and other obligations. In
the absence of such operating results and resources, we could face substantial liquidity problems and might be required to
dispose of material assets or operations to meet our debt service and other obligations. We may not be able to complete those
dispositions or to obtain the proceeds that we could realize from them, and these proceeds may not be adequate to meet any debt
service obligations then due.
Restrictive covenants in our debt agreements may limit our ability to engage in certain transactions and may diminish our
ability to make payments on our indebtedness or pay dividends.
The Credit Agreements, the Indentures and the Receivables Purchase Agreement governing our receivables securitization
facility each contain various covenants that limit our ability to engage in specified types of transactions. The Credit Agreements
and the Indentures contain covenants including, but not limited to, restrictions on our and certain of our subsidiaries' ability to
incur additional debt; incur liens securing debt; merge or consolidate with any other person; and sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of the Issuer's assets or the assets of certain subsidiaries. Additionally, the
Credit Agreements require the maintenance of certain financial ratios.
Such restrictions in our debt obligations could result in us having to obtain the consent of our lenders and holders of the Senior
Notes in order to take certain actions. Disruptions in credit markets may prevent us from obtaining or make it more difficult or
more costly for us to obtain such consents. Our ability to expand our business or to address declines in our business may be
limited if we are unable to obtain such consents.
A breach of any of these covenants could result in a default, which, if not cured or waived, could have a material adverse effect
on our business, financial condition and results of operations. Furthermore, a default under any of the Credit Agreements could
permit lenders to accelerate the maturity of our indebtedness under such Credit Agreement and to terminate any commitments
to lend. If the lenders under any Credit Agreement accelerate the repayment of such indebtedness, we may not have sufficient
liquidity to repay such amounts or our other indebtedness, including the Senior Notes. In such event, we could be forced into
bankruptcy or liquidation.
Celanese and Celanese U.S. are holding companies and depend on subsidiaries to satisfy their obligations under the Senior
Notes and the guarantee of Celanese U.S.'s obligations under the Senior Notes and the Credit Agreements by Celanese.
As holding companies, Celanese and Celanese U.S. conduct substantially all of their operations through their subsidiaries,
which own substantially all of our consolidated assets. Consequently, the principal source of cash to pay Celanese and Celanese
U.S.'s obligations, including obligations under the Senior Notes and the guarantee of Celanese U.S.'s obligations under the
Credit Agreements and the Indentures by Celanese, is the cash that our subsidiaries generate from their operations. We cannot
assure that our subsidiaries will be able to, or be permitted to, make distributions to enable Celanese U.S. and/or Celanese to
make payments in respect of their obligations. Each of our subsidiaries is a distinct legal entity and, under certain
circumstances, applicable country or state laws, regulatory limitations and terms of our debt instruments may limit our
subsidiaries' ability to distribute cash to Celanese U.S. and Celanese. In the event Celanese U.S. and/or Celanese do not receive
distributions from our subsidiaries, Celanese U.S. and/or Celanese may be unable to make required payments on the
indebtedness under the Credit Agreements, the Indentures, the guarantee of Celanese U.S.'s obligations under the Credit
Agreements and the Indentures by Celanese, or our other indebtedness.
Item 1B. Unresolved Staff Comments
None.
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Item 2. Properties
Description of Property
Our corporate headquarters is located in Irving, Texas and we also have administrative offices in Amsterdam, Netherlands;
Asturias, Spain; Budapest, Hungary; Hyderabad, India; Kunshan, China; Mexico City, Mexico; Nanjing, China; Shanghai,
China; and Sulzbach, Germany. We own or lease numerous production and manufacturing facilities throughout the world. We
also own or lease other properties, including office buildings, warehouses, pipelines, research and development facilities and
sales offices. We continuously review and evaluate our facilities as a part of our strategy to optimize our business portfolio. The
following table sets forth our principal production and other facilities throughout the world as of December 31, 2022. These
facilities are well-maintained, in good operating condition, are suitable and adequate for their use and have sufficient capacity
for our current needs and expected near-term growth.
Geographic Region
North America
Europe and Africa
Asia-Pacific
South America
Total
Engineered Materials(1)
Owned
Leased
Acetyl Chain(1)
Leased
Owned
Corporate
Leased
11
5
5
3
24
9
5
8
1
23
1
1
3
—
5
7
5
—
—
12
2
4
4
—
10
______________________________
(1) Certain geographic locations may contain sites used by multiple segments.
We have also entered into strategic ventures with partners in various locations around the world. See Item 1. Business for a
discussion of our investments in affiliates and their respective site locations.
Item 3. 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 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 13 - Environmental and Note 19 - Commitments and
Contingencies in the accompanying consolidated financial statements for a discussion of material environmental matters and
material commitments and contingencies related to legal and regulatory proceedings. See Item 1A. Risk Factors for certain risk
factors relating to these legal proceedings.
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Item 4. Mine Safety Disclosures
Not applicable.
Information about our Executive Officers
The names, ages and biographies of our executive officers as of February 24, 2023 are as follows:
Name
Lori J. Ryerkerk ......................
Scott A. Richardson ................
Thomas F. Kelly .....................
Mark C. Murray ......................
A. Lynne Puckett ....................
Position
Age
60 Chair of the Board of Directors, Chief Executive Officer and President
46 Executive Vice President and Chief Financial Officer
57 Senior Vice President, Engineered Materials
52 Senior Vice President, Acetyls
60 Senior Vice President and General Counsel
Lori J. Ryerkerk was named our Chief Executive Officer and President and a member of our board of directors effective
May 2019. In April 2020, she was named Chair of the Board. Previously, Ms. Ryerkerk was the Executive Vice President of
Global Manufacturing, the largest business in Shell Downstream Inc., where she led a team of 30,000 employees and
contractors at refineries and chemical sites worldwide. Ms. Ryerkerk joined Shell in May 2010 as the Regional Vice President
of Manufacturing in Europe and Africa, and was responsible for the operation of five Shell manufacturing facilities and five
joint ventures. In October 2013, she was named Executive Vice President of Global Manufacturing, Shell Downstream Inc.
Before joining Shell, she was Senior Vice President, Refining, Supply and Terminals at Hess Corporation, where she was
responsible for refineries, terminals and a distribution network, and supply and trading. Prior to that, Ms. Ryerkerk spent 24
years with ExxonMobil where she started her career as a process technologist at a refinery in Baton Rouge, Louisiana.
Throughout her tenure at ExxonMobil, she took on a variety of operational and senior leadership roles in Refining and
Chemicals Manufacturing, Power Generation, and various other groups including Supply, Economics and Planning, HSSE and
Public Affairs/Government Relations. Ms. Ryerkerk received a Chemical Engineering degree from Iowa State University. She
serves on the board of Eaton Corporation plc, a diversified power management company, and previously served on the board of
directors of Axalta Coating Systems, a leading provider of liquid and powder coatings.
Scott A. Richardson was named Chief Financial Officer for Celanese Corporation in February 2018 after serving as Senior
Vice President of the Engineered Materials business since December 2015, where he had global responsibility for strategy,
product and business management, planning and portfolio development, and pipeline management. He was promoted to
Executive Vice President in March 2020. Previously, Mr. Richardson served as Vice President and General Manager of the
Acetyl Chain since 2011. Mr. Richardson has progressed through several Celanese roles including global commercial director,
Acetyls; manager of Investor Relations; business analysis manager, Acetyls; and business line controller, Polyols and Solvents.
He joined Celanese in 2005. Prior to joining Celanese, Mr. Richardson held various finance, operational and leadership roles at
American Airlines. He earned a Bachelor of Arts in Accounting from Westminster College and a Master of Business
Administration from Texas Christian University.
Thomas F. Kelly was named Senior Vice President, Engineered Materials in April 2020, leading the Engineered Materials
business with global responsibility for product and business management, planning and portfolio development, and pipeline
management. He had previously served as Vice President of Engineered Materials with Celanese since January 2019. He re-
joined Celanese in January 2019 after serving with Cabot Microelectronics (now CMC Materials), a global supplier of
consumable materials to semiconductor manufacturers and pipeline companies, from September 2016 to January 2019. At
Cabot Microelectronics he held the roles of Vice President and Chief Commercial Officer and Vice President of Corporate
Development. He was previously with Celanese from August 2012 to September 2016 as Director of Raw Materials, where he
led a team responsible for sourcing strategic raw materials. Before joining Celanese, he had additional roles in supply chain,
sales and manufacturing management with Chemtura, Cabot Microelectronics and Rohm & Haas. Mr. Kelly also served as a
board member of Nucera Solutions, a provider of specialty polymer solutions, from June 2021 through August 2022, and of
Vertellus Global Holdings LLC, a supplier of specialty chemical products, from August 2019 through December 2020. He
holds a Master of Business Administration from Drexel University, and Master's and Bachelor's Degrees in Chemical
Engineering from Villanova University.
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Mark C. Murray was named Senior Vice President, Acetyls in February 2023 after having served as the interim leader of
Celanese's Acetyls Business since November 2022. Before rejoining Celanese in June 2022 as Vice President of Business
Strategy and Development, Mr. Murray served as Executive Vice President, Biomaterials and Advanced Technologies at
Avantor, a global materials manufacturer and distributor. Mr. Murray previously served in senior commercial and business
roles within the Acetyl Chain and Engineered Materials businesses at Celanese from November 2009 through June 2019 and
from May 2002 to March 2007. Earlier in his career he served as a consultant with McKinsey & Co. Mr. Murray holds a
Bachelor of Science degree in Chemical Engineering from the University of Texas at Austin and a Master of Business
Administration from Northwestern University.
A. Lynne Puckett joined Celanese Corporation in February 2019 as Senior Vice President and General Counsel. Prior to that,
Ms. Puckett was Senior Vice President‚ General Counsel and Secretary of Colfax Corporation since 2010. Prior to Colfax‚ she
was a Partner with the law firm of Hogan Lovells. Her experience includes a broad range of corporate and transactional
matters‚ including mergers and acquisitions‚ venture capital financings‚ debt and equity offerings‚ and general corporate and
securities law matters. Before entering the practice of law‚ Ms. Puckett worked for the U.S. Central Intelligence Agency and a
major U.S. defense contractor. She currently serves on the board of directors of Markel Corporation, an insurance and
investment operations holding company and is a member of the Board of Trustees of the American Shakespeare Center. Ms.
Puckett received a Juris Doctor degree from the University of Maryland School of Law and a Bachelor of Science degree from
James Madison University.
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PART II
Item 5. Market for the Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity
Securities
Market Information
Our common stock, par value $0.0001 per share ("Common Stock"), has traded on the New York Stock Exchange under the
symbol "CE" since January 21, 2005.
Holders
As of February 10, 2023, there were 111 holders of record of our Common Stock. A substantially greater number of holders of
our common stock are "street name" or beneficial holders, whose shares of record are held by banks, brokers and other financial
institutions.
Dividend Policy
The amount available to us to pay cash dividends is not currently restricted by our existing senior credit facilities and our
indentures governing our senior unsecured notes. Also, the general corporation law of the State of Delaware imposes
restrictions on the payment of dividends by all Delaware corporations that do not currently limit our ability to pay our current
and anticipated regular cash dividends. See Note 14 - Shareholders' Equity in the accompanying consolidated financial
statements for further information.
Celanese Purchases of its Equity Securities
We did not repurchase any Common Stock during the three months ended December 31, 2022. As of December 31, 2022, 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 14 - Shareholders'
Equity in the accompanying consolidated financial statements for further information.
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Performance Graph
The following performance graph compares the cumulative total return on Celanese Corporation Common Stock from
December 31, 2017 through December 31, 2022 to that of the Standard & Poor's ("S&P") 500 Stock Index and the Dow Jones
U.S. Chemicals Index. Cumulative total return represents the change in stock price and the amount of dividends received during
the indicated period, assuming reinvestment of all dividends. The performance graph assumes an investment of $100 on
December 31, 2017. The stock performance shown in the graph is included in response to SEC requirements and is not intended
to forecast or to be indicative of future performance.
Comparison of Cumulative Total Return
The above performance graph and related information shall not be deemed "soliciting material" or to be "filed" with the
Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the
Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically
incorporate it by reference into such filing.
Recent Sales of Unregistered Securities
Our deferred compensation plan offers certain of our senior employees and directors the opportunity to defer a portion of their
compensation in exchange for a future payment amount equal to their deferments plus or minus certain amounts based upon the
market-performance of specified measurement funds selected by the participant. These deferred compensation obligations may
be considered securities of Celanese. Participants were required to make deferral elections under the plan prior to January 1 of
the year such deferrals will be withheld from their compensation. We relied on the exemption from registration provided by
Section 4(a)(2) of the Securities Act in making this offer to a select group of employees, fewer than 35 of which were non-
accredited investors under the rules promulgated by the Securities and Exchange Commission.
Item 6. Reserved
This item is no longer required, as the Company has adopted the amendment to Item 301 of Regulation S-K contained in SEC
Release No. 33-10890, which became effective on February 10, 2021.
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
In this Annual Report on Form 10-K ("Annual 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 accompanying consolidated financial statements and notes to
the consolidated financial statements, 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 Annual 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.
Forward-Looking Statements
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and other parts of this
Annual Report contain certain forward-looking statements 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 at the time that the statements are made, 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.
See "Special Note Regarding Forward-Looking Statements" at the beginning of this Annual Report for further discussion. All
forward-looking statements made in this Annual Report are made as of the date hereof, and the risk that actual results will differ
materially from expectations expressed in this Annual 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
Item 1A. Risk Factors of this Annual Report also contains a description of certain risk factors that you should consider which
could significantly affect our 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;
volatility or changes in the price and availability of raw materials and energy, particularly changes in the demand for,
supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and
other energy sources;
the length and depth of product and industry business cycles particularly in the automotive, electrical, textiles, electronics
and construction industries;
the ability to pass increases in raw material prices, logistics costs and other costs on to customers or otherwise improve
margins through price increases;
the accuracy or inaccuracy of our beliefs or assumptions regarding anticipated benefits of the acquisition (the "M&M
Acquisition") by us of the majority of the Mobility & Materials business (the "M&M Business") of DuPont de Nemours,
Inc. ("DuPont"), including as a result of the performance of the M&M Business between signing and closing of the M&M
Acquisition;
the possibility that we will not be able to realize anticipated improvements in the M&M Business's financial performance –
including optimizing pricing, currency mix and inventory – or realize the anticipated benefits of the M&M Acquisition,
including synergies and growth opportunities, within the anticipated timeframe or at all, whether as a result of difficulties
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arising from the operation or integration of the M&M Business or other unanticipated delays, costs, inefficiencies or
liabilities;
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;
diversion of management's attention from ongoing business operations and opportunities and other disruption caused by the
M&M Acquisition and the integration processes and their impact on our existing business and relationships;
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
occurrence of acts of war (such as the Russia-Ukraine 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, 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;
changes in currency exchange rates and interest rates; and
various other factors, both referenced and not referenced in this Annual Report.
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Many of these factors are macroeconomic in nature and are, therefore, beyond our control. COVID-19 and responses to the
pandemic by governments and businesses, have significantly increased financial, economic and cost volatility and uncertainty,
exacerbating the risks and potential impact of these factors. 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 Annual 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 their dates.
Results of Operations
Financial Highlights
Year Ended
December 31,
2022
2021
Change
(In $ millions, except percentages)
Statement of Operations Data
Net sales ............................................................................................................................
Gross profit ....................................................................................................................
Selling, general and administrative ("SG&A") expenses .................................................
Other (charges) gains, net .................................................................................................
Operating profit (loss) ....................................................................................................
Equity in net earnings (loss) of affiliates ..........................................................................
Non-operating pension and other postretirement employee benefit (expense) income ....
Interest expense .................................................................................................................
Interest income ..................................................................................................................
Dividend income - equity investments .............................................................................
Earnings (loss) from continuing operations before tax ..................................................
Earnings (loss) from continuing operations ...................................................................
Earnings (loss) from discontinued operations ................................................................
Net earnings (loss) .....................................................................................................
Net earnings (loss) attributable to Celanese Corporation ..........................................
Other Data
Depreciation and amortization ..........................................................................................
SG&A expenses as a percentage of Net sales ...................................................................
Operating margin(1)
...........................................................................................................
Other (charges) gains, net
9,673
2,380
(824)
(8)
1,378
220
17
(405)
69
133
1,421
1,910
(8)
1,902
1,894
8,537
2,682
(633)
3
1,946
146
106
(91)
8
147
2,248
1,918
(22)
1,896
1,890
462
8.5 %
14.2 %
371
7.4 %
22.8 %
Restructuring ..................................................................................................................
Asset impairments ..........................................................................................................
Plant/office closures .......................................................................................................
Total Other (charges) gains, net ................................................................................
(6)
(14)
12
(8)
(5)
(2)
10
3
_____________________________
(1) Defined as Operating profit (loss) divided by Net sales.
1,136
(302)
(191)
(11)
(568)
74
(89)
(314)
61
(14)
(827)
(8)
14
6
4
91
(1)
(12)
2
(11)
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As of December 31,
2022
2021
(In $ millions)
Balance Sheet Data
Cash and cash equivalents ...................................................................................................................
1,508
536
Short-term borrowings and current installments of long-term debt - third party and affiliates ...........
Long-term debt, net of unamortized deferred financing costs .............................................................
Total debt ........................................................................................................................................
1,306
13,373
14,679
791
3,176
3,967
Factors Affecting Business Segment Net Sales
The percentage increase (decrease) in Net sales attributable to each of the factors indicated for each of our business segments is
as follows:
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Engineered Materials .............................................................................
Acetyl Chain ..........................................................................................
Total Company ..................................................................................
33
(6)
6
23
6
11
(8)
(3)
(4)
48
(3)
13
Volume
Price
Currency
Total
(In percentages)
Consolidated Results
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Net sales increased $1.1 billion, or 13%, for the year ended December 31, 2022 compared to the same period in 2021 primarily
due to:
•
•
higher pricing in both of our segments, primarily driven by our Engineered Materials segment, due to higher raw
material costs, higher energy costs and product mix; and
higher volume in our Engineered Materials segment, primarily in elastomers related to our acquisition of the majority
of the Mobility & Materials business (the "M&M Business"), our acquisition of the Santoprene™ thermoplastic
vulcanizates elastomers business of Exxon Mobil Corporation ("Santoprene"), as well as the Korea Engineering
Plastics Co., Ltd., ("KEPCO") restructuring;
partially offset by:
•
•
an unfavorable currency impact resulting from a weaker euro relative to the U.S. dollar; and
lower volume in our Acetyl Chain segment, primarily due to decreased demand in Asia.
Selling, general and administrative expenses increased $191 million, or 30%, for the year ended December 31, 2022 compared
to the same period in 2021, primarily due to:
•
higher functional and project spending of $187 million in Other Activities, primarily related to our acquisitions of the
M&M Business and Santoprene.
Operating profit decreased $568 million, or 29%, for the year ended December 31, 2022 compared to the same period in 2021
primarily due to:
•
•
higher raw material and energy costs in both of our segments;
higher spending in both of our segments, primarily as a result of our acquisitions of the M&M Business and
Santoprene, as well as increased plant operating and maintenance expenses; and
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•
lower Net sales in our Acetyl Chain segment;
partially offset by:
•
higher Net sales in our Engineered Materials segment.
Non-operating pension and other postretirement employee benefit income decreased $89 million for the year ended
December 31, 2022 compared to the same period in 2021 primarily due to an increase in recognized actuarial loss of
$40 million as a result of lower than expected actual asset returns, partially offset by an increase in the weighted average
discount rate used to determine benefit obligations from 2.5% to 4.9% and a decrease in expected asset returns of $39 million.
See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.
Our effective income tax rate for the year ended December 31, 2022 was (34)% compared to 15% for the year ended 2021. The
lower effective income tax rate for the year ended December 31, 2022 compared to the same period in 2021 was primarily due
to the reorganization of our foreign legal entity holding structure and relocation of certain of our intangible assets to align with
the acquired M&M Business foreign operations. See Note 15 - Income Taxes in the accompanying consolidated financial
statements for further information.
Discussion of our financial condition and results of operations for the year ended December 31, 2021 compared to the year
ended December 31, 2020 and for the year ended December 31, 2020 compared to the year ended December 31, 2019, can be
found in Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our
Annual Reports for the years ended December 31, 2021 and December 31, 2020, respectively.
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Business Segments
Engineered Materials
Net sales ..............................................................................................................
Net Sales Variance
Volume ..............................................................................................................
Price ..................................................................................................................
Currency ...........................................................................................................
Operating profit (loss) .........................................................................................
Operating margin .................................................................................................
Equity in net earnings (loss) of affiliates .............................................................
Depreciation and amortization ............................................................................
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Year Ended
December 31,
%
2022
2021
Change
Change
(In $ millions, except percentages)
4,024
2,718
1,306
48.1 %
33 %
23 %
(8) %
429
10.7 %
202
226
411
15.1 %
126
144
18
76
82
4.4 %
60.3 %
56.9 %
Net sales increased for the year ended December 31, 2022 compared to the same period in 2021 primarily due to:
•
•
higher volume, primarily in elastomers related to our acquisition of the M&M Business, our acquisition of Santoprene,
as well as the KEPCO restructuring. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying
consolidated financial statements for further information; and
higher pricing for most of our products, primarily due to higher raw material costs, higher energy costs and product
mix;
partially offset by:
•
an unfavorable currency impact resulting from a weaker euro relative to the U.S. dollar.
Operating profit increased for the year ended December 31, 2022 compared to the same period in 2021 primarily due to:
•
higher Net sales;
largely offset by:
•
•
•
higher raw material costs for all of our products and increased sourcing costs as a result of higher logistical costs and
global shipping constraints and our acquisition of the M&M Business;
higher spending of $258 million, primarily as a result of our acquisitions of the M&M Business and Santoprene, as
well as plant operating and administrative expenses; and
higher energy costs of $124 million, primarily for steam.
Equity in net earnings (loss) of affiliates increased for the for the year ended December 31, 2022 compared to the same period
in 2021 primarily due to:
•
an increase in equity investment in earnings of $90 million from our Ibn Sina strategic affiliate, primarily as a result of
tighter market conditions and stronger demand.
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Acetyl Chain
Net sales ..............................................................................................................
Net Sales Variance
Volume ..............................................................................................................
Price ..................................................................................................................
Currency ...........................................................................................................
Operating profit (loss) .........................................................................................
Operating margin .................................................................................................
Dividend income - equity investments ................................................................
Depreciation and amortization ............................................................................
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Year Ended
December 31,
%
2022
2021
Change
Change
(In $ millions, except percentages)
5,743
5,894
(151)
(2.6) %
(6) %
6 %
(3) %
1,447
1,875
(428)
(22.8) %
25.2 %
132
213
31.8 %
146
210
(14)
3
(9.6) %
1.4 %
Net sales decreased for the year ended December 31, 2022 compared to the same period in 2021 primarily due to:
•
•
lower volume for most of our products due to decreased demand, primarily in Asia; and
an unfavorable currency impact resulting from a weaker euro relative to the U.S. dollar;
partially offset by:
•
•
higher pricing for most of our products, primarily due to tighter market conditions as a result of increased customer
demand in the Western Hemisphere and supply constraints across most regions; and
higher volume for VAM due to increased demand.
Operating profit decreased for the year ended December 31, 2022 compared to the same period in 2021 primarily due to:
•
•
•
•
higher raw material and sourcing costs, primarily for methanol and carbon monoxide due to stronger demand and
tighter market conditions, as well as higher distribution costs due to global shipping constraints;
lower Net sales;
higher energy costs of $89 million, primarily due to price increases for natural gas and electricity; and
higher spending of $53 million, primarily as a result of increased plant operating and maintenance expenses.
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Other Activities
Operating profit (loss) .........................................................................................
Non-operating pension and other postretirement employee benefit (expense)
income ..............................................................................................................
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
Year Ended
December 31,
%
2022
2021
Change
Change
(In $ millions, except percentages)
(498)
(340)
(158)
(46.5) %
17
106
(89)
(84.0) %
Operating loss increased for the year ended December 31, 2022 compared to the same period in 2021 primarily due to:
•
higher functional and project spending of $187 million, primarily related to our acquisitions of the M&M Business and
Santoprene;
partially offset by:
•
lower incentive compensation cost.
Non-operating pension and other postretirement employee benefit income decreased for the year ended December 31, 2022
compared to the same period in 2021 primarily due to:
•
an increase in recognized actuarial loss of $40 million as a result of lower than expected actual asset returns, partially
offset by an increase in the weighted average discount rate used to determine benefit obligations from 2.5% to 4.9%,
and a decrease in expected asset returns of $39 million. See Note 12 - Benefit Obligations in the accompanying
consolidated financial statements for further information.
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 facility. As of
December 31, 2022, we have $1.45 billion available for borrowing under our senior unsecured revolving credit facility, if
required, in meeting our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents
of $1.5 billion as of December 31, 2022. We are actively managing our business to maintain cash flow, 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 November 1, 2022, we acquired a majority of the M&M Business for a purchase price of $11.0 billion, subject to
transaction adjustments, in an all-cash transaction. For further information regarding the acquisition and related financing
transactions, see Debt and Other Obligations in this Liquidity and Capital Resources and Note 4 - Acquisitions, Dispositions
and Plant Closures in the accompanying consolidated financial statements for further information.
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
twelve 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 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.
Capital expenditures were $543 million for the year ended December 31, 2022. We continue to prioritize those projects
expected to drive productivity in the near-term and expect capital expenditures to be approximately $600 million in 2023,
primarily due to certain investments in growth opportunities and productivity improvements. In Engineered Materials, our
expansion of (1) the compounding capacity and (2) the new liquid crystal polymer ("LCP") unit at our facilities in Nanjing,
China are, after experiencing some delays due to certain permitting issues, in detailed engineering design and our (3) energy
optimization productivity project at our polyoxymethylene ("POM") unit in Frankfurt, Germany is in front end engineering
design. In the Acetyl Chain, our planned expansion of (1) the capacity of our vinyl acetate ethylene ("VAE") emulsions units in
Nanjing, China, (2) the capacity of our vinyl acetate monomer ("VAM") plant in Bay City, Texas, (3) the sustainable
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production of methanol at our Fairway joint venture methanol unit in Clear Lake, Texas using captured carbon dioxide as
feedstock, (4) our acetic acid complex expansion in Clear Lake, Texas and (5) our VAE emulsion plant expansion in Frankfurt,
Germany, are in various stages of construction and on schedule. We continue to see the incremental capacity from investments
made in recent years strengthen our manufacturing network reliability to best serve our customers.
We did not repurchase any Common Stock during the year ended December 31, 2022.
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, 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 financial covenants under our senior unsecured revolving credit facility and expect to remain
in compliance based on our current expectation of future results of operations. If our actual future results of operations differ
materially from these expectations, or if we otherwise experience increased indebtedness or substantially lower EBITDA, we
may be required to seek an amendment or waiver of such covenants which may increase our borrowing costs under those debt
instruments.
Cash Flows
Cash and cash equivalents increased $972 million to $1.5 billion as of December 31, 2022 compared to December 31, 2021. As
of December 31, 2022, $1.3 billion of the $1.5 billion of cash and cash equivalents was held by our foreign subsidiaries. Under
the TCJA, we have incurred a prior year charge associated with the deemed repatriation of previously unremitted foreign
earnings, including foreign held cash. These funds are largely accessible without additional material tax consequences, if
needed in the U.S., to fund operations. See Note 15 - Income Taxes in the accompanying consolidated financial statements for
further information.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
•
Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities increased $62 million to $1.8 billion for the year ended December 31, 2022 compared
to $1.8 billion for the same period in 2021, primarily due to:
•
favorable changes in trade working capital of $291 million, primarily due to the timing of collections of trade
receivables, inventory builds and settlement of trade payables;
partially offset by:
•
a lower earnings performance.
•
Net Cash Provided by (Used in) Investing Activities
Net cash used in investing activities increased $10.0 billion to $11.1 billion for the year ended December 31, 2022 compared to
$1.1 billion for the same period in 2021, primarily due to:
•
a net cash outflow of $9.4 billion related to the M&M Acquisition in November 2022, partially offset by the
acquisition of the Santoprene™ thermoplastic vulcanizates elastomers business of Exxon Mobil Corporation in
2021,which did not recur in the current year. See Note 4 - Acquisitions, Dispositions and Plant Closures in the
accompanying consolidated financial statements for further information; and
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•
proceeds from the sale of marketable securities of $516 million, which did not recur in the current year.
•
Net Cash Provided by (Used in) Financing Activities
Net cash provided by financing activities increased $11.3 billion to $10.3 billion for the year ended December 31, 2022
compared to net cash used in financing activities of $1.0 billion for the same period in 2021, primarily due to:
•
•
•
an increase in net proceeds of long-term debt of $10.0 billion, primarily due to the issuance of senior unsecured notes
consisting of $2.0 billion in principal amount of 5.900% notes due July 5, 2024, $1.75 billion in principal amount of
6.050% notes due March 15, 2025, $2.0 billion in principal amount of 6.165% notes due July 15, 2027, $750 million
in principal amount of 6.330% notes due July 15, 2029 and $1.0 billion in principal amount of 6.379% notes due
July 15, 2032 (collectively, the "Acquisition USD Notes"), as well as senior unsecured notes consisting of €1.0 billion
in principal amount of 4.777% notes due July 19, 2026 and €500 million in principal amount of 5.337% notes due
January 19, 2029 (collectively, the "Acquisition Euro Notes" and, together with the Acquisition USD Notes, the
"Acquisition Notes"), partially offset by the maturity of the 5.875% senior unsecured notes ("5.875% Notes") which
were repaid during the year ended December 31, 2021;
a decrease in share repurchases of our Common Stock of $983 million during the year ended December 31, 2022; and
an increase in net borrowings on short-term debt of $336 million, primarily due to borrowing under the senior
unsecured revolving credit facility related to the M&M Acquisition in November 2022.
In addition, exchange rates had a favorable impact of $4 million on cash and cash equivalents and an unfavorable impact of
$15 million on cash and cash equivalents for the years ended December 31, 2022 and 2021, respectively.
Debt and Other Obligations
•
Senior Credit Facilities
In connection with the M&M Acquisition, on February 17, 2022, we entered into a bridge facility commitment letter with Bank
of America, N.A. ("Bank of America") pursuant to which Bank of America committed to provide, subject to the terms and
conditions set forth therein, a 364-day $11.0 billion senior unsecured bridge term loan facility (the "Bridge Facility").
Subsequently, commitments in respect of the Bridge Facility were syndicated to additional financial institutions as
contemplated thereby.
On March 18, 2022, we entered into a term loan credit agreement (the "March 2022 Term Loan Credit Agreement"), pursuant
to which lenders have provided a tranche of delayed-draw term loans due 364 days from issuance in an amount equal to
$500 million and a tranche of delayed-draw term loans due 5 years from issuance in an amount equal to $1.0 billion. On
September 16, 2022, Celanese, Celanese U.S. and certain subsidiaries entered into an additional term loan credit agreement (the
"September 2022 Term Loan Credit Agreement" and, together with the March 2022 Term Loan Credit Agreement, the "Term
Loan Credit Agreements"), pursuant to which lenders have provided delayed-draw term loans due 3 years from issuance in an
amount equal to $750 million (the term loans represented by the Term Loan Credit Agreements collectively, the "Term Loan
Facility"). The Term Loan Facility was fully drawn during the three months ended December 31, 2022. The Term Loan Facility
is guaranteed by Celanese and domestic subsidiaries representing substantially all of our U.S. assets and business operations.
On March 18, 2022, we entered into a new revolving credit agreement (the "New Revolving Credit Agreement" and, together
with the Term Loan Credit Agreements the "Credit Agreements") consisting of a $1.75 billion senior unsecured revolving credit
facility (with a letter of credit sublimit), maturing in 2027. The proceeds of a $365 million borrowing under the new senior
unsecured revolving credit facility were used to repay and terminate our existing revolving credit facility.
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•
Senior Notes
We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933 ("Securities
Act"), as amended, as follows (collectively, the "Senior Notes"):
Senior Notes
Issue Date
Principal
Interest Rate
Interest Pay Dates
Maturity Date
1.125% Notes
3.500% Notes
5.900% Notes
1.250% Notes
6.050% Notes
4.777% Notes
1.400% Notes
2.125% Notes
6.165% Notes
0.625% Notes
5.337% Notes
6.330% Notes
6.379% Notes
September 2016
May 2019
July 2022
December 2017
July 2022
July 2022
August 2021
November 2018
July 2022
September 2021
July 2022
July 2022
July 2022
(In millions)
€450
$500
$2,000
€300
$1,750
€1,000
$400
€500
$2,000
€500
€500
$750
$1,000
(In percentages)
1.125
3.500
5.900
1.250
6.050
4.777
1.400
2.125
6.165
0.625
5.337
6.330
6.379
September 26
May 8
January 5
November 8
July 5
February 11
March 15
September 15
July 19
February 5
August 5
March 1
January 15
July 15
September 10
January 19
January 15
January 15
July 15
July 15
September 26, 2023
May 8, 2024
July 5, 2024
February 11, 2025
March 15, 2025
July 19, 2026
August 5, 2026
March 1, 2027
July 15, 2027
September 10, 2028
January 19, 2029
July 15, 2029
July 15, 2032
The Senior Notes were issued by Celanese U.S. and are guaranteed on a senior unsecured basis by Celanese and the Subsidiary
Guarantors. Celanese U.S. may redeem some or all of each of the Senior Notes, prior to their respective maturity dates, at a
redemption price of 100% 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.
On July 14, 2022 and July 19, 2022, Celanese U.S. completed the offerings of the Acquisition USD Notes and Acquisition Euro
Notes, respectively. Fees and expenses of the offering of the Acquisition Notes, inclusive of underwriting discounts, were
$65 million. Net proceeds from the sale of the Acquisition Notes were used to fund the purchase price for the M&M
Acquisition, with any remaining proceeds being used for general corporate purposes.
The entry into the Term Loan Credit Agreements and the offerings of the Acquisition Notes reduced availability under the
Bridge Facility to zero, and we terminated the Bridge Facility. During the year ended December 31, 2022, we paid $66 million
in fees related to the Bridge Facility commitment, amortizing these fees to interest expense.
•
Accounts Receivable Securitization Facility
In 2021, 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 $1.1 billion and $1.1 billion of
accounts receivable under this agreement for the years ended December 31, 2022 and 2021, respectively, and collected
$1.1 billion and $1.1 billion of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts
receivable of $99 million were pledged by the SPE as collateral to the Purchasers as of December 31, 2022.
•
Factoring and Discounting Agreements
We have factoring agreements in Europe and Singapore with financial institutions. We de-recognized $320 million and
$230 million of accounts receivable under these factoring agreements for the years ended December 31, 2022 and 2021,
respectively, and collected $325 million and $185 million of accounts receivable sold under these factoring agreements during
the same periods.
In 2021, we entered into a letter of credit discounting agreement in Singapore with a financial institution. We de-recognized
$50 million and $70 million of accounts receivable under this agreement for the years ended December 31, 2022 and 2021,
respectively.
Our material financing arrangements contain customary covenants, including the maintenance of certain financial ratios, events
of default and change of control provisions. Failure to comply with these covenants, or the occurrence of any other event of
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default, could result in acceleration of the borrowings and other financial obligations. We are in compliance with all of the
covenants related to our debt agreements as of December 31, 2022. On February 21, 2023, we amended the Credit Agreements
for certain covenants included in the respective credit agreements.
See Note 11 - Debt in the accompanying 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 11 - Debt in the
accompanying 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 Annual 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 Credit Agreement (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 has no material assets other than the
stock of its immediate 100% owned subsidiary, the Issuer. 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 Credit
Agreement, 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 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, Credit Agreement, 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.
Net sales to third parties ..................................................................................................................................
Net sales to non-guarantor subsidiaries ..........................................................................................................
Total net sales ............................................................................................................................................
Gross profit .....................................................................................................................................................
Earnings (loss) from continuing operations ....................................................................................................
Net earnings (loss) ..........................................................................................................................................
Net earnings (loss) attributable to the Obligor Group ....................................................................................
Year Ended
December 31,
2022
(In $ millions)
2,022
1,160
3,182
609
327
321
321
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As of December 31,
2022
2021
(In $ millions)
Receivables from non-guarantor subsidiaries .....................................................................................
Other current assets .............................................................................................................................
Total current assets ........................................................................................................................
Goodwill .............................................................................................................................................
Other noncurrent assets .......................................................................................................................
Total noncurrent assets ..................................................................................................................
Current liabilities due to non-guarantor subsidiaries ..........................................................................
Current liabilities due to affiliates ......................................................................................................
Other current liabilities .......................................................................................................................
Total current liabilities ...................................................................................................................
Noncurrent liabilities due to non-guarantor subsidiaries ....................................................................
Other noncurrent liabilities .................................................................................................................
Total noncurrent liabilities .............................................................................................................
754
1,588
2,342
567
2,718
3,285
2,100
2
2,201
4,303
3,400
13,842
17,242
624
1,236
1,860
578
2,584
3,162
2,493
64
1,347
3,904
2,348
3,610
5,958
Share Capital
On February 8, 2023, we declared a quarterly cash dividend of $0.70 per share on our Common Stock amounting to
approximately $76 million. The cash dividend will be paid on March 7, 2023 to holders of record as of February 21, 2023.
Our Board of Directors has authorized the aggregate repurchase of $6.9 billion of our Common Stock since February 2008.
These authorizations give management discretion in determining the timing and conditions under which shares may be
repurchased. This repurchase program does not have an expiration date. During the year ended December 31, 2022, we did not
repurchase any shares of our Common Stock. As of December 31, 2022, we had $1.1 billion remaining under authorizations by
our Board of Directors.
See Note 14 - Shareholders' Equity in the accompanying consolidated financial statements for further information.
Contractual Obligations, Guarantees and Commitments
We calculated $2.7 billion of all future interest payments on debt and other obligations using the rate in effect on
December 31, 2022 and $476 million of all future pension and other postretirement funding obligations. We have directly
guaranteed various debt obligations under agreements with third parties related to certain equity affiliates. As of
December 31, 2022, we have directly guaranteed $142 million and €27 million of such obligations.
We have not entered into any material off-balance sheet arrangements.
In the accompanying consolidated financial statements, see Note 10 - Current Other Liabilities for current asset retirement
obligations, Note 11 - Debt for a description of the guarantees under our Senior Notes and Credit Agreement, Note 12 - Benefit
Obligations for a description of the pension and other postretirement funding obligations, Note 13 - Environmental for a
description of environmental obligations, Note 15 - Income Taxes for a description of uncertain tax positions, Note 16 - Leases
for lease obligations and Note 19 - Commitments and Contingencies for a discussion of commitments and contingencies related
to legal and regulatory proceedings.
Market Risks
See Item 7A. Quantitative and Qualitative Disclosure about Market Risk for further information.
Business Environment
We experienced significant cost inflation, inflationary pressure and supply disruptions related to the sourcing of raw materials,
energy, logistics and labor in 2022. We continue to closely monitor the impact of, and responses to, COVID-19 variants,
including government imposed lockdowns and permitted reopenings in various locations around the world, and the effects of
geopolitical events on demand conditions and the supply chain. Demand conditions across certain regions in the Western
Hemisphere and China deteriorated, creating uncertainty, impacting consumer activity and driving customer destocking.
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Table of Contents
Average prices of energy feedstocks, particularly natural gas, which are a significant input and source of energy for our
manufacturing operations, increased in the Western Hemisphere and particularly in Europe. We also experienced cost pressure
on raw material inputs. We continued pricing actions intended to offset these inflationary headwinds experienced during 2022.
Moderation of acetyls pricing trended to more normalized levels by the end of 2022. We expect sourcing costs and inflationary
pressures to improve in 2023.
We continue to monitor the situation in Ukraine. While the conflict has not had a material impact on our business, financial
condition or results of operations to date, we have experienced shortages in materials and increased costs for transportation,
energy and raw materials as well as other supply chain challenges, particularly in Europe, due in part to the effects of the
conflict, and government responses thereto, including sanctions, on the global economy. We continue to monitor these
developments.
Following Russia's invasion, we have suspended sales into Russia, Belarus and the sanctioned regions of Ukraine. Revenue
from these countries and regions constituted less than 1% of our consolidated Net sales for the years ended December 31, 2022
and 2021 and we have no manufacturing assets in these countries or regions.
Critical Accounting Policies and Estimates
Our consolidated financial statements are based on the selection and application of significant accounting policies. The
preparation of 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 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 believe the following accounting policies and estimates are critical to understanding the financial reporting risks present in
the current economic environment. These matters, and the judgments and uncertainties affecting them, are also essential to
understanding our reported and future operating results. See Note 2 - Summary of Accounting Policies in the accompanying
consolidated financial statements for further information.
•
Purchase Accounting
We recognize the identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values
as of the acquisition date. The excess of purchase price over the aggregate fair values is recorded as goodwill. Intangible assets
are valued using the relief from royalty, multi-period excess earnings and discounted cash flow methodologies, which are
considered Level 3 measurements. The relief from royalty method estimates our theoretical royalty savings from ownership of
the intangible asset. Key assumptions used in this method include discount rates, royalty rates, growth rates, sales projections
and terminal value rates. Key assumptions used in the multi-period excess earnings method include discount rates, retention
rates, growth rates, sales projections, expense projections and contributory asset charges. Key assumptions used in the
discounted cash flow valuation model include discount rates, growth rates, tax rates, cash flow projections and terminal value
rates. All of these methodologies require significant management judgment and, therefore, are susceptible to change. We
calculate the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed to allocate the purchase
price at the acquisition date. We may use the assistance of third-party valuation consultants. See Note 4 - Acquisitions,
Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.
•
Recoverability of Long-Lived Assets
Recoverability of Goodwill and Indefinite-Lived Assets
We assess the recoverability of the carrying amount of our goodwill and other indefinite-lived intangible assets annually during
the third quarter of our fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be fully recoverable.
When assessing the recoverability of goodwill and other indefinite-lived intangible assets, we may first assess qualitative
factors in determining whether it is more likely than not that the fair value of a reporting unit or other indefinite-lived intangible
asset is less than its carrying amount. The qualitative evaluation is an assessment of multiple factors, including the current
operating environment, financial performance and market considerations. We may elect to bypass the qualitative assessment for
some or all of our reporting units or other indefinite-lived intangible assets and proceed directly to a quantitative analysis
depending on the facts and circumstances.
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In performing a quantitative analysis of goodwill, recoverability of goodwill for each reporting unit is measured using a
discounted cash flow model incorporating discount rates commensurate with the risks involved. The key assumptions used in
the discounted cash flow valuation model include discount rates, growth rates, tax rates, cash flow projections and terminal
value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they
require significant management judgment.
Management tests other indefinite-lived intangible assets quantitatively utilizing the relief from royalty method under the
income approach to determine the estimated fair value for each indefinite-lived intangible asset. Key assumptions used in this
model include discount rates, royalty rates, growth rates, tax rates, sales projections and terminal value rates. Discount rates,
royalty rates, growth rates, growth rates and sales projections are the assumptions most sensitive and susceptible to change as
they require significant management judgment.
Specific assumptions discussed above are updated at the date of each test to consider current industry and company-specific risk
factors from the perspective of a market participant. The current business environment is subject to evolving market conditions
and requires significant management judgment to interpret the potential impact to our assumptions. To the extent that changes
in the current business environment result in adjusted management projections, impairment losses may occur in future periods.
See Note 9 - Goodwill and Intangible Assets, Net in the accompanying consolidated financial statements for further
information.
•
Benefit Obligations
Various assumptions are used in the calculation of the actuarial valuation of the employee benefit plans. These key assumptions
include the discount rate and expected long-term rates of return on plan assets. The actuarial assumptions used may differ
materially from actual results due to changing market and economic conditions. These differences may result in a significant
impact to the amount of net periodic benefit cost recorded in future periods.
Pension assumptions are reviewed annually in the fourth quarter of each fiscal year and whenever a plan is required to be
remeasured. Assumptions are reviewed on a plan and country-specific basis by third-party actuaries and senior management.
Such assumptions are adjusted as appropriate to reflect changes in market rates and outlook.
See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.
The estimated change in pension net periodic benefit cost and projected benefit obligations that would occur in 2023 from a
change in the indicated assumptions are as follows:
Change in
Rate
Impact on
Net Periodic
Benefit Cost
Impact on
Projected
Benefit
Obligations
(In $ millions)
U.S. Pension Benefits
Decrease in the discount rate .....................................................................................
Decrease in the long-term expected rate of return on plan assets(1)
...........................
Non-U.S. Pension Benefits
Decrease in the discount rate .....................................................................................
Decrease in the long-term expected rate of return on plan assets ..............................
0.5 %
0.5 %
0.5 %
0.5 %
(5)
10
(1)
3
85
N/A
53
N/A
______________________________
(1) Excludes nonqualified pension plans.
•
Income Taxes
We regularly review our deferred tax assets for recoverability and establish a valuation allowance as needed. In forming our
judgment regarding the recoverability of deferred tax assets related to deductible temporary differences and tax attribute
carryforwards, we give weight to positive and negative evidence based on the extent to which the forms of evidence can be
objectively verified.
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The recoverability of deferred tax assets and the recognition and measurement of uncertain tax positions are subject to various
assumptions and management judgment. If actual results differ from the estimates made by management in establishing or
maintaining valuation allowances against deferred tax assets, the resulting change in the valuation allowance would generally
impact earnings or Other comprehensive income depending on the nature of the respective deferred tax asset. In addition, the
positions taken with regard to tax contingencies may be subject to audit and review by tax authorities, which may result in
future taxes, interest and penalties.
See Note 15 - Income Taxes in the accompanying consolidated financial statements for further information.
Recent Accounting Pronouncements
See Note 3 - Recent Accounting Pronouncements in the accompanying consolidated financial statements for information
regarding recent accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risks
Our financial market risk consists principally of exposure to currency exchange rates, interest rates and commodity prices.
Exchange rate and interest rate risks are managed with a variety of techniques, including use of derivatives. We have in place
policies of hedging against changes in currency exchange rates, interest rates and commodity prices as described below.
See Note 2 - Summary of Accounting Policies in the accompanying consolidated financial statements for further information
regarding our derivative and hedging instruments accounting policies related to financial market risk.
See Note 17 - Derivative Financial Instruments in the accompanying consolidated financial statements for further information
regarding our market risk management and the related impact on our financial position and results of operations.
•
Foreign Currency Forwards and Swaps
A portion of our assets, liabilities, net sales and expenses are denominated in currencies other than the U.S. dollar. Fluctuations
in the value of these currencies against the U.S. dollar can have a direct and material impact on the business and financial
results. Our largest exposures are to the euro and Chinese yuan ("CNY"). A decline in the value of the euro and CNY versus the
U.S. dollar results in a decline in the U.S. dollar value of our sales and earnings denominated in euros and CNYs. Likewise, an
increase in the value of the euro and CNY versus the U.S. dollar would result in an opposite effect. We estimate that a 10%
change in the euro/U.S. dollar and CNY/U.S. dollar exchange rates would impact our earnings by $61 million and $41 million,
respectively.
Item 8. Financial Statements and Supplementary Data
The selected quarterly financial data is no longer required, as the Company has adopted the amendment to Item 302 of
Regulation S-K contained in SEC Release No. 33-10890, which became effective on February 10, 2021. There were no material
retrospective changes to any quarters in the two most recent fiscal years that would require this disclosure.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
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Item 9A. 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 Annual Report. Based on that
evaluation, as of December 31, 2022, 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 three months ended December 31, 2022, 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.
Report of Management on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the
Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our
financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of
America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly
reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our
consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in
accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or
disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or
detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide
absolute assurance that a misstatement of our consolidated financial statements would be prevented or detected.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Management has elected to exclude the internal control over financial reporting of the recently acquired
majority of the Mobility & Materials business ("M&M") of DuPont de Nemours, Inc. from its assessment of internal control
over financial reporting as of December 31, 2022, see Note 4 - Acquisitions, Dispositions and Plant Closures in the
accompanying consolidated financial statements for further information. The excluded financial statement amounts of M&M
constituted 15% of our consolidated Total assets and 4% of our consolidated Net sales as of and for the year ended
December 31, 2022. Based on this evaluation, management concluded that the Company's internal control over financial
reporting was effective as of December 31, 2022. The Company's independent registered public accounting firm, KPMG LLP,
has issued an audit report on the effectiveness of the Company's internal control over financial reporting. Their report follows
on page 60.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information required by this Item 10 is incorporated herein by reference from the subsections of "Governance," captioned
"Item 1: Election of Directors," "Director Nominees," "Board and Committee Governance," "Additional Governance Matters"
and the sections "Stock Ownership Information" and "Questions and Answers — Company Documents, Communications and
Shareholder Proposals" sections of the Company's definitive proxy statement for the 2023 annual meeting of shareholders to be
filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "2023 Proxy Statement"). With regard to the information required by this Item regarding compliance with Section
16(a) of the Exchange Act, we will provide disclosure of delinquent Section 16(a) reports, if any, in the 2023 Proxy Statement
under "Delinquent Section 16(a) Reports" and such disclosure, if any, is incorporated herein by reference. Information about
executive officers of the Company is contained in Part I of this Annual Report.
Codes of Ethics
The Company has adopted a Business Conduct Policy for directors, officers and employees along with a Financial Code of
Ethics for its principal executive officer, principal financial officer, principal accounting officer or controller, or persons
performing similar functions. These codes are available on the corporate governance portal of the Company's investor relations
website at investors.celanese.com. The Company intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K
regarding amendments to and waivers from these codes by posting such information on the same website.
Item 11. Executive Compensation
The information required by this Item 11 is incorporated herein by reference from the section "Governance – Director
Compensation" and the subsections of "Executive Compensation" captioned "Compensation Discussion and Analysis,"
"Compensation Risk Assessment," "Compensation and Management Development Committee Report," "Compensation
Tables," and "CEO Pay Ratio" of the 2023 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
The information with respect to beneficial ownership and equity compensation plans required by this Item 12 is incorporated
herein by reference from the subsections of "Stock Ownership Information" captioned "Principal Shareholders and Beneficial
Owners" and "Securities Authorized for Issuance Under Equity Compensation Plans" in the 2023 Proxy Statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item 13 is incorporated herein by reference from the "Governance — Director Independence
and Related Person Transactions" section of the 2023 Proxy Statement.
Item 14. Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP, Dallas, TX, Auditor Firm ID: 185.
The information required by this Item 14 is incorporated herein by reference from the "Audit Matters — Item 2: Ratification of
Independent Registered Public Accounting Firm" section of the 2023 Proxy Statement.
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Item 15. Exhibits and Financial Statement Schedules
PART IV
1. Financial Statements. The report of our independent registered public accounting firm and our consolidated financial
statements are listed below and begin on page 60 of this Annual Report.
Page Number
Report of Independent Registered Public Accounting Firm ................................................................................
Consolidated Statements of Operations ...............................................................................................................
Consolidated Statements of Comprehensive Income (Loss) ................................................................................
Consolidated Balance Sheets ...............................................................................................................................
Consolidated Statements of Equity ......................................................................................................................
Consolidated Statements of Cash Flows ..............................................................................................................
Notes to the Consolidated Financial Statements ..................................................................................................
60
63
64
65
66
67
68
2. Financial Statement Schedules.
The financial statement schedules required by this item, if any, are included as Exhibits to this Annual Report.
3. Exhibit List.
INDEX TO EXHIBITS(1)
Exhibits will be furnished upon request for a nominal fee, limited to reasonable expenses.
Exhibit
Number
2.1†
3.1
3.1(a)
3.1(b)
3.1(c)
3.2
4.1
4.2
4.3
4.4
Description
Transaction Agreement, dated as of February 17, 2022, by and among DuPont De Nemours, Inc., DuPont E&I
Holding, Inc. and Celanese Corporation (incorporated by reference to Exhibit 2.1 to the Current Report on
form 8-K filed with the SEC on February 18, 2022).
Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the
Quarterly Report on Form 10-Q filed with the SEC on October 18, 2016).
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese
Corporation dated as of April 21, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form
8-K filed with the SEC on April 22, 2016).
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese
Corporation dated as of September 17, 2018 (incorporated by reference to Exhibit 3.1 to the Current Report on
Form 8-K filed with the SEC on September 17, 2018).
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese
Corporation dated as of April 18, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form
8-K filed with the SEC on April 23, 2019).
Seventh Amended and Restated By-laws, effective as of November 2, 2022 (incorporated by reference to
Exhibit 3.1 to the Quarterly Report on Form 10-Q filed with the SEC on November 4, 2022).
Form of certificate of Common Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement
on Form 8-A/A filed with the SEC on September 18, 2018).
Indenture, dated May 6, 2011, by and between Celanese US Holdings LLC, Celanese Corporation and Wells
Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Current Report on
Form 8-K filed with the SEC on May 6, 2011).
Sixth Supplemental Indenture, dated as of September 26, 2016, among Celanese US Holdings LLC, Celanese
Corporation, the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as trustee, and
Deutsche Bank Trust Companies Americas, as paying agent, registrar and transfer agent (incorporated by
reference to Exhibit 4.2 to the Form 8-K filed with the SEC on September 26, 2016).
Seventh Supplemental Indenture, dated as of December 11, 2017, among Celanese US Holdings LLC,
Celanese Corporation, the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as
trustee, and Deutsche Bank Trust Companies Americas, as paying agent, registrar and transfer agent
(incorporated by reference to Exhibit 4.2 to the Form 8-K filed with the SEC on December 11, 2017).
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Exhibit
Number
Description
4.5
4.6
4.7
4.8
4.9
4.10
4.11*
10.1†
10.1(a)
10.2†
10.2(a)
10.3*†
Eighth Supplemental Indenture, dated as of November 5, 2018, among Celanese US Holdings LLC, Celanese
Corporation, the subsidiary guarantors party thereto, Wells Fargo Bank, National Association, as trustee, and
Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (incorporated by
reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on November 5, 2018).
Ninth Supplemental Indenture, dated as of May 8, 2019, among Celanese US Holdings LLC, Celanese
Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee
(incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on May 8,
2019).
Tenth Supplemental Indenture, dated as of August 5, 2021, among Celanese US Holdings LLC, Celanese
Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee
(incorporated by reference to Exhibit 4.2 to the Current Report on From 8-K filed with the SEC on August 5,
2021).
Eleventh Supplemental Indenture, dated as of September 10, 2021, among Celanese US Holdings LLC,
Celanese Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as
trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent
(incorporated by reference to Exhibit 4.2 to the Current Report on From 8-K filed with the SEC on September
10, 2021).
Twelfth Supplemental Indenture, dated as of July 14, 2022, among Celanese US Holdings LLC, Celanese
Corporation, the subsidiary guarantors party thereto, U.S. Bank Trust Company, National Association, as series
trustee and Computershare Trust Company, N.A. (as successor trustee to Wells Fargo Bank, National
Association), as base trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed
with the SEC on July 14, 2022).
Thirteenth Supplemental Indenture, dated as of July 19, 2022, among Celanese US Holdings LLC, Celanese
Corporation, the subsidiary guarantors party thereto, U.S. Bank Trust Company, National Association, as series
trustee, registrar and transfer agent, Computershare Trust Company, N.A. (as successor trustee to Wells Fargo
Bank, National Association), as base trustee, and Elavon Financial Services DAC, UK Branch, as paying agent
(incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on July 19,
2022).
Description of the Company's Securities Registered Under Section 12 of the Securities Exchange Act of 1934.
Credit Agreement, dated as of March 18, 2022, by and among Celanese Corporation, Celanese US Holdings
LLC, Celanese Europe B.V., certain subsidiaries of Celanese US Holdings LLC from time to time party thereto
as borrowers, each lender from time to time party thereto, Bank of America, N.A., as Administrative Agent, a
Swing Line Lender and an L/C Issuer and other Swing Line Lenders and L/C Issuers party thereto
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K Filed with the SEC on March 24,
2022).
First Amendment to Credit Agreement, dated as of February 21, 2023, by and among Celanese Corporation,
Celanese US Holdings LLC, Celanese Europe B.V., the subsidiary guarantors party thereto, each lender party
thereto, and Bank of America, N.A., as Administrative Agent, amending that certain Credit Agreement dated as
of March 18, 2022 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the
SEC on February 23, 2023).
Term Loan Credit Agreement, dated as of March 18, 2022, by and among Celanese Corporation, Celanese US
Holdings LLC, each lender from time to time party thereto, and Bank of America, N.A., as Administrative
Agent, a Swing Line Lender and an L/C Issuer and other Swing Line Lenders and L/C Issuers party thereto
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K Filed with the SEC on March 24,
2022).
First Amendment to Credit Agreement, dated as of February 21, 2023, by and among Celanese Corporation,
Celanese US Holdings LLC, the subsidiary guarantors party thereto, each lender party thereto, and Bank of
America, N.A., as Administrative Agent, amending that certain Term Loan Credit Agreement dated as of
March 18, 2022 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the
SEC on February 23, 2023).
3-Year Term Loan Credit Agreement, dated as of September 16, 2022, by and among Celanese Corporation,
Celanese US Holdings LLC, each lender from time to time a party thereto, and Bank of America, N.A., as
Administrative Agent.
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Exhibit
Number
10.3(a)
10.4‡
10.5(a)‡
10.5(b)‡
10.5(c)‡
10.5(d)‡
10.5(e)‡
10.6‡
10.7‡
10.8(a)‡
10.8(b)‡
10.8(c)‡
10.8(d)‡
10.8(e)‡
10.8(f)‡
10.8(g)‡
10.8(h)‡
10.8(i)‡
10.8(j)‡
10.9(a)‡
Description
First Amendment to Credit Agreement, dated as of February 21, 2023, by and among Celanese Corporation,
Celanese US Holdings LLC, the subsidiary guarantors party thereto, each lender party thereto, and Bank of
America, N.A., as Administrative Agent, amending that certain Term Loan Credit Agreement dated as of
September 16, 2022 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with
the SEC on February 23, 2023).
Celanese Corporation 2008 Deferred Compensation Plan (incorporated by reference to Exhibit 10.6 to the
Annual Report on Form 10-K filed on February 29, 2008).
Amendment Number One to Celanese Corporation 2008 Deferred Compensation Plan dated December 11,
2008 (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-8 filed with the SEC
on April 23, 2009).
Amendment Number Two to Celanese Corporation 2008 Deferred Compensation Plan dated December 22,
2008 (incorporated by reference to Exhibit 10.4(b) to the Annual Report on Form 10-K filed with the SEC on
February 7, 2014).
Amendment Number Three to the Celanese Corporation 2008 Deferred Compensation Plan dated October 31,
2019 (incorporated by reference to Exhibit 10.4(c) to the Annual Report on Form 10-K filed with the SEC on
February 6, 2020).
Amendment Number Four to the Celanese Corporation Deferred Compensation Plan dated February 5, 2020
(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on April
28, 2020).
Amendment Number Five to the Celanese Corporation Deferred Compensation Plan dated December 28, 2020
incorporated by reference to Exhibit 10.2(e) to the Annual Report on Form 10-K filed with the SEC on
February 11, 2021).
Celanese Corporation 2009 Employee Stock Purchase Program (incorporated by reference to Exhibit 4.5 to the
Registration Statement on Form S-8 filed on April 23, 2009).
Celanese Corporation 2018 Global Incentive Plan, effective as of April 23, 2018 (incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 20, 2018).
Form of 2020 Performance-Based Restricted Stock Unit Award Agreement (incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q filed with the SEC on April 28, 2020).
Form of 2020 Time-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4
to the Quarterly Report on Form 10-Q filed with the SEC on April 28, 2020).
Form of 2021 Executive Officer Performance-Based Restricted Stock Unit Award Agreement (incorporated by
reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on April 23, 2021).
Form of 2021 Time-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2
to the Quarterly Report on Form 10-Q filed with the SEC on April 23, 2021).
Form of 2021 Time-Based Restricted Stock Unit Award Agreement(for non-employee directors (incorporated
by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on July 23, 2021).
Form of 2022 Performance-Based Restricted Stock Unit Award Agreement (incorporated by reference to
Exhibit 10.4 to the Quarterly Report on Form 10-Q filed with the SEC on April 29, 2022).
Form of 2022 Performance-Based Restricted Stock Unit Award Agreement for Chief Executive Officer
(incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed with the SEC on April
29, 2022).
Form of 2022 Time-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.6
to the Quarterly Report on Form 10-Q filed with the SEC on April 29, 2022).
Form of 2022 Performance-Based Restricted Stock Unit Award Agreement for Chief Executive Officer
(incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q filed with the SEC on April
29, 2022).
Form of 2022 Time-Based Restricted Stock Unit Award Agreement (for non-employee directors) (incorporated
by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the SEC on July 29, 2022).
Executive Severance Benefits Plan, amended effective February 6, 2013 (incorporated by reference to Exhibit
10.2 to the Current Report on Form 8-K filed with the SEC on February 12, 2013).
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Exhibit
Number
10.9(b)‡
10.9(c)‡
10.10(a)‡
10.10(b)‡
10.11(a)‡
10.11(b)‡
Description
Executive Severance Benefits Plan, amended effective October 18, 2017 (incorporated by reference to Exhibit
10.9(b) the Annual Report on Form 10-K filed with the SEC on February 9, 2018).
Executive Severance Benefits Plan, amended effective February 5, 2020 (incorporated by reference to Exhibit
10.5 to the Quarterly Report on Form 10-Q filed with the SEC on April 28, 2020).
Offer Letter, dated December 12, 2018, between Celanese Corporation and A. Lynne Puckett (incorporated by
reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC on April 23, 2019).
Amended and Restated Offer Letter, dated February 5, 2020, between Celanese Corporation and Lori J.
Ryerkerk (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC
on April 28, 2020).
Form of Amended and Restated Change in Control Agreement between Celanese Corporation and Lori J.
Ryerkerk (incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q filed with the SEC
on April 28, 2020).
Form of Amended and Restated Change in Control Agreement between Celanese Corporation and participant,
together with a schedule identifying each of the executive officers with substantially identical agreements
(incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q filed with the SEC on April
28, 2020).
10.11(b).1*‡ Amended Schedule of Participants to Form of Non-CEO Amended and Restated Change in Control Agreement
(incorporated by reference to Exhibit 10.8(b).1 to the Annual Report on Form 10-K filed with the SEC on
February 10, 2022).
10.12‡
10.13‡
10.13(a)‡
10.14‡
10.14(a)‡
10.14(b)‡
Form of Long-Term Incentive Claw-Back Agreement between Celanese Corporation and award recipient
(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K/A filed with the SEC on January
26, 2009).
Celanese Americas Supplemental Retirement Savings Plan, as amended and restated effective January 1, 2014
(incorporated by reference to Exhibit 10.14(a) to the Annual Report on Form 10-K filed with the SEC on
February 6, 2015).
Amendment Number One to the Celanese Americas Supplemental Retirement Savings Plan, as amended and
restated effective January 1, 2014, dated December 28, 2020 (incorporated by reference to Exhibit 10.11(a) to
the Annual Report on Form 10-K filed with the SEC on February 11, 2021).
Celanese Americas Supplemental Retirement Pension Plan, as amended and restated effective January 1, 2009
(incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K filed with the SEC on
February 6, 2020).
First Amendment to the Celanese Americas Supplemental Retirement Pension Plan, as amended and restated
effective January 1, 2009, dated as of July 22, 2013 (incorporated by reference to Exhibit 10.15(a) to the
Annual Report on Form 10-K filed with the SEC on February 6, 2020).
Amendment Number Two to the Celanese Americas Supplemental Retirement Pension Plan, as amended and
restated effective January 1, 2009, dated as of February 5, 2020 (incorporated by reference to Exhibit 10.9 to
the Quarterly Report on Form 10-Q filed with the SEC on April 28, 2020).
10.15*‡
Summary of Non-Employee Director Compensation.
21.1*
22.1*
23.1*
24.1*
31.1*
31.2*
32.1*
32.2*
List of Subsidiaries of Celanese Corporation.
List of Guarantor Subsidiaries.
Consent of Independent Registered Public Accounting Firm of Celanese Corporation, KPMG LLP.
Power of Attorney (included on the signature page of this Annual Report on Form 10-K).
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because
its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
55
Table of Contents
Exhibit
Number
101.CAL*
101.DEF*
101.LAB*
101.PRE*
104
Description
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
Inline XBRL Taxonomy Extension Definition Linkbase Document.
Inline XBRL Taxonomy Extension Label Linkbase Document.
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2022 has
been formatted in Inline XBRL.
* Filed herewith.
‡ Indicates a management contract or compensatory plan or arrangement.
(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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Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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:
Name:
Title:
/s/ LORI J. RYERKERK
Lori J. Ryerkerk
Chair of the Board of Directors, Chief
Executive Officer and President
Date:
February 24, 2023
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints
Scott A. Richardson and Aaron M. McGilvray, and each of them, his or her true and lawful attorney-in-fact and agent, each
with full power of substitution and resubstitution to sign in his or her name, place and stead, in any and all capacities, to do any
and all things and execute any and all instruments that any such attorney-in-fact may deem necessary or advisable under the
Securities Exchange Act of 1934 and any rules, regulations and requirements of the U.S. Securities and Exchange Commission
in connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and any and all amendments
hereto, as fully for all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all that
such said attorney-in-fact, acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ LORI J. RYERKERK
Lori J. Ryerkerk
/s/ SCOTT A. RICHARDSON
Scott A. Richardson
/s/ AARON M. MCGILVRAY
Aaron M. McGilvray
/s/ JEAN S. BLACKWELL
Jean S. Blackwell
/s/ WILLIAM M. BROWN
William M. Brown
/s/ EDWARD G. GALANTE
Edward G. Galante
/s/ RAHUL GHAI
Rahul Ghai
/s/ KATHRYN M. HILL
Kathryn M. Hill
Chair of the Board of Directors,
Chief Executive Officer and President
(Principal Executive Officer)
Date
February 24, 2023
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
February 24, 2023
Vice President, Finance, Controller and
Chief Accounting Officer
(Principal Accounting Officer)
Director
Director
Director
Director
Director
57
February 24, 2023
February 24, 2023
February 24, 2023
February 24, 2023
February 24, 2023
February 24, 2023
Table of Contents
Signature
/s/ DAVID F. HOFFMEISTER
David F. Hoffmeister
/s/ JAY V. IHLENFELD
Jay V. Ihlenfeld
/s/ DEBORAH J. KISSIRE
Deborah J. Kissire
/s/ MICHAEL KOENIG
Michael Koenig
/s/ KIM K.W. RUCKER
Kim K.W. Rucker
Title
Director
Director
Director
Director
Director
Date
February 24, 2023
February 24, 2023
February 24, 2023
February 24, 2023
February 24, 2023
58
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CELANESE CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm ......................................................................................
Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020 ............................
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2022, 2021 and
2020 ........................................................................................................................................................................
Consolidated Balance Sheets as of December 31, 2022 and 2021 .............................................................................
Consolidated Statements of Equity for the years ended December 31, 2022, 2021 and 2020 ...................................
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 ...........................
Notes to the Consolidated Financial Statements ........................................................................................................
1. Description of the Company and Basis of Presentation .........................................................................................
2. Summary of Accounting Policies ...........................................................................................................................
3. Recent Accounting Pronouncements ......................................................................................................................
4. Acquisitions, Dispositions and Plant Closures .......................................................................................................
5. Receivables, Net .....................................................................................................................................................
6. Inventories ..............................................................................................................................................................
7. Investments in Affiliates .........................................................................................................................................
8. Property, Plant and Equipment, Net .......................................................................................................................
9. Goodwill and Intangible Assets, Net ......................................................................................................................
10. Current Other Liabilities .......................................................................................................................................
11. Debt ......................................................................................................................................................................
12. Benefit Obligations ...............................................................................................................................................
13. Environmental ......................................................................................................................................................
14. Shareholders' Equity .............................................................................................................................................
15. Income Taxes ........................................................................................................................................................
16. Leases ...................................................................................................................................................................
17. Derivative Financial Instruments..........................................................................................................................
18. Fair Value Measurements .....................................................................................................................................
19. Commitments and Contingencies .........................................................................................................................
20. Supplemental Cash Flow Information ..................................................................................................................
21. Segment Information ............................................................................................................................................
22. Revenue Recognition ............................................................................................................................................
23. Earnings (Loss) Per Share ....................................................................................................................................
24. Other (Charges) Gains, Net ..................................................................................................................................
25. Subsequent Events ................................................................................................................................................
Page
Number
60
63
64
65
66
67
68
68
68
77
77
80
80
80
82
83
85
86
90
97
100
101
106
107
110
111
113
113
116
117
118
118
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Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Celanese Corporation:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Celanese Corporation and subsidiaries (the Company) as of
December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), equity, and cash
flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the
consolidated financial statements). We also have audited the Company's internal control over financial reporting as of
December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2022 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
The Company acquired a majority of DuPont's Mobility and Materials ("M&M") business during 2022, and management
excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of
December 31, 2022, M&M's internal control over financial reporting associated with 15% of total assets and 4% of net sales
included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022. Our audit of
internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial
reporting of M&M.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company's consolidated financial statements and an opinion on the Company's internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
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preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the Company's application of multinational income tax regulations
As discussed in Note 15 to the consolidated financial statements, the Company recorded $489 million of income tax
benefit for the year ended December 31, 2022. Because of its multinational presence, the Company's effective income
tax rate and related income tax attributes are significantly impacted by tax regulations in certain operating locations.
As a result, the Company continuously monitors, evaluates, and responds to these impacts.
We identified the evaluation of the Company's ongoing assessment and application of multinational income tax
regulations as a critical audit matter. This was due to the complex, subjective and evolving nature of tax regulations,
the steps taken by the Company to interpret and respond to changes in the tax environment, and taxing authorities'
collective impacts on the Company's consolidated income tax computations. As a result, a high degree of auditor
judgment and the use of income tax professionals with specialized skills and knowledge were required to 1) evaluate
significant income tax regulations, including changes thereto, 2) assess the application of the taxing authorities'
regulations on the Company's business operations, and 3) evaluate the Company's accounting for income taxes
pertaining to significant transactions and restructurings.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included
controls related to 1) the application of tax regulations, 2) the execution of certain significant transactions and
restructurings, and 3) their collective impacts on consolidated income tax computations. We involved income tax
professionals with specialized skills and knowledge, who assisted in evaluating the Company's interpretation and
application of tax regulations, including tax regulation changes, and the associated income tax consequences. They
also assisted in assessing certain significant transactions and restructurings, including reviewing the underlying
documentation and evaluating the impact on the Company's global tax rate.
Fair value of customer-related intangible assets and trade name acquired in a business combination
As discussed in Note 4 to the consolidated financial statements, on November 1, 2022, the Company acquired a
majority of the Mobility and Materials ("M&M") business from DuPont de Nemours, Inc. ("DuPont") for a purchase
price of $11.0 billion, subject to transaction adjustments. The Company allocated the purchase price of the acquisition
to identifiable assets and liabilities assumed, of which $1.5 billion was preliminarily allocated to customer-related
intangible assets and $1.4 billion was preliminarily allocated to trade names.
We identified the evaluation of the preliminary fair values of one of the customer-related intangible assets and one of
the trade names acquired in the business combination as a critical audit matter. A high degree of subjective auditor
judgment and valuation specialized skills and knowledge were required in evaluating certain inputs into the
preliminary fair value determinations, including the royalty rate and discount rate. Changes in these inputs could have
a significant impact on the estimated fair values of the intangible assets.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design
and tested the operating effectiveness of certain internal controls related to the Company's purchase accounting
process, including controls related to the development of the above-listed inputs into the valuation of the customer-
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related intangible asset and the trade name. In addition, we involved valuation professionals with specialized skills and
knowledge who assisted in: (1) evaluating the discount rate by comparing it to an independently developed range of
discount rates based on publicly available market data for comparable entities; (2) developing an estimate of fair value
of the customer-related intangible asset using projected cash flows of the M&M business and an independently
developed range of discount rates, and comparing it to the Company's fair value estimate; (3) evaluating the royalty
rate for the trade name by comparing it to royalty rates from comparable licensing agreements; and (4) developing an
estimate of fair value of the trade name using the royalty rate and projected cash flows of the M&M business, and an
independently developed range of discount rates, and comparing it to the Company's fair value estimate.
/s/ KPMG LLP
We have served as the Company's auditor since 2004.
Dallas, Texas
February 24, 2023
62
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CELANESE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales .........................................................................................................
Cost of sales ...................................................................................................
Gross profit ..................................................................................................
Selling, general and administrative expenses ................................................
Amortization of intangible assets ...................................................................
Research and development expenses .............................................................
Other (charges) gains, net ..............................................................................
Foreign exchange gain (loss), net ..................................................................
Gain (loss) on disposition of businesses and assets, net ................................
Operating profit (loss) .................................................................................
Equity in net earnings (loss) of affiliates .......................................................
Non-operating pension and other postretirement employee benefit
(expense) income ........................................................................................
Interest expense ..............................................................................................
Refinancing expense ......................................................................................
Interest income ...............................................................................................
Dividend income - equity investments ..........................................................
Gain (loss) on sale of investments in affiliates ..............................................
Other income (expense), net ..........................................................................
Earnings (loss) from continuing operations before tax ...............................
Income tax (provision) benefit .......................................................................
Earnings (loss) from continuing operations ................................................
Earnings (loss) from operation of discontinued operations ...........................
Income tax (provision) benefit from discontinued operations .......................
Earnings (loss) from discontinued operations .............................................
Net earnings (loss) ..................................................................................
Net (earnings) loss attributable to noncontrolling interests ...........................
Net earnings (loss) available to Celanese Corporation ...........................
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations ................................................
Earnings (loss) from discontinued operations .............................................
Net earnings (loss) ..................................................................................
Earnings (loss) per common share - basic
Continuing operations .................................................................................
Discontinued operations ..............................................................................
Net earnings (loss) - basic .......................................................................
Earnings (loss) per common share - diluted
Continuing operations .................................................................................
Discontinued operations ..............................................................................
Net earnings (loss) - diluted ....................................................................
Weighted average shares - basic ....................................................................
Weighted average shares - diluted .................................................................
Year Ended December 31,
2020
2021
2022
(In $ millions, except share and per share data)
9,673
(7,293)
2,380
(824)
(62)
(112)
(8)
(1)
5
1,378
220
17
(405)
—
69
133
—
9
1,421
489
1,910
(9)
1
(8)
1,902
(8)
1,894
1,902
(8)
1,894
17.55
(0.07)
17.48
8,537
(5,855)
2,682
(633)
(25)
(86)
3
2
3
1,946
146
106
(91)
(9)
8
147
—
(5)
2,248
(330)
1,918
(27)
5
(22)
1,896
(6)
1,890
1,912
(22)
1,890
17.19
(0.20)
16.99
5,655
(4,362)
1,293
(482)
(22)
(74)
(39)
(5)
(7)
664
134
17
(109)
—
6
126
1,408
5
2,251
(247)
2,004
(14)
2
(12)
1,992
(7)
1,985
1,997
(12)
1,985
16.95
(0.10)
16.85
17.41
(0.07)
17.34
108,380,082
109,235,376
17.06
(0.20)
16.86
111,224,017
112,084,412
16.85
(0.10)
16.75
117,817,445
118,481,376
See the accompanying notes to the consolidated financial statements.
63
Table of Contents
CELANESE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net earnings (loss) .........................................................................................
Other comprehensive income (loss), net of tax
Foreign currency translation gain (loss) ......................................................
Gain (loss) on cash flow hedges ..................................................................
Pension and postretirement benefits ............................................................
Total other comprehensive income (loss), net of tax ..............................
Total comprehensive income (loss), net of tax ....................................
Comprehensive (income) loss attributable to noncontrolling interests
Comprehensive income (loss) attributable to Celanese Corporation .
Year Ended December 31,
2022
2021
(In $ millions)
2020
1,902
1,896
1,992
(217)
21
7
(189)
1,713
(8)
1,705
(11)
13
(3)
(1)
1,895
(6)
1,889
(8)
(18)
(2)
(28)
1,964
(7)
1,957
See the accompanying notes to the consolidated financial statements.
64
Table of Contents
CELANESE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Current Assets
ASSETS
Cash and cash equivalents .......................................................................................................
Trade receivables - third party and affiliates ...........................................................................
Non-trade receivables, net .......................................................................................................
Inventories ...............................................................................................................................
Other assets ..............................................................................................................................
Total current assets .............................................................................................................
Investments in affiliates .............................................................................................................
Property, plant and equipment (net of accumulated depreciation - 2022: $3,687; 2021:
$3,484) ....................................................................................................................................
Operating lease right-of-use assets .............................................................................................
Deferred income taxes ................................................................................................................
Other assets ................................................................................................................................
Goodwill .....................................................................................................................................
Intangible assets, net ..................................................................................................................
Total assets .......................................................................................................................
LIABILITIES AND EQUITY
Current 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
Shareholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized (2022 and 2021: 0 issued
and outstanding) ...................................................................................................................
Common stock, $0.0001 par value, 400,000,000 shares authorized (2022: 170,135,425
issued and 108,473,932 outstanding; 2021: 169,760,024 issued and 108,023,735
outstanding) .........................................................................................................................
Treasury stock, at cost (2022: 61,661,493 shares; 2021: 61,736,289 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 consolidated financial statements.
As of December 31,
2022
2021
(In $ millions, except share data)
1,508
1,379
675
2,808
241
6,611
1,062
5,584
413
808
547
7,142
4,105
26,272
1,306
1,518
1,201
43
4,068
13,373
1,242
322
411
364
387
536
1,161
506
1,524
80
3,807
823
4,193
236
248
521
1,412
735
11,975
791
1,160
473
81
2,505
3,176
555
280
558
200
164
—
—
—
(5,491)
372
11,274
(518)
5,637
468
6,105
26,272
—
(5,492)
333
9,677
(329)
4,189
348
4,537
11,975
65
Table of Contents
CELANESE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
Year Ended December 31,
2022
2021
2020
Shares
Amount
Shares
Amount
Shares
Amount
(In $ millions, except share data)
Common Stock
Balance as of the beginning of the period .................
Purchases of treasury stock .......................................
Stock awards .............................................................
Balance as of the end of the period.......................
108,023,735 —
—
—
—
450,197
108,473,932 —
114,168,464 —
(6,556,378) —
—
108,023,735 —
411,649
119,555,207 —
(5,889,073) —
—
114,168,464 —
502,330
Treasury Stock
Balance as of the beginning of the period .................
Purchases of treasury stock, including related fees ...
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 ..................................................................
(Distributions to) contributions from noncontrolling
interests ..................................................................
Acquisition of noncontrolling interest ......................
Balance as of the end of the period.......................
Total equity .......................................................
61,736,289
—
(74,796)
(5,492) 55,234,515
—
6,556,378
1
(54,604)
(4,494) 49,417,965
(1,000) 5,889,073
2
(72,523)
61,661,493
(5,491) 61,736,289
(5,492) 55,234,515
(3,846)
(650)
2
(4,494)
333
39
372
9,677
1,894
(297)
11,274
(329)
(189)
(518)
257
76
333
8,091
1,890
(304)
9,677
(328)
(1)
(329)
254
3
257
6,399
1,985
(293)
8,091
(300)
(28)
(328)
5,637
4,189
3,526
348
8
(13)
125
468
6,105
369
6
(27)
—
348
4,537
391
7
(29)
—
369
3,895
See the accompanying notes to the consolidated financial statements.
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Table of Contents
CELANESE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating Activities
Net earnings (loss) ......................................................................................................................
1,902
1,896
1,992
Year Ended December 31,
2022
2021
(In $ millions)
2020
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 .............................................................................
Actuarial (gain) loss on pension and postretirement plans ...................................................
Pension curtailments and settlements, net .............................................................................
Deferred income taxes, net ....................................................................................................
(Gain) loss on disposition of businesses and assets, net .......................................................
Stock-based compensation ....................................................................................................
Undistributed earnings in unconsolidated affiliates ..............................................................
(Gain) loss on sale of investments in 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 ........................................................................
Proceeds from sale of investments in affiliates ..........................................................................
Proceeds from sale of marketable securities ...............................................................................
Purchases of marketable securities .............................................................................................
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 .......................................................................................
14
478
(85)
(48)
81
—
(835)
(8)
60
(3)
—
11
(28)
218
(253)
(13)
(84)
412
1,819
(543)
(10,589)
48
—
—
—
(57)
(11,141)
36
500
—
Proceeds from long-term debt .....................................................................................................
10,769
Repayments of long-term debt ....................................................................................................
Purchases of treasury stock, including related fees ....................................................................
Common stock dividends ...........................................................................................................
(Distributions to) contributions from noncontrolling interests ...................................................
Settlement of forward-starting interest rate swaps .....................................................................
Issuance cost of bridge facility ...................................................................................................
Other, net ....................................................................................................................................
Net cash provided by (used in) financing activities ...........................................................
Exchange rate effects on cash and cash equivalents ......................................................................
Net increase (decrease) in cash and cash equivalents .................................................................
Cash and cash equivalents as of beginning of period .................................................................
Cash and cash equivalents as of end of period ..................................................................
(526)
(17)
(297)
(13)
—
(63)
(99)
10,290
4
972
536
1,508
See the accompanying notes to the consolidated financial statements.
67
2
378
(136)
(51)
41
3
13
(5)
95
(34)
—
28
15
(396)
(367)
(80)
353
2
1,757
(467)
(1,142)
27
—
516
—
(53)
(1,119)
206
—
(6)
990
(786)
(1,000)
(304)
(27)
(72)
—
(43)
(1,042)
(15)
(419)
955
536
31
356
(99)
(48)
96
(1)
77
3
28
13
(1,408)
18
5
141
124
60
(6)
(39)
1,343
(364)
(100)
21
1,575
43
(544)
(39)
592
(287)
311
(466)
—
(30)
(650)
(293)
(29)
—
—
(27)
(1,471)
28
492
463
955
Table of Contents
CELANESE CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Company and Basis of Presentation
Description of the Company
Celanese Corporation and its subsidiaries (collectively, the "Company") is a global chemical and specialty materials company.
The Company produces high performance engineered polymers that are used in a variety of high-value applications, as well as
acetyl products, which are intermediate chemicals for nearly all major industries. The Company also engineers and
manufactures a wide variety of products essential to everyday living. The Company's broad product portfolio serves a diverse
set of end-use applications including automotive, chemical additives, construction, consumer and industrial adhesives,
consumer and medical, energy storage, filtration, food and beverage, paints and coatings, paper and packaging, performance
industrial and textiles.
Definitions
In this Annual Report on Form 10-K ("Annual Report"), the term "Celanese" refers to Celanese Corporation, a Delaware
corporation, and not its subsidiaries. The term "Celanese U.S." refers to the Company's subsidiary, Celanese US Holdings LLC,
a Delaware limited liability company, and not its subsidiaries.
Basis of Presentation
The consolidated financial statements contained in this Annual Report were prepared in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") for all periods presented and include the accounts of the
Company, its majority owned subsidiaries over which the Company exercises control and, when applicable, variable interest
entities in which the Company is the primary beneficiary. The consolidated financial statements and other financial information
included in this Annual Report, unless otherwise specified, have been presented to separately show the effects of discontinued
operations.
In the ordinary course of business, the Company enters into contracts and agreements relative to a number of topics, including
acquisitions, dispositions, joint ventures, supply agreements, product sales and other arrangements. The Company endeavors to
describe those contracts or agreements that are material to its business, results of operations or financial position. The Company
may also describe some arrangements that are not material but in which the Company believes investors may have an interest or
which may have been included in a Form 8-K filing. Investors should not assume the Company has described all contracts and
agreements relative to the Company's business in this Annual Report.
For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside
shareholders' interests are shown as noncontrolling interests.
2. Summary of Accounting Policies
Critical Accounting Policies
Purchase Accounting
The Company recognizes the identifiable tangible and intangible assets acquired and liabilities assumed based on their
estimated fair values as of the acquisition date. The excess of purchase price over the aggregate fair values is recorded as
goodwill. Intangible assets are valued using the relief from royalty, multi-period excess earnings and discounted cash flow
methodologies, which are considered Level 3 measurements. The relief from royalty method estimates the Company's
theoretical royalty savings from ownership of the intangible asset. Key assumptions used in this method include discount rates,
royalty rates, growth rates, sales projections and terminal value rates. Key assumptions used in the multi-period excess earnings
method include discount rates, retention rates, growth rates, sales projections, expense projections and contributory asset
charges. Key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, tax rates, cash
flow projections and terminal value rates. All of these methodologies require significant management judgment and, therefore,
are susceptible to change. The Company calculates the fair value of the identifiable tangible and intangible assets acquired and
liabilities assumed to allocate the purchase price at the acquisition date. The Company may use the assistance of third-party
valuation consultants.
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Table of Contents
Recoverability of Goodwill and Indefinite-Lived Assets
The Company assesses the recoverability of the carrying amount of its reporting unit goodwill and other 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 asset may not be fully recoverable.
Recoverability of the carrying amount of goodwill is measured at the reporting unit level. The Company assesses the
recoverability of finite-lived intangible assets in the same manner as for property, plant and equipment. Impairment losses are
generally recorded in Other (charges) gains, net in the consolidated statements of operations.
When assessing the recoverability of goodwill and other indefinite-lived intangible assets, the Company may first assess
qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit, including goodwill, or
an other indefinite-lived intangible asset is less than its carrying amount. The qualitative evaluation is an assessment of multiple
factors, including the current operating environment, financial performance and market considerations. The Company may elect
to bypass this qualitative assessment for some or all of its reporting units or other indefinite-lived intangible assets and perform
a quantitative test, based on management's judgment.
In performing a quantitative analysis of goodwill, the Company measures the recoverability of goodwill for each reporting unit
using a discounted cash flow model incorporating discount rates commensurate with the risks involved, which is classified as a
Level 3 fair value measurement. The key assumptions used in the discounted cash flow valuation model include discount rates,
growth rates, tax rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections
are the most sensitive and susceptible to change as they require significant management judgment. Discount rates used are
similar to the rates estimated by the weighted average cost of capital ("WACC") considering any differences in company-
specific risk factors. The Company may engage third-party valuation consultants to assist with this process.
Management tests other indefinite-lived intangible assets for impairment quantitatively utilizing the relief from royalty method
under the income approach to determine the estimated fair value for each indefinite-lived intangible asset, which is classified as
a Level 3 fair value measurement. The relief from royalty method estimates the Company's theoretical royalty savings from
ownership of the intangible asset. The key assumptions used in this model include discount rates, royalty rates, growth rates, tax
rates, sales projections and terminal value rates. Discount rates, royalty rates, growth rates and sales projections are the
assumptions most sensitive and susceptible to change as they require significant management judgment. Discount rates used are
similar to the rates estimated by the WACC considering any differences in company-specific risk factors. Royalty rates are
established by management and are periodically substantiated by third-party valuation consultants.
Pension and Other Postretirement Obligations
The Company recognizes a balance sheet asset or liability for each of its pension and other postretirement benefit plans equal to
the plan's funded status as of a December 31 measurement date. The amounts recognized in the consolidated financial
statements related to pension and other postretirement benefits are determined on an actuarial basis. Various assumptions are
used in the calculation of the actuarial valuation of the employee benefit plans. These assumptions include the discount rate,
compensation levels, expected long-term rates of return on plan assets and trends in health care costs. In addition, actuarial
consultants use factors such as withdrawal and mortality rates to estimate the projected benefit obligation.
The Company applies the long-term expected rate of return to the fair value of plan assets and immediately recognizes in
operating results the change in fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each
fiscal year and whenever a plan is required to be remeasured. Events requiring a plan remeasurement will be recognized in the
quarter in which such remeasurement event occurs. The remaining components of pension and other postretirement plan net
periodic benefit costs are recorded on a quarterly basis.
The Company allocates the service cost and amortization of prior service cost (or credit) components of its pension and
postretirement plans to its business segments. Interest cost, expected return on assets and net actuarial gains and losses are
considered financing activities managed at the corporate level and are recorded to Other Activities. The Company believes the
expense allocation appropriately matches the cost incurred for active employees to the respective business segment.
Other postretirement benefit plans provide medical and life insurance benefits to retirees who meet minimum age and service
requirements. The key determinants of the accumulated postretirement benefit obligation are the discount rate and the health
care cost trend rate.
69
Table of Contents
•
Discount Rate
As of the measurement date, the Company determines the appropriate discount rate used to calculate the present value of future
cash flows currently expected to be required to settle the pension and other postretirement benefit obligations. The discount rate
is generally based on the yield on high-quality corporate fixed-income securities.
In the U.S., the rate used to discount pension and other postretirement benefit plan liabilities is based on a yield curve
developed from market data of over 300 Aa-grade non-callable bonds at the measurement date. This yield curve has discount
rates that vary based on the duration of the obligations. The estimated future cash flows for the pension and other benefit
obligations were matched to the corresponding rates on the yield curve to derive a weighted average discount rate.
Outside of the U.S., a similar approach of discounting pension and other postretirement benefit plan liabilities is used based on
the high quality corporate bonds available in each market. There are some exceptions to this methodology, namely in locations
where there is a sparse corporate bond market, and in such cases the discount rate takes into account yields of government
bonds at the appropriate duration.
•
Expected Long-Term Rate of Return on Assets
The Company determines the long-term expected rate of return on plan assets by considering the current target asset allocation,
as well as the historical and expected rates of return on various asset categories in which the plans are invested. A single long-
term expected rate of return on plan assets is then calculated for each plan as the weighted average of the target asset allocation
and the long-term expected rate of return assumptions for each asset category within each plan. The expected rate of return is
assessed annually.
•
Investment Policies and Strategies
The investment objectives for the Company's pension plans are to earn, over a moving 20-year period, a long-term expected
rate of return, net of investment fees and transaction costs, sufficient to satisfy the benefit obligations of the plan, while at the
same time maintaining adequate liquidity to pay benefit obligations and proper expenses, and meet any other cash needs, in the
short- to medium-term.
The equity and debt securities objectives are to provide diversified exposure across the U.S. and global equity and fixed income
markets, and to manage the risks and returns of the plans through the use of multiple managers and strategies. The fixed income
strategies are designed to reduce liability-related interest rate risk by investing in bonds that match the duration and credit
quality of the plan liabilities.
The financial objectives of the qualified pension plans are established in conjunction with a comprehensive review of each
plan's liability structure. The Company's asset allocation policy is based on detailed asset/liability analysis. In developing
investment policy and financial goals, consideration is given to each plan's demographics, the returns and risks associated with
current and alternative investment strategies and the current and projected cash, expense and funding ratios of each plan.
Investment policies must also comply with local statutory requirements as determined by each country. A formal asset/liability
study of each plan is undertaken approximately every three to five years or whenever there has been a material change in plan
demographics, benefit structure or funding status and investment market. The Company has adopted a long-term investment
horizon such that the risk and duration of investment losses are weighed against the long-term potential for appreciation of
assets. Although there cannot be complete assurance that these objectives will be realized, it is believed that the likelihood for
their realization is reasonably high, based upon the asset allocation chosen and the historical and expected performance of the
asset classes utilized by the plans. The intent is for investments to be broadly diversified across asset classes, investment styles,
market sectors, investment managers, developed and emerging markets and securities in order to moderate portfolio volatility
and risk. Investments may be in separate accounts, commingled trusts, mutual funds and other pooled asset portfolios provided
they all conform to fiduciary standards.
External investment managers are hired to manage pension assets. Investment consultants assist with the screening process for
each new manager hired. Over the long-term, the investment portfolio is expected to earn returns that exceed a composite of
market indices that are weighted to match each plan's target asset allocation. The portfolio return should also (over the long-
term) meet or exceed the return used for actuarial calculations in order to meet the future needs of each plan.
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Table of Contents
Income Taxes
The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this
approach, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax purposes and net operating loss and tax credit
carryforwards. The amount of deferred taxes on these temporary differences is determined using the tax rates that are expected
to apply to the period when the asset is realized or the liability is settled, as applicable, based on tax rates and laws in the
respective tax jurisdiction enacted as of the balance sheet date.
The Company reviews its deferred tax assets for recoverability and establishes a valuation allowance based on historical taxable
income, projected future taxable income, remaining carryforward periods, applicable tax strategies and the expected timing of
the reversals of existing temporary differences. A valuation allowance is provided when it is more likely than not (likelihood of
greater than 50%) that some portion or all of the deferred tax assets will not be realized.
The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require
periodic adjustments and which may not accurately anticipate actual outcomes. Tax positions are recognized only when it is
more likely than not (likelihood of greater than 50%), based on technical merits, that the positions will be sustained upon
examination. Tax positions that meet the more-likely-than-not threshold are measured using a probability weighted approach as
the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Whether the more-likely-
than-not recognition threshold is met for a tax position is a matter of judgment based on the individual facts and circumstances
of that position evaluated in light of all available evidence and technical authorities in the relevant jurisdiction.
The Company recognizes interest and penalties related to uncertain tax positions in Income tax (provision) benefit in the
consolidated statements of operations.
Other Accounting Policies
Consolidation Principles
The consolidated financial statements have been prepared in accordance with U.S. GAAP for all periods presented and include
the accounts of the Company and its majority owned subsidiaries over which the Company exercises control. All intercompany
accounts and transactions have been eliminated in consolidation.
Estimates and Assumptions
The preparation of 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 consolidated financial statements and the reported amounts of net sales, expenses and allocated charges during the
reporting period. Significant estimates pertain to impairments of goodwill, intangible assets and other long-lived assets,
purchase price allocations, restructuring costs and other (charges) gains, net, income taxes, pension and other postretirement
benefits, asset retirement obligations, environmental liabilities and loss contingencies, among others. Actual results could differ
from those estimates.
Variable Interest Entities
The Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so,
whether or not those entities are variable interest entities ("VIEs"). A VIE is an entity with insufficient equity at risk for the
entity to finance its activities without additional subordinated financial support or in which equity investors lack the
characteristics of a controlling financial interest. If an entity is determined to be a VIE, the Company evaluates whether the
Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics.
The Company concludes that it is the primary beneficiary and consolidates the VIE if the Company has both (i) the power to
direct the activities of the VIE that most significantly influence the VIE's economic performance, and (ii) the obligation to
absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.
The Company has a joint venture, Fairway Methanol LLC ("Fairway"), with Mitsui & Co., Ltd., of Tokyo, Japan ("Mitsui"), in
which the Company owns 50% of Fairway, for the production of methanol at the Company's integrated chemical plant in Clear
Lake, Texas. Fairway is a VIE in which the Company is the primary beneficiary. Accordingly, the Company consolidates the
venture and records a noncontrolling interest for the share of the venture owned by Mitsui. Fairway is included in the
Company's Acetyl Chain segment. As of December 31, 2022 and 2021, the carrying amount of the total assets associated with
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Fairway included in the consolidated balance sheets were $627 million and $628 million, respectively, made up primarily of
$544 million and $560 million, respectively, of property, plant and equipment.
The Company holds variable interests in entities that supply certain raw materials and services to the Company. The variable
interests primarily relate to cost-plus contractual arrangements with the suppliers and recovery of capital expenditures for
certain plant assets plus a rate of return on such assets. Liabilities for such supplier recoveries of capital expenditures have been
recorded as finance lease obligations. The entities are not consolidated because the Company is not the primary beneficiary of
the entities as it does not have the power to direct the activities of the entities that most significantly impact the entities'
economic performance. The Company's maximum exposure to loss as a result of its involvement with these VIEs as of
December 31, 2022 and 2021 were $223 million and $235 million, respectively, related primarily to the recovery of capital
expenditures for certain property, plant and equipment.
Fair Value Measurements
The Company determines fair value based on the price that would be received from selling an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. When determining the fair value measurements
for assets and liabilities required to be recorded at fair value, the Company considers assumptions that market participants
would use when pricing the asset or liability. Market participant assumptions are categorized by a three-tiered fair value
hierarchy which prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs
(Level 3 measurement). This hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be
categorized based upon the lowest level of input that is significant to the fair value calculation. Valuations for fund investments,
such as common/collective trusts, registered investment companies and short-term investment funds, which do not have readily
determinable fair values, are typically estimated using a net asset value provided by a third party as a practical expedient.
The levels of inputs used to measure fair value are as follows:
Level 1 - unadjusted quoted prices for identical assets or liabilities in active markets accessible by the Company
Level 2 - inputs that are observable in the marketplace other than those inputs classified as Level 1
Level 3 - inputs that are unobservable in the marketplace and significant to the valuation
Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less are considered cash equivalents.
Inventories
Inventories, including stores and supplies, are stated at the lower of cost and net realizable value. Cost for inventories is
determined using the first-in, first-out method. Cost includes raw materials, direct labor and manufacturing overhead. Cost for
stores and supplies is primarily determined by the average cost method.
Investments in Affiliates
Investments in equity securities where the Company can exercise significant influence over operating and financial policies of
an investee, which is generally considered when an investor owns 20% or more of the voting stock of an investee, are
accounted for under the equity method of accounting. Investments in equity securities where the Company does not exercise
significant influence are accounted for at fair value or, if such investments do not have a readily determinable fair value, an
election may be made to measure them at cost after considering observable price changes for similar instruments, minus
impairment, if any. The Company determined it cannot exercise significant influence over certain investments where the
Company owns greater than a 20% interest due to local government investment in and influence over these entities, limitations
on the Company's involvement in the day-to-day operations and the present inability of the entities to provide timely financial
information prepared in accordance with U.S. GAAP. Further, these investments were determined not to have a readily
determinable fair value. Accordingly, these investments are accounted for using the alternative measure described above.
In certain instances, the financial information of the Company's equity investees is not available on a timely basis. Accordingly,
the Company records its proportional share of the investee's earnings or losses on a consistent lag of no more than one quarter.
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When required to assess the recoverability of its investments in affiliates, the Company estimates fair value using a discounted
cash flow model. The Company may engage third-party valuation consultants to assist with this process.
Property, Plant and Equipment, Net
Land is recorded at historical cost. Buildings, machinery and equipment, including capitalized interest, and property under
finance lease agreements, are recorded at cost less accumulated depreciation. The Company records depreciation and
amortization in its consolidated statements of operations as either Cost of sales, Selling, general and administrative expenses or
Research and development expenses consistent with the utilization of the underlying assets. Depreciation is calculated on a
straight-line basis over the following estimated useful lives of depreciable assets:
Land improvements ................................................................................................................................................
Buildings and improvements ..................................................................................................................................
Machinery and equipment .......................................................................................................................................
20 years
30 years
20 years
Leasehold improvements are amortized over 10 years or the remaining life of the respective lease, whichever is shorter.
Accelerated depreciation is recorded when the estimated useful life is shortened. Ordinary repair and maintenance costs,
including costs for planned maintenance turnarounds, that do not extend the useful life of the asset are charged to earnings as
incurred. Fully depreciated assets are retained in property and depreciation accounts until sold or otherwise disposed. In the
case of disposals, assets and related depreciation are removed from the accounts, and the net amounts, less proceeds from
disposal, are included in earnings.
The Company assesses the recoverability of the carrying amount of its property, plant and equipment whenever events or
changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment
loss would be assessed when estimated undiscounted future cash flows from the operation and disposition of the asset group are
less than the carrying amount of the asset group. Asset groups have identifiable cash flows and are largely independent of other
asset groups. Measurement of an impairment loss is based on the excess of the carrying amount of the asset group over its fair
value. The Company calculates the fair value using a discounted cash flow model incorporating discount rates commensurate
with the risks involved for the asset group, which is classified as a Level 3 fair value measurement. The key assumptions used
in the discounted cash flow valuation model include discount rates, growth rates, tax rates, cash flow projections and terminal
value rates. Discount rates, growth rates and cash flow projections involve significant judgment and are based on management's
estimate of current and forecasted market conditions and cost structure. Impairment losses are generally recorded in Other
(charges) gains, net in the consolidated statements of operations.
Definite-lived Intangible Assets
Customer-related intangible assets and other intangible assets with finite lives are amortized on a straight-line basis over their
estimated useful lives, which range from six to 30 years.
Derivative and Hedging Instruments
The Company manages its exposures to interest rates, foreign exchange rates and commodity prices through a risk management
program that includes the use of derivative financial instruments. The Company does not use derivative financial instruments
for speculative trading purposes. The fair value of derivative instruments other than foreign currency forwards and swaps is
recorded as an asset or liability on a net basis at the balance sheet date.
•
Interest Rate Risk Management
The Company entered into a forward-starting interest rate swap to mitigate the risk of variability in the benchmark interest rate
for debt issued in 2021. The interest rate swap agreement was designated as a cash flow hedge. Accordingly, to the extent the
cash flow hedges were effective, changes in the fair value of the interest rate swap were included in gain (loss) from cash flow
hedges within Accumulated other comprehensive income (loss), net in the consolidated balance sheets. The Company settled
the forward-starting interest rate swap in August 2021, resulting in a payment to the counterparty of $72 million, which
payment was included as part of financing activities in the consolidated statements of cash flows.
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•
Foreign Exchange Risk Management
Certain subsidiaries of the Company have assets and liabilities denominated in currencies other than their respective functional
currencies, which creates foreign exchange risk. The Company also is exposed to foreign currency fluctuations on transactions
with third-party entities as well as intercompany transactions. The Company minimizes its exposure to foreign currency
fluctuations by entering into foreign currency forwards and swaps. These foreign currency forwards and swaps are not
designated as hedges. Gains and losses on foreign currency forwards and swaps entered into to offset foreign exchange impacts
on intercompany balances are included in Other income (expense), net in the consolidated statements of operations. Gains and
losses on foreign currency forwards and swaps entered into to offset foreign exchange impacts on all other assets and liabilities
are included in Foreign exchange gain (loss), net in the consolidated statements of operations.
The Company uses non-derivative financial instruments that may give rise to foreign currency transaction gains or losses to
hedge the foreign currency exposure of net investments in foreign operations. Accordingly, the effective portion of gains and
losses from remeasurement of the non-derivative financial instrument is included in foreign currency translation within
Accumulated other comprehensive income (loss), net in the consolidated balance sheets. Gains and losses are reclassified to
earnings in the period the hedged investment is sold or liquidated.
The Company entered into cross-currency swaps to synthetically convert its USD borrowings to EUR borrowings in 2019 and
2022. The cross-currency swap agreements are designated as a net investment hedge. Accordingly, to the extent the net
investment hedges are effective, changes in the fair value of the cross-currency swap are included in foreign currency
translation within Accumulated other comprehensive income (loss), net in the consolidated balance sheets. Gains and losses are
reclassified to earnings in the period the hedged investment is sold or liquidated.
•
Commodity Risk Management
The Company has exposure to the prices of commodities in its procurement of certain raw materials. The Company manages its
exposure to commodity risk primarily through the use of long-term supply agreements, multi-year purchasing and sales
agreements and forward purchase contracts. The Company regularly assesses its practice of using forward purchase contracts
and other raw material hedging instruments in accordance with changes in economic conditions. Forward purchases and swap
contracts for raw materials are principally settled through physical delivery of the commodity. For qualifying contracts, the
Company has elected to apply the normal purchases and normal sales exception based on the probability at the inception and
throughout the term of the contract that the Company would not net settle and the transaction would result in the physical
delivery of the commodity. Accordingly, realized gains and losses on these contracts are included in the cost of the commodity
upon the settlement of the contract.
The Company also uses commodity swaps to hedge the risk of fluctuating price changes in certain raw materials and in which
physical settlement does not occur. These commodity swaps fix the variable fee component of the price of certain commodities.
All or a portion of these commodity swap agreements may be designated as cash flow hedges. Accordingly, to the extent the
cash flow hedge was effective, changes in the fair value of commodity swaps are included in gain (loss) from cash flow hedges
within Accumulated other comprehensive income (loss), net in the consolidated balance sheets. Gains and losses are
reclassified to earnings in the period that the hedged item affected earnings.
Asset Retirement Obligations
Periodically, the Company will conclude a site no longer has an indeterminate life based on long-lived asset impairment
triggering events and decisions made by the Company. Accordingly, the Company will record asset retirement obligations
associated with such sites. To measure the fair value of the asset retirement obligations, the Company will use the expected
present value technique, which is classified as a Level 3 fair value measurement. The expected present value technique uses a
set of cash flows that represent the probability-weighted average of all possible cash flows based on the Company's judgment.
The Company uses the following inputs to determine the fair value of the asset retirement obligations based on the Company's
experience with fulfilling obligations of this type and the Company's knowledge of market conditions: (a) labor costs;
(b) allocation of overhead costs; (c) profit on labor and overhead costs; (d) effect of inflation on estimated costs and profits;
(e) risk premium for bearing the uncertainty inherent in cash flows, other than inflation; (f) time value of money represented by
the risk-free interest rate commensurate with the timing of the associated cash flows; and (g) nonperformance risk relating to
the liability, which includes the Company's own credit risk. The asset retirement obligations are accreted to their undiscounted
values until the time at which they are expected to be settled.
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The Company has identified but not recognized asset retirement obligations related to certain of its existing operating facilities.
Examples of these types of obligations include demolition, decommissioning, disposal and restoration activities. Legal
obligations exist in connection with the retirement of these assets upon closure of the facilities or abandonment of the existing
operations. However, the Company currently plans on continuing operations at these facilities indefinitely and therefore, a
reasonable estimate of fair value cannot be determined at this time. In the event the Company considers plans to abandon or
cease operations at these sites, an asset retirement obligation will be reassessed at that time. If certain operating facilities were
to close, the related asset retirement obligations could significantly affect the Company's results of operations and cash flows.
Environmental Liabilities
The Company manufactures and sells a diverse line of chemical products throughout the world. Accordingly, the Company's
operations are subject to various hazards incidental to the production of industrial chemicals including the use, handling,
processing, storage and transportation of hazardous materials. The Company recognizes losses and accrues liabilities relating to
environmental matters if available information indicates that it is probable that a liability has been incurred and the amount of
loss can be reasonably estimated. Depending on the nature of the site, the Company accrues through 15 years, unless the
Company has government orders or other agreements that extend beyond 15 years. The Company estimates environmental
liabilities on a case-by-case basis using the most current status of available facts, existing technology, presently enacted laws
and regulations and prior experience in remediation of contaminated sites. Recoveries of environmental costs from other parties
are recorded as assets when their receipt is deemed probable.
An environmental liability related to cleanup of a contaminated site might include, for example, a provision for one or more of
the following types of costs: site investigation and testing costs, cleanup costs, costs related to soil and water contamination
resulting from tank ruptures and post-remediation monitoring costs. These undiscounted liabilities do not take into account any
claims or recoveries from insurance. The measurement of environmental liabilities is based on the Company's periodic estimate
of what it will cost to perform each of the elements of the remediation effort. The Company utilizes third parties to assist in the
management and development of cost estimates for its sites. Changes to environmental regulations or other factors affecting
environmental liabilities are reflected in the consolidated financial statements in the period in which they occur.
Loss Contingencies
When determinable, the Company accrues a liability for loss contingencies deemed probable of occurring for which an amount
can be reasonably estimated. For certain potentially material loss contingencies, the Company is sometimes unable to estimate
and accrue a loss deemed probable of occurring. For such matters, the Company discloses an estimate of the possible loss,
range of loss or a statement that such estimate cannot be made.
Because the Company's evaluation and assessment of critical facts and circumstances surrounding a contingent loss often
occurs well in advance of the matter's final determination, there is an inherent subjectivity and unpredictability involved in
estimating, accounting for and reporting contingent losses. Generally, the less progress made in the resolution of a contingent
loss matter or the broader the range of potential outcomes, the more difficult it is for the Company to estimate, accrue and
report a loss. For example, the Company may disclose certain information about a plaintiff's legal claim against the Company
that is alleged in the plaintiff's pleadings or otherwise publicly available. While information of this type may provide more
insight into the potential magnitude of a matter, it may not necessarily be indicative of the Company's estimate of probable or
possible loss. In addition, some of the Company's contingent loss exposures may be eligible for reimbursement under the
provisions of its insurance coverage. The Company does not consider the potential availability of insurance coverage in
determining its probable or possible loss estimates. As a result of these factors among others, the Company's ultimate
contingent loss exposure may be higher or lower, and possibly materially so, than the Company's recorded probable loss
accruals and disclosures of possible losses.
Revenue Recognition
Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority
of the Company's contracts have a single performance obligation to transfer products. Accordingly, the Company recognizes
revenue when title and risk of loss have been transferred to the customer, generally at the time of shipment of products.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and
is generally based upon a negotiated, formula, list or fixed price. The Company sells its products both directly to customers and
through distributors generally under agreements with payment terms typically less than 90 days.
The Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the good. As such,
shipping and handling fees billed to customers in a sales transaction are recorded in Net sales and shipping and handling costs
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incurred are recorded in Cost of sales. The Company has elected to exclude from Net sales any value add, sales and other taxes
which it collects concurrent with revenue-producing activities.
•
Contract Estimates
The nature of certain of the Company's contracts gives rise to variable consideration, which may be constrained, including
retrospective volume-based rebates to certain customers. The Company issues retrospective volume-based rebates to customers
when they purchase a certain volume level, and the rebates are applied retroactively to prior purchases. The Company also
issues prospective volume-based rebates to customers when they purchase a certain volume level, and the rebates are applied to
future purchases. Prospective volume-based rebates represent a material right within the contract and therefore are considered to
be separate performance obligations. For both retrospective and prospective volume-based rebates, the Company estimates the
level of volumes based on anticipated purchases at the beginning of the period and records a rebate accrual for each purchase
toward the requisite rebate volume. These estimated rebates, which are reassessed each reporting period, are included in the
transaction price of the Company's contracts with customers as a reduction to Net sales and are included in Current Other
liabilities in the consolidated balance sheets (Note 10).
The majority of the Company's revenue is derived from contracts (i) with an original expected length of one year or less and (ii)
contracts for which it recognizes revenue at the amount in which it has the right to invoice as product is delivered. The
Company has elected the practical expedient not to disclose the value of remaining performance obligations associated with
these types of contracts. However, the Company has certain contracts that represent take-or-pay revenue arrangements in which
the Company's performance obligations extend over multiple years. As of December 31, 2022, the Company had $1.4 billion of
remaining performance obligations related to take-or-pay contracts. The Company expects to recognize approximately
$430 million of its remaining performance obligations as Net sales in 2023, $430 million in 2024, $304 million in 2025 and the
balance thereafter.
The Company has certain contracts which contain performance obligations which are immaterial in the context of the contract
with the customer. The Company has elected the practical expedient not to assess whether these promised goods or services are
performance obligations.
•
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 Noncurrent Other liabilities in the consolidated
balance sheets.
The Company does not have any material contract assets as of December 31, 2022.
Research and Development
The costs of research and development are charged as an expense in the period in which they are incurred.
Leases
The Company leases certain real estate, fleet assets, warehouses and equipment. Leases with an initial term of 12 months or less
("short-term leases") are not recorded on the consolidated balance sheet; the Company recognizes lease expense for these leases
on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception.
Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized based on the present value of lease
payments over the lease term at commencement date. Because most of the Company's leases do not provide an implicit rate of
return, the Company uses its imputed collateralized rate based on the information available at commencement date in
determining the present value of lease payments. The estimated rate is based on a risk-free rate plus a risk-adjusted margin.
Operating lease ROU assets are comprised of the lease liability plus prepaid rents and are reduced by lease incentives or
deferred rents. The Company has lease agreements with non-lease components which are not bifurcated.
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Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 30 years. The
exercise of a lease renewal option typically occurs at the discretion of both parties. Certain leases also include options to
purchase the leased property. For purposes of calculating operating lease liabilities, lease terms are deemed not to include
options to extend the lease termination until it is reasonably certain that the Company will exercise that option. Certain of the
Company's lease agreements include payments adjusted periodically for inflation based on the consumer price index. The
Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Functional and Reporting Currencies
For the Company's international operations where the functional currency is other than the U.S. dollar, assets and liabilities are
translated using period-end exchange rates, while the statement of operations amounts are translated using the average exchange
rates for the respective period. Differences arising from the translation of assets and liabilities in comparison with the
translation of the previous periods or from initial recognition during the period are included as a separate component of
Accumulated other comprehensive income (loss), net.
3. Recent Accounting Pronouncements
There are no recent Accounting Standard Updates issued by the Financial Accounting Standards Board which are expected to
materially impact the Company's financial position, operating results or financial disclosures.
4. Acquisitions, Dispositions and Plant Closures
Acquisitions
•
Santoprene
In December 2021, the Company acquired the Santoprene™ thermoplastic vulcanizates ("TPV") elastomers business of Exxon
Mobil Corporation ("Santoprene") for a purchase price of $1.15 billion in an all-cash transaction. The Company acquired the
Santoprene™, Dytron™ and Geolast™ trademarks and product portfolios, customer and supplier contracts and agreements,
both production facilities producing TPV, the TPV intellectual property portfolio with associated technical and R&D assets and
employees of the TPV elastomer business. The acquisition of Santoprene substantially strengthens the Company's existing
elastomers portfolio, allowing the Company to bring a wider range of functionalized solutions into targeted growth areas
including future mobility, medical and sustainability. The acquisition was accounted for as a business combination and the
acquired operations are included in the Engineered Materials segment.
The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on
their estimated fair values as of the acquisition date. The purchase price allocation was based upon preliminary information.
During the measurement period, there were no adjustments that materially impacted the Company's goodwill initially recorded.
• Mobility & Materials
On November 1, 2022, the Company acquired 100% ownership of entities and assets consisting of a majority of the Mobility &
Materials business ("M&M") of DuPont de Nemours, Inc. ("DuPont") (the "M&M Acquisition") for a purchase price of
$11.0 billion, subject to transaction adjustments, in an all-cash transaction. The Company acquired a global production network
of 29 facilities, including compounding and polymerization, customer and supplier contracts and agreements, an intellectual
property portfolio, including approximately 850 patents with associated technical and R&D assets, and approximately 5,000
employees across the manufacturing, technical, and commercial organizations. This acquisition of M&M enhances the
engineered materials product portfolio by adding new polymers, brands, product technology, and backward integration in
critical polymers, allowing the Company to accelerate growth in high-value applications including future mobility, connectivity
and medical. The acquisition was accounted for as a business combination and the acquired operations are included in the
Engineered Materials segment.
The Company preliminarily allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed
based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values
was recorded as goodwill. The Company calculated the fair value of the assets acquired using the income, market or cost
approach (or a combination thereof). Fair values of certain assets were determined based on Level 3 inputs including estimated
future cash flows, discount rates, royalty rates, growth rates, sales projections, retention rates and terminal values, all of which
require significant management judgment and are susceptible to change. The purchase price allocation was based upon
preliminary information and is subject to change if additional information about the facts and circumstances that existed at the
acquisition date becomes available. The Company is in the ongoing process of conducting a valuation of the assets acquired and
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liabilities assumed related to the acquisition, including trade names and customer relationships, personal and real property, and
deferred taxes. The final fair value of the net assets acquired may result in adjustments to these assets and liabilities, including
goodwill. However, any subsequent measurement period adjustments are not expected to have a material impact on the
Company's results of operations.
The preliminary purchase price allocation for the M&M Acquisition is as follows:
Cash and cash equivalents ................................................................................................................................
Trade receivables - third party and affiliates (Note 5) .....................................................................................
Inventories (Note 6) .........................................................................................................................................
Current other assets ..........................................................................................................................................
Property, plant and equipment, net (Note 8) ....................................................................................................
Intangible assets (Note 9) .................................................................................................................................
Customer-related intangible assets ................................................................................................................
Trade names ...................................................................................................................................................
Developed technology ...................................................................................................................................
Goodwill (Note 9)(1)
.........................................................................................................................................
Other assets ......................................................................................................................................................
Total fair value of assets acquired ...........................................................................................................
Trade payables - third party and affiliates ........................................................................................................
Current other liabilities (Note 10) ....................................................................................................................
Deferred income taxes (Note 15) .....................................................................................................................
Noncurrent operating lease liabilities (Note 16) ..............................................................................................
Other liabilities .................................................................................................................................................
Total fair value of liabilities assumed ......................................................................................................
Noncontrolling interests ..............................................................................................................................
Net assets acquired ...............................................................................................................................
As of
November 1, 2022
(In $ millions)
462
484
1,078
311
1,281
1,500
1,400
550
5,788
359
13,213
(458)
(339)
(1,006)
(159)
(77)
(2,039)
(125)
11,049
______________________________
(1) Goodwill consists of expected revenue and operating synergies resulting from the acquisition, a portion of which is
expected to be deductible for income tax purposes.
The following unaudited pro forma financial information presents the consolidated results of operations as if the M&M
acquisition had occurred at the beginning of 2021. M&M's pre-acquisition results have been added to the Company's historical
results. The pro forma results contained in the table below include adjustments for (i) increased depreciation expense as a result
of acquisition date fair value adjustments, (ii) amortization of acquired intangibles, (iii) interest expense and amortization of
debt issuance costs of $366 million and $674 million related to borrowings under the Term Loan Facility and the issuance of
Acquisition Notes as if these had taken place at the beginning of 2021 for the years ended December 31, 2022 and 2021,
respectively and (iv) net total inventory step up of inventory amortized to Cost of sales of $66 million for the years ended
December 31, 2022 and 2021.
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These pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of
operations as they would have been had the acquisitions occurred on the assumed dates, nor are they necessarily an indication
of future operating results.
Year Ended
December 31,
2022
2021
(In millions)
Unaudited Consolidated Pro Forma Results
Proforma Net sales .............................................................................................................................. $
Proforma Earnings (loss) from continuing operations before tax .......................................................
12,614 $
888
12,069
1,843
The amount of M&M Net sales and Earnings (loss) from continuing operations before tax consolidated by the Company since
the acquisition date were $430 million and $(80) million, respectively.
During the year ended December 31, 2022, transaction related costs of $117 million were expensed as incurred to Selling,
general and administrative expenses in the consolidated statements of operations.
Korea Engineering Plastics Co. Restructuring
On April 1, 2022, the Company completed the restructuring of Korea Engineering Plastics Co. ("KEPCO"), a joint venture
owned 50% by the Company and 50% by Mitsubishi Gas Chemical Company, Inc. KEPCO was first formed in 1987 to
manufacture and market polyoxymethylene ("POM") in Asia, with a particular focus on serving domestic demand in South
Korea. KEPCO will now focus solely on manufacturing and supplying high quality products to its shareholders, who will
independently market them globally. As part of the restructuring of KEPCO, the Company paid KEPCO $5 million and will
pay 5 equal annual installments of €24 million on October 1 of each year beginning in 2022. This resulted in an increase to the
Company's investment in KEPCO of $134 million. The Company's joint venture partner will be making similar payments to
KEPCO. The restructuring did not result in a change in ownership percentage of KEPCO, nor a change in control, and KEPCO
will continue to be accounted for as an equity method investment.
Plant Closures
•
Silao, Mexico
In September 2022, the Company announced that it will cease manufacturing operations at the Engineered Materials
compounding facility in Silao, Mexico by the end of 2022, with decommissioning taking place in 2023. Manufacturing
operations formally ceased on December 16, 2022.
The exit and shutdown costs related to this closure are as follows:
Asset impairments(1)
.........................................................................................................................................
Restructuring(1)
.................................................................................................................................................
Accelerated amortization expense ....................................................................................................................
Plant/Office closure(1)
.......................................................................................................................................
Total .............................................................................................................................................................
______________________________
(1)
Included in Other (charges) gains, net in the consolidated statements of operations (Note 24).
Year Ended
December 31,
2022
(In $ millions)
(8)
(1)
(10)
8
(11)
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5. Receivables, Net
Trade receivables - third party and affiliates .......................................................................................
Allowance for doubtful accounts - third party and affiliates ...............................................................
Trade receivables - third party and affiliates, net ............................................................................
Non-income taxes receivable ...............................................................................................................
Income taxes receivable .......................................................................................................................
Other(1)
.................................................................................................................................................
Non-trade receivables, net ..............................................................................................................
____________________________
As of December 31,
2022
2021
(In $ millions)
1,394
(15)
1,379
1,171
(10)
1,161
As of December 31,
2022
2021
(In $ millions)
334
26
315
675
282
123
101
506
(1)
Includes $193 million of non-trade receivables related to the M&M Acquisition as of December 31, 2022.
6. Inventories
Finished goods .....................................................................................................................................
Work-in-process ..................................................................................................................................
Raw materials and supplies .................................................................................................................
Total ................................................................................................................................................
7. Investments in Affiliates
As of December 31,
2022
2021
(In $ millions)
1,820
202
786
2,808
1,014
75
435
1,524
Entities in which the Company has an investment accounted for under the equity method of accounting or equity investments
without readily determinable fair values are considered affiliates; any transactions or balances with such companies are
considered affiliate transactions.
In October 2020, the Company completed the sale of its 45% joint venture equity interest in Polyplastics Co., Ltd.
("Polyplastics"), to its joint venture partner Daicel Corporation ("Daicel"), for a purchase price of approximately $1.6 billion in
cash. In connection with the transaction, the Company recorded a gain on the sale of its equity interest in Polyplastics of
$1.4 billion to Gain (loss) on sale of investments in affiliates in the consolidated statements of operations and income tax
expense, net, of approximately $254 million during the three months ended December 31, 2020. The gain on the sale of the
Company's equity interest in Polyplastics was included in its Engineered Materials segment.
In addition to the sale of the Company's 45% equity interest in Polyplastics, the agreement also provided for the amendment of
certain supply agreements and the execution of certain intellectual property licenses between Celanese, certain of its affiliates
and Polyplastics and Daicel, as applicable, as well as the termination of certain agreements and a mutual release of liabilities
under such terminated agreements.
Equity Method
As a part of the M&M Acquisition, the Company acquired certain equity method investments and ownership interests. See
Strategic Affiliates in Item 1. Business for additional information.
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Table of Contents
The Company has ownership interests in 13 equity method investments ranging from 22% to 50% at December 31, 2022.
Equity method investments by business segment are as follows:
Carrying
Value as of
December 31,
Share of
Earnings (Loss)
Year Ended
December 31,
Dividends and
Other Distributions
Year Ended
December 31,
2022
2021
2022
2021
2020
2022
2021
2020
(In $ millions)
Engineered Materials(1)
..........................................................
Other Activities ......................................................................
Total ...................................................................................
760
53
813
595
58
653
209
11
220
133
13
146
120
14
134
(204)
(13)
(98) (137)
(10)
(14)
(217) (112) (147)
____________________________
(1) Engineered Materials includes an equity method investment with losses in excess of its carrying amount due to
the Company's guarantee of various debt obligations under agreements with third parties related to an equity affiliate
(Note 19). This equity method investment was recorded in Current other liabilities (Note 10) as of December 31, 2022.
Equity Investments Without Readily Determinable Fair Values
The Company has ownership interests in 4 equity investments without readily determinable fair values ranging from 8% to 31%
at December 31, 2022.
Equity investments without readily determinable fair values by business segment are as follows:
Carrying
Value
as of
December 31,
Dividend
Income for the
Year Ended
December 31,
2022
2021
2022
2021
2020
Acetyl Chain ...............................................................................................................
Other Activities ..........................................................................................................
Total .......................................................................................................................
165
5
170
Transactions with Affiliates
(In $ millions)
132
1
133
165
5
170
146
1
147
126
—
126
The Company owns manufacturing facilities at the InfraServ location in Frankfurt am Main-Hoechst, Germany and has
contractual agreements with the InfraServ Entities and certain other equity affiliates and investees accounted for at cost less
impairment, adjusted for observable price changes for an identical or similar investment of the same issuer. These contractual
agreements primarily relate to energy purchases, site services and purchases of product for consumption and resale.
Transactions and balances with affiliates are as follows:
Purchases ......................................................................................................................
Sales and other credits ..................................................................................................
Year Ended December 31,
2022
2021
2020
(In $ millions)
334
74
590
72
249
42
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Table of Contents
Trade receivables .................................................................................................................................
Non-trade receivables ..........................................................................................................................
Total due from affiliates ..................................................................................................................
Short-term borrowings(1)
......................................................................................................................
Trade payables .....................................................................................................................................
Current Other liabilities .......................................................................................................................
Total due to affiliates .......................................................................................................................
As of December 31,
2022
2021
(In $ millions)
8
36
44
—
36
37
73
—
32
32
64
71
12
147
______________________________
(1) The Company has agreements with certain affiliates whereby excess affiliate cash is lent to and managed by the Company
at variable interest rates governed by those agreements.
8. Property, Plant and Equipment, Net
Land .....................................................................................................................................................
Land improvements .............................................................................................................................
Buildings and building improvements .................................................................................................
Machinery and equipment ...................................................................................................................
Construction in progress ......................................................................................................................
Gross asset value ...............................................................................................................................
Accumulated depreciation .................................................................................................................
Net book value ..............................................................................................................................
As of December 31,
2022
2021
(In $ millions)
291
83
1,062
6,897
938
9,271
(3,687)
5,584
48
78
833
5,993
725
7,677
(3,484)
4,193
Assets under finance leases, net, included in the amounts above were $176 million and $131 million as of December 31, 2022
and 2021, respectively.
Capitalized interest costs and depreciation expense are as follows:
Capitalized interest .......................................................................................................
Depreciation expense ...................................................................................................
During 2022, 2021 and 2020, certain long-lived assets were impaired (Note 24).
Year Ended December 31,
2022
2021
2020
(In $ millions)
12
346
18
399
8
327
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9. Goodwill and Intangible Assets, Net
Goodwill
As of December 31, 2020 .......................................................................................
Acquisitions ............................................................................................................
Exchange rate changes ............................................................................................
As of December 31, 2021 ....................................................................................
Acquisitions (Note 4) ...........................................................................................
Exchange rate changes .........................................................................................
.............................................................................
As of December 31, 2022(3)
______________________________
(1) Primarily represents goodwill related to the acquisition of Santoprene.
(2) Primarily represents goodwill related to the acquisition of M&M.
(3) There were no accumulated impairment losses as of December 31, 2022.
Engineered
Materials
Acetyl
Chain
Total
(In $ millions)
398
2
(18)
382
—
(15)
367
768
299
(37)
1,030
5,781
(36)
6,775
1,166
301 (1)
(55)
1,412
5,781 (2)
(51)
7,142
In connection with the Company's annual goodwill impairment assessment, the Company did not record an impairment loss to
goodwill during the nine months ended September 30, 2022, as the estimated fair value for each of the Company's reporting
units exceeded the carrying amount of the underlying assets by a substantial margin (Note 2). No events or changes in
circumstances occurred during the three months ended December 31, 2022 that indicated the carrying amount of the assets may
not be fully recoverable. Accordingly, no additional impairment analysis was performed during that period.
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Table of Contents
Intangible Assets, Net
Finite-lived intangible assets are as follows:
Gross Asset Value
As of December 31, 2020 ...............................................
Acquisitions (Note 4) .....................................................
Exchange rate changes ...................................................
As of December 31, 2021 .............................................
Acquisitions (Note 4) ...................................................
Disposals ......................................................................
Accumulated impairment losses (Note 4) ....................
Exchange rate changes .................................................
As of December 31, 2022 ..........................................
Accumulated Amortization
As of December 31, 2020 ...............................................
Amortization ..................................................................
Exchange rate changes ...................................................
As of December 31, 2021 .............................................
Amortization .................................................................
Disposals ......................................................................
Accumulated impairment losses (Note 4) ....................
Exchange rate changes .................................................
As of December 31, 2022 ..........................................
Net book value ......................................................
Customer-
Related
Intangible
Assets
Licenses
Covenants
Not to
Compete
and Other
Total
Developed
Technology
(In $ millions)
44
—
1
45
—
—
—
(3)
42
(38)
(2)
(1)
(41)
(1)
—
—
3
(39)
3
724
307
(35)
996
1,509
(2)
(4)
(44)
2,455
(555)
(19)
31
(543)
(51)
2
2
23
(567)
1,888
45
—
—
45
550
—
—
6
601
(40)
(3)
1
(42)
(9)
—
—
1
(50)
551
56
—
(1)
55
—
—
—
—
55
(39)
(1)
1
(39)
(1)
—
—
—
(40)
15
869
307 (1)
(35)
1,141
2,059 (2)
(2)
(4)
(41)
3,153
(672)
(25)
32
(665)
(62)
2
2
27
(696)
2,457
______________________________
(1) Primarily related to $300 million of intangible assets acquired from Santoprene with a weighted average amortization
period of 14 years.
(2) Primarily related to $1.5 billion of customer-related intangible assets and $550 million of developed technology acquired
from M&M with weighted average amortization periods of 20 years and 13 years, respectively, and 18 years in total.
Indefinite-lived intangible assets are as follows:
As of December 31, 2020 ...........................................................................................................................
Acquisitions (Note 4) ..................................................................................................................................
Exchange rate changes ................................................................................................................................
As of December 31, 2021 ........................................................................................................................
Acquisitions (Note 4) ...............................................................................................................................
Exchange rate changes .............................................................................................................................
As of December 31, 2022 ....................................................................................................................
______________________________
(1) Related to indefinite-lived intangible assets acquired from Santoprene.
(2) Related to indefinite-lived intangible assets acquired from M&M.
84
Trademarks
and Trade Names
(In $ millions)
122
142 (1)
(5)
259
1,400 (2)
(11)
1,648
Table of Contents
In connection with the Company's annual indefinite-lived intangible assets impairment assessment, the Company did not record
an impairment loss during the nine months ended September 30, 2022, as the estimated fair value for each of the Company's
indefinite-lived intangible assets exceeded the carrying value of the underlying asset by a substantial margin (Note 2). No
events or changes in circumstances occurred during the three months ended December 31, 2022 that indicated the carrying
amount of the assets may not be fully recoverable. Accordingly, no additional impairment analysis was performed during that
period.
During the year ended December 31, 2022, the Company did not renew or extend any intangible assets.
Estimated amortization expense for the succeeding five fiscal years is as follows:
2023 ..................................................................................................................................................................
2024 ..................................................................................................................................................................
2025 ..................................................................................................................................................................
2026 ..................................................................................................................................................................
2027 ..................................................................................................................................................................
(In $ millions)
161
160
160
160
160
10. Current Other Liabilities
As of December 31,
2022
2021
(In $ millions)
Benefit obligations (Note 12) ..............................................................................................................
Customer rebates .................................................................................................................................
Derivatives (Note 17) ..........................................................................................................................
Interest (Note 11) .................................................................................................................................
Legal (Note 19) ....................................................................................................................................
Operating leases (Note 16) ..................................................................................................................
Restructuring (Note 24) .......................................................................................................................
Salaries and benefits ............................................................................................................................
Sales and use tax/foreign withholding tax payable ..............................................................................
Investment in affiliates (Note 7) ..........................................................................................................
Other(1)
.................................................................................................................................................
Total ................................................................................................................................................
25
101
63
265
21
83
6
151
108
79
299
1,201
____________________________
(1)
Includes $166 million of liabilities related to the M&M Acquisition payable to DuPont as of December 31, 2022.
26
96
5
30
33
37
7
135
27
—
77
473
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Table of Contents
11. Debt
Short-Term Borrowings and Current Installments of Long-Term Debt - Third Party and
Affiliates
Current installments of long-term debt .............................................................................................
Short-term borrowings, including amounts due to affiliates(1)
..........................................................
Revolving credit facility(2)
.................................................................................................................
Total ..............................................................................................................................................
As of December 31,
2022
2021
(In $ millions)
506
500
300
1,306
527
64
200
791
______________________________
(1) The weighted average interest rate was 5.8% and 0.2% as of December 31, 2022 and 2021, respectively.
(2) The weighted average interest rate was 5.8% and 1.4% as of December 31, 2022 and 2021, respectively.
Long-Term Debt
Senior unsecured notes due 2022, interest rate of 4.625% ...............................................................
Senior unsecured notes due 2023, interest rate of 1.125% ...............................................................
Senior unsecured notes due 2024, interest rate of 3.500% ...............................................................
Senior unsecured notes due 2024, interest rate of 5.900% ...............................................................
Senior unsecured notes due 2025, interest rate of 1.250% ...............................................................
Senior unsecured notes due 2025, interest rate of 6.050% ...............................................................
Senior unsecured term loan due 2025, interest rate of 5.934% .........................................................
Senior unsecured notes due 2026, interest rate of 1.400% ...............................................................
Senior unsecured notes due 2026, interest rate of 4.777% ...............................................................
Senior unsecured notes due 2027, interest rate of 2.125% ...............................................................
Senior unsecured notes due 2027, interest rate of 6.165% ...............................................................
Senior unsecured term loan due 2027, interest rate of 5.934% .........................................................
Senior unsecured notes due 2028, interest rate of 0.625% ...............................................................
Senior unsecured notes due 2029, interest rate of 5.337% ...............................................................
Senior unsecured notes due 2029, interest rate of 6.330% ...............................................................
Senior unsecured notes due 2032, interest rate of 6.379% ...............................................................
Pollution control and industrial revenue bonds due at various dates through 2030, interest rates
ranging from 4.05% to 5.00% .......................................................................................................
Bank loans due at various dates through 2026(1)
...............................................................................
Obligations under finance leases due at various dates through 2054 ...............................................
Subtotal .........................................................................................................................................
Unamortized debt issuance costs(2)
...................................................................................................
Current installments of long-term debt .............................................................................................
Total ..............................................................................................................................................
As of December 31,
2022
2021
(In $ millions)
—
480
499
2,000
320
1,750
750
400
1,067
531
2,000
1,000
533
533
750
1,000
500
509
499
—
339
—
—
400
—
564
—
—
566
—
—
—
164
4
172
13,953
(74)
(506)
13,373
166
6
173
3,722
(19)
(527)
3,176
______________________________
(1) The weighted average interest rate was 1.3% and 1.3% as of December 31, 2022 and 2021, respectively.
(2) Related to the Company's long-term debt, excluding obligations under finance leases.
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Senior Credit Facilities
In connection with the M&M Acquisition, on February 17, 2022, the Company entered into a bridge facility commitment letter
with Bank of America, N.A. ("Bank of America") pursuant to which Bank of America committed to provide, subject to the
terms and conditions set forth therein, a 364-day $11.0 billion senior unsecured bridge term loan facility (the "Bridge Facility").
Subsequently, commitments in respect of the Bridge Facility were syndicated to additional financial institutions as
contemplated thereby.
On March 18, 2022, Celanese, Celanese U.S. and certain subsidiaries entered into a term loan credit agreement (the
"March 2022 Term Loan Credit Agreement"), pursuant to which lenders provided a tranche of delayed-draw term loans due 364
days from issuance in an amount equal to $500 million and a tranche of delayed-draw term loans due 5 years from issuance in
an amount equal to $1.0 billion. On September 16, 2022, Celanese, Celanese U.S. and certain subsidiaries entered into an
additional term loan credit agreement (the "September 2022 Term Loan Credit Agreement" and, together with the March 2022
Term Loan Credit Agreement, the "Term Loan Credit Agreements"), pursuant to which lenders have provided delayed-draw
term loans due 3 years from issuance in an amount equal to $750 million (the term loans represented by the Term Loan Credit
Agreements collectively, the "Term Loan Facility"). The Term Loan Facility was fully drawn during the three months ended
December 31, 2022.
Amounts outstanding under the 364-day tranche of the Term Loan Facility will accrue interest at a rate equal to Secured
Overnight Financing Rate with an interest period of one or three months ("Term SOFR") plus a margin of 1.00% to 2.00% per
annum, or the base rate plus a margin of 0.00% to 1.00%, in each case, based on the Company's senior unsecured debt rating.
Amounts outstanding under the 5-year tranche of the Term Loan Facility and 3-year tranche of the Term Loan Facility will
accrue interest at a rate equal to Term SOFR plus a margin of 1.125% to 2.125% per annum, or the base rate plus a margin of
0.125% to 1.125%, in each case, based on the Company's senior unsecured debt rating.
The entry into the Term Loan Credit Agreements and offerings of USD- and euro-denominated notes (as described below)
reduced availability under the Bridge Facility to zero and the Company terminated the Bridge Facility.
Also on March 18, 2022, Celanese, Celanese U.S. and certain subsidiaries entered into a new revolving credit facility (the "New
Revolving Credit Agreement" and, together with the Term Loan Credit Agreements, the "Credit Agreements") consisting of a
$1.75 billion senior unsecured revolving credit facility (with a letter of credit sublimit), maturing in 2027. The proceeds of a
$365 million borrowing under the new senior unsecured revolving credit facility were used to repay and terminate the
Company's existing revolving credit facility. The Credit Agreements are guaranteed by Celanese, Celanese U.S. and domestic
subsidiaries together representing substantially all of the Company's U.S. assets and business operations ("the Subsidiary
Guarantors"). The Subsidiary Guarantors are listed in Exhibit 22.1 to this Annual Report.
The Credit Agreements contain certain covenants, including the maintenance of certain financial ratios (subject to adjustment
following the M&M Acquisition and certain other qualifying acquisitions, as set forth in the Credit Agreements), events of
default and change of control provisions.
During the year ended December 31, 2022, the Company paid $66 million in fees related to the Bridge Facility commitment,
amortizing these fees to interest expense in the year ended December 31, 2022.
The Company's debt balances and amounts available for borrowing under its senior unsecured revolving credit facility are as
follows:
Revolving Credit Facility
Borrowings outstanding(1)
Available for borrowing(2)
..............................................................................................................................
.............................................................................................................................
As of
December 31, 2022
(In $ millions)
300
1,450
______________________________
(1) The Company borrowed $765 million and repaid $465 million under its new senior unsecured revolving credit facility
during the year ended December 31, 2022. The Company borrowed $165 million and repaid $365 million under its
previous unsecured revolving credit facility during the year ended December 31, 2022.
(2) The margin for borrowings under the senior unsecured revolving credit facility was 1.00% to 2.00% above certain
interbank rates at current Company credit ratings.
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Table of Contents
Senior Notes
The Company has outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933
("Securities Act"), as amended (collectively, the "Senior Notes"). The Senior Notes were issued by Celanese U.S. and are
guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors. Celanese U.S. may redeem some or all of
each of the Senior Notes, prior to their respective maturity dates, at a redemption price of 100% 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.
On July 14, 2022, Celanese U.S. completed an offering of $7.5 billion aggregate principal amount of notes of various maturities
in a public offering registered under the Securities Act (the "Acquisition USD Notes"). On July 19, 2022, Celanese U.S.
completed an offering of €1.5 billion in aggregate principal amount of euro-denominated senior unsecured notes due in 2026
and 2029 in a public offering registered under the Securities Act (collectively, the "Acquisition Euro Notes" and together with
the Acquisition USD Notes, the "Acquisition Notes"). Certain of the Acquisition Notes were issued at a discount to par, which
is amortized to Interest expense in the consolidated statement of operations over the terms of the applicable Acquisition Notes.
Fees and expenses of the offering of the Acquisition Notes, inclusive of underwriting discounts, were $65 million.
In August 2021, Celanese U.S. completed an offering of $400 million in principal amount of 1.400% senior unsecured notes
due August 5, 2026 (the "1.400% Notes") in a public offering registered under the Securities Act. The 1.400% Notes were
issued at a discount to par at a price of 99.899%, which is being amortized to Interest expense in the consolidated statement of
operations over the term of the 1.400% Notes. Net proceeds from the sale of the 1.400% Notes were used to repay $396 million
of outstanding borrowings under the senior unsecured revolving credit facility and for general corporate purposes.
In September 2021, Celanese U.S. completed an offering of €500 million in principal amount of 0.625% senior unsecured notes
due September 10, 2028 (the "0.625% Notes") in a public offering registered under the Securities Act. The 0.625% Notes were
issued at a discount to par at a price of 99.898%, which is being amortized to Interest expense in the consolidated statements of
operations over the term of the 0.625% Notes.
In September 2021, Celanese U.S. completed a cash tender offer for €300 million in principal amount of 1.125% senior
unsecured notes due September 26, 2023 (the "1.125% Notes") at a purchase price of €1,027.35 per €1,000 of principal amount
plus accrued interest, for a total principal and premium payment of $363 million plus accrued interest of $4 million. A portion
of the proceeds from the issuance of the 0.625% Notes were used to fund the tender offer for €300 million of the 1.125% Notes.
As a result of the tender offer, the carrying value of the 1.125% Notes was reduced by $353 million. The Company recognized
financing costs of $9 million, which are included in Refinancing expense in the consolidated statement of operations for the
year ended December 31, 2021.
Principal payments scheduled to be made on the Company's debt, including short-term borrowings, are as follows:
2023 ..................................................................................................................................................................
2024 ..................................................................................................................................................................
2025 ..................................................................................................................................................................
2026 ..................................................................................................................................................................
2027 ..................................................................................................................................................................
Thereafter .........................................................................................................................................................
Total .............................................................................................................................................................
(In $ millions)
1,306
2,544
2,908
1,566
3,550
2,879
14,753
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Table of Contents
Accounts Receivable Purchasing Facility
In June 2021, 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, 2024. 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 100% of the face value of
the relevant U.S. accounts receivable, resulting in derecognition of the U.S. accounts receivables from the Company's
consolidated balance sheet. The Company de-recognized $1.1 billion and $1.1 billion of accounts receivable under this
agreement for the years ended December 31, 2022 and 2021, respectively, and collected $1.1 billion and $1.1 billion of
accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $99 million were
pledged by the SPE as collateral to the Purchasers as of December 31, 2022.
Factoring and Discounting Agreements
The Company has factoring agreements in Europe and Singapore with financial institutions to sell 100% and 90% of certain
accounts receivable, respectively, on a non-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 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 $320 million and $230 million of accounts receivable under these factoring agreements for the
years ended December 31, 2022 and 2021, respectively, and collected $325 million and $185 million of accounts receivable
sold under these factoring agreements during the same periods.
In March 2021, the Company entered into an agreement in Singapore with a financial institution to discount, on a non-recourse
basis, documentary credits or other documents recorded as accounts receivable. These transactions are treated as a sale and are
accounted for as a reduction in accounts receivable because the agreement transfers effective control over and risk related to the
receivables to the buyer. The Company has no continuing involvement in the transferred receivables and, once sold, the
accounts receivable are no longer available to satisfy creditors in the event of bankruptcy. The Company de-recognized
$50 million and $70 million of accounts receivable under this agreement for the years ended December 31, 2022 and 2021,
respectively.
Covenants
The Company's material financing arrangements contain customary covenants, including the maintenance of certain financial
ratios (subject to adjustment following certain qualifying acquisitions, as set forth in the Credit Agreements), events of default
and change of control provisions. 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 all of the covenants
related to its debt agreements as of December 31, 2022. On February 21, 2023, the Company amended the Credit Agreements
for certain covenants included in the respective credit agreements.
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Table of Contents
12. Benefit Obligations
Pension Obligations
The Company sponsors defined benefit pension plans in North America, Europe and Asia. Independent trusts or insurance
companies administer the majority of these plans. Pension obligations are established for benefits payable in the form of
retirement, disability and surviving dependent pensions. The commitments result from participation in defined contribution and
defined benefit plans, primarily in the U.S. Benefits are dependent on years of service and the employee's compensation.
Supplemental retirement benefits provided to certain employees are nonqualified for U.S. tax purposes. Separate nonqualified
trusts have been established for certain U.S. nonqualified plan obligations. Pension costs under the Company's retirement plans
are actuarially determined.
Other Postretirement Obligations
Certain retired employees receive postretirement health care and life insurance benefits under plans sponsored by the Company,
which has the right to modify or terminate these plans at any time. The cost for coverage is shared between the Company and
the retiree. The cost of providing retiree health care and life insurance benefits is actuarially determined and accrued over the
service period of the active employee group. The Company's policy is to fund benefits as claims and premiums are paid. The
U.S. postretirement health care plan was closed to new participants effective January 1, 2006.
Defined Contribution Plans
The Company sponsors various defined contribution plans in North America, Europe and Asia covering certain employees.
Employees may contribute to these plans and the Company will match these contributions in varying amounts. The Company's
matching contribution to the defined contribution plans are based on specified percentages of employee contributions.
The amount of costs recognized for the Company's defined contribution plans are as follows:
Defined contribution plans ...........................................................................................
Year Ended December 31,
2022
2021
2020
(In $ millions)
47
62
39
90
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Summarized information on the Company's pension and postretirement benefit plans is as follows:
Pension Benefits
As of December 31,
Postretirement Benefits
As of December 31,
2022
2021
2022
2021
Change in Projected Benefit Obligation
Projected benefit obligation as of beginning of period ................
Service cost ..................................................................................
Interest cost ..................................................................................
Net actuarial (gain) loss(1)
............................................................
Acquisitions .................................................................................
Settlements ...................................................................................
Benefits paid ................................................................................
Exchange rate changes .................................................................
Projected benefit obligation as of end of period .....................
Change in Plan Assets
Fair value of plan assets as of beginning of period .....................
Actual return on plan assets .........................................................
Employer contributions ...............................................................
Acquisitions .................................................................................
Settlements ...................................................................................
Benefits paid(4)
.............................................................................
Exchange rate changes .................................................................
Fair value of plan assets as of end of period ................................
Funded status as of end of period ............................................
Amounts Recognized in the Consolidated Balance Sheets
Consist of:
Noncurrent Other assets ...............................................................
Current Other liabilities ...............................................................
Benefit obligations .......................................................................
Net amount recognized ...........................................................
Amounts Recognized in Accumulated Other Comprehensive
Income Consist of:
Net actuarial (gain) loss(5)
............................................................
Prior service (benefit) cost ...........................................................
Net amount recognized ...........................................................
3,488
12
67
(662)
198 (2)
—
(220)
(25)
2,858
3,183
(588)
45
211 (2)
—
(220)
(6)
2,625
(233)
160
(21)
(372)
(233)
13
—
13
______________________________
(1) Primarily relates to changes in discount rates.
(2) Represents plan obligations and assets related to the M&M acquisition.
(3) Represents plan obligations related to the Santoprene acquisition.
(In $ millions)
3,847
13
54
(119)
7 (3)
(38)
(226)
(50)
3,488
3,388
36
47
—
(38)
(226)
(24)
3,183
(305)
221
(22)
(504)
(305)
20
—
20
51
1
1
(10)
—
—
(3)
(2)
38
—
—
3
—
—
(3)
—
—
(38)
—
(3)
(35)
(38)
—
(1)
(1)
61
1
1
(7)
—
—
(4)
(1)
51
—
—
4
—
—
(4)
—
—
(51)
—
(4)
(47)
(51)
—
(1)
(1)
(4)
Includes benefit payments to nonqualified pension plans of $20 million and $21 million as of December 31, 2022 and
2021, respectively.
(5) Relates to the pension plans of the Company's equity method investments.
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The percentage of U.S. and international projected benefit obligation at the end of the period is as follows:
Pension Benefits
As of December 31,
Postretirement Benefits
As of December 31,
2022
2021
2022
2021
(In percentages)
U.S. plans ..............................................................................................
International plans .................................................................................
Total ..................................................................................................
73
27
100
78
22
100
50
50
100
50
50
100
The percentage of U.S. and international fair value of plan assets at the end of the period is as follows:
U.S. plans .............................................................................................................................................
International plans ...............................................................................................................................
Total ................................................................................................................................................
77
23
100
85
15
100
Pension plans with projected benefit obligations in excess of plan assets are as follows:
Pension Benefits
As of December 31,
2022
2021
(In percentages)
Projected benefit obligation .................................................................................................................
Fair value of plan assets .......................................................................................................................
Pension plans with accumulated benefit obligations in excess of plan assets are as follows:
Accumulated benefit obligation ...........................................................................................................
Fair value of plan assets .......................................................................................................................
As of December 31,
2022
2021
(In $ millions)
669
277
803
277
As of December 31,
2022
2021
(In $ millions)
649
270
781
277
Other postretirement plans with accumulated postretirement benefit obligations in excess of plan assets are as follows:
Accumulated postretirement benefit obligation ...................................................................................
38
52
As of December 31,
2022
2021
(In $ millions)
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The accumulated benefit obligation for all defined benefit pension plans is as follows:
Accumulated benefit obligation ...........................................................................................................
The components of net periodic benefit cost are as follows:
As of December 31,
2022
2021
(In $ millions)
2,837
3,461
Pension Benefits
Year Ended December 31,
Postretirement Benefits
Year Ended December 31,
2022
2021
2020
2022
2021
2020
Service cost .......................................................
Interest cost .......................................................
Expected return on plan assets ..........................
Recognized actuarial (gain) loss .......................
Curtailment (gain) loss ......................................
Settlement (gain) loss ........................................
Special termination benefit ...............................
Total ..............................................................
12
67
(166)
91
—
—
—
4
13
54
(205)
47
—
3
—
(88)
(In $ millions)
12
85
(199)
97
—
—
1
(4)
1
1
—
(10)
—
—
—
(8)
1
1
—
(6)
—
—
—
(4)
1
1
—
(1)
(1)
—
—
—
The Company maintains nonqualified pension plans funded with nonqualified trusts for certain U.S. employees as follows:
Nonqualified Trust Assets
Marketable securities ........................................................................................................................
Noncurrent Other assets, consisting of insurance contracts ..............................................................
Nonqualified Pension Obligations
Current Other liabilities ....................................................................................................................
Benefit obligations ............................................................................................................................
As of December 31,
2022
2021
(In $ millions)
5
22
18
152
10
28
19
204
(Income) expense relating to the nonqualified pension plans included in net periodic benefit cost, excluding returns on the
assets held by the nonqualified trusts, is as follows:
Total .............................................................................................................................
Year Ended December 31,
2022
2021
2020
(In $ millions)
3
(34)
23
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Valuation
The principal weighted average assumptions used to determine benefit obligation are as follows:
Pension Benefits
As of December 31,
Postretirement Benefits
As of December 31,
2022
2021
2022
2021
(In percentages)
Discount Rate Obligations
U.S. plans ...........................................................................................
International plans ..............................................................................
Combined .......................................................................................
Rate of Compensation Increase
U.S. plans ...........................................................................................
International plans ..............................................................................
Combined .......................................................................................
5.5
3.4
4.9
N/A
2.7
2.7
2.8
1.4
2.5
N/A
2.5
2.5
5.4
4.7
5.1
2.7
2.4
2.5
The principal weighted average assumptions used to determine net periodic benefit cost are as follows:
Pension Benefits
Year Ended December 31,
Postretirement Benefits
Year Ended December 31,
2022
2021
2020
2022
2021
2020
(In percentages)
2.7
2.4
2.5
3.5
2.1
2.1
2.0
2.1
2.1
2.2
1.9
2.1
N/A
1.9
1.9
1.5
1.5
1.5
3.1
2.7
2.9
3.8
2.7
2.7
2.6
2.5
2.6
Discount Rate Obligations
U.S. plans .......................................................
International plans ..........................................
Combined ...................................................
Discount Rate Service Cost
U.S. plans .......................................................
International plans ..........................................
Combined ...................................................
Discount Rate Interest Cost
U.S. plans .......................................................
International plans ..........................................
Combined ...................................................
Expected Return on Plan Assets
U.S. plans .......................................................
International plans ..........................................
Combined ...................................................
Rate of Compensation Increase
U.S. plans .......................................................
International plans ..........................................
Combined ...................................................
Interest Crediting Rate
U.S. plans .......................................................
International plans ..........................................
Combined ...................................................
3.2
1.4
2.8
1.9
1.8
1.8
2.8
1.1
2.4
6.7
5.1
6.5
N/A
2.6
2.6
2.1
N/A
2.1
2.4
1.0
2.1
N/A
1.1
1.1
1.7
0.7
1.4
6.5
4.8
6.3
N/A
2.5
2.5
1.4
1.0
1.4
2.8
1.4
2.5
N/A
1.5
1.5
2.2
1.2
2.0
5.5
4.9
5.4
N/A
2.5
2.5
1.9
1.0
1.9
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The Company's health care cost trend assumptions for U.S. postretirement medical plan's net periodic benefit cost are as
follows:
Health care cost trend rate assumed for next year ........................................................
Health care cost trend ultimate rate ..............................................................................
Health care cost trend ultimate rate year ......................................................................
Plan Assets
As of December 31,
2022
2021
2020
(In percentages, except year)
7.5
5.0
2032
7.3
5.0
2031
7.5
5.0
2031
The weighted average target asset allocations for the Company's pension plans in 2022 are as follows:
U.S.
Plans
International
Plans
(In percentages)
Bonds - domestic to plans ................................................................................................................
Equities - domestic to plans .............................................................................................................
Equities - international to plans .......................................................................................................
Other ................................................................................................................................................
Total ............................................................................................................................................
85
8
7
—
100
30
24
10
36
100
On average, the actual return on the U.S. qualified defined pension plans' assets over the long-term (20 years) has exceeded the
expected long-term rate of asset return assumption. The U.S. qualified defined benefit plans' actual return on assets for the year
ended December 31, 2022 was (19.5)% versus an expected long-term rate of asset return assumption of 5.5%. The expected
long-term rate of asset return assumption used to determine 2023 net periodic benefit cost is 5.5% for the U.S. qualified defined
benefit plans.
The Company's defined benefit plan assets are measured at fair value on a recurring basis (Note 2) as follows:
Cash and Cash Equivalents: Foreign and domestic currencies as well as short-term securities are valued at cost plus accrued
interest, which approximates fair value.
Equity securities, treasuries and corporate debt: Valued at the closing price reported on the active market in which the
individual securities are traded. Automated quotes are provided by multiple pricing services and validated by the plan
custodian. These securities are traded on exchanges as well as in the over the counter market.
Registered Investment Companies: Composed of various mutual funds and other investment companies whose diversified
portfolio is comprised of foreign and domestic equities, fixed income securities, and short-term investments. Investments are
valued at the net asset value of units held by the plan at year-end.
Pooled-type investments: Composed of various funds whose diversified portfolio is comprised of foreign and domestic equities,
fixed income securities, and short-term investments. Investments are valued at the net asset value of units held by the plan at
year-end.
Derivatives: Derivative financial instruments are valued in the market using discounted cash flow techniques. These techniques
incorporate Level 1 and Level 2 fair value measurement inputs such as interest rates and foreign currency exchange rates. These
market inputs are utilized in the discounted cash flow calculation considering the instrument's term, notional amount, discount
rate and credit risk. Significant inputs to the derivative valuation for interest rate swaps, foreign currency forwards and swaps,
and options are observable in the active markets and are classified as Level 2 in the fair value measurement hierarchy.
Mortgage backed securities: Fair value is estimated based on valuations obtained from third-party pricing services for identical
or comparable assets. Mortgage Backed Securities are traded in the over the counter broker/dealer market.
Insurance contracts: Valued at contributions made, plus earnings, less participant withdrawals and administrative expenses,
which approximates fair value.
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Table of Contents
Short-term investment funds: Composed of various funds whose portfolio is comprised of foreign and domestic currencies as
well as short-term securities. Investments are valued at the net asset value of units held by the plan at year-end.
Other: Composed of real estate investment trust common stock valued at closing price as reported on the active market in
which the individual securities are traded.
Fair Value Measurement
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
As of December 31,
Total
2022
2021
2022
2021
2022
2021
(In $ millions)
Assets
Cash and cash equivalents .......................................................................
Derivatives
Swaps .....................................................................................................
Equity securities
U.S. companies ......................................................................................
International companies .........................................................................
Fixed income
Corporate debt ........................................................................................
Treasuries, other debt .............................................................................
Mortgage backed securities ...................................................................
Insurance contracts ..................................................................................
Other ........................................................................................................
........................................................
Total investments, at fair value(1)
7
5
—
—
—
—
4
6
7
4
5
6
26
135
—
95
—
—
—
—
26
135
—
95
—
162
—
—
4
334
—
118
—
—
4
222
662
968
12
98
21
1,765
895
1,338
16
57
6
2,318
662
1,130
12
98
25
2,099
895
1,456
16
57
10
2,540
Liabilities
Derivatives
Swaps .....................................................................................................
Total liabilities ....................................................................................
.............................................................................
Total net assets(2)
—
—
334
—
—
222
4
4
1,761
6
6
2,312
4
4
2,095
6
6
2,534
______________________________
(1) Certain investments that are measured at fair value using the NAV per share practical expedient have not been classified in
the fair value hierarchy. Total investments, at fair value, for the year ended December 31, 2022 excludes investments in
pooled-type investments, registered investment companies and short-term investment funds with fair values of
$441 million, $41 million and $41 million, respectively. Total investments, at fair value, for the year ended
December 31, 2021 excludes investments in pooled-type investments, registered investment companies and short-term
investment funds with fair values of $538 million, $69 million and $37 million, respectively.
(2) Total net assets excludes non-financial plan receivables and payables of $17 million and $10 million, respectively, as of
December 31, 2022 and $13 million and $8 million, respectively, as of December 31, 2021. Non-financial items include
due to/from broker, interest receivables and accrued expenses.
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Benefit obligation funding is as follows:
Cash contributions to defined benefit pension plans ...................................................................................................
Benefit payments to nonqualified pension plans ........................................................................................................
Benefit payments to other postretirement benefit plans ..............................................................................................
Total
Expected
2023
(In $ millions)
27
18
4
The Company's estimates of its U.S. defined benefit pension plan contributions reflect the provisions of the Pension Protection
Act of 2006.
Pension and postretirement benefits expected to be paid are as follows:
2023 ....................................................................................................................................
2024 ....................................................................................................................................
2025 ....................................................................................................................................
2026 ....................................................................................................................................
2027 ....................................................................................................................................
2028-2032 ...........................................................................................................................
______________________________
(1) Payments are expected to be made primarily from plan assets.
(2) Payments are expected to be made primarily from Company assets.
13. Environmental
Pension
Benefit
Payments(1)
Company Portion
of Postretirement
Benefit Cost(2)
(In $ millions)
233
221
218
215
209
975
4
3
3
3
3
13
The Company is subject to environmental laws and regulations worldwide that impose limitations on the discharge of pollutants
into the air and water, establish standards for the treatment, storage and disposal of solid and hazardous wastes, and impose
record keeping and notification requirements. Failure to timely comply with these laws and regulations may expose the
Company to penalties. The Company believes that it is in substantial compliance with all applicable environmental laws and
regulations and engages in an ongoing process of updating its controls to mitigate compliance risks. The Company is also
subject to retained environmental obligations specified in various contractual agreements arising from the divestiture of certain
businesses by the Company or one of its predecessor companies.
The components of environmental remediation liabilities are as follows:
Demerger obligations (Note 19) ..........................................................................................................
Divestiture obligations (Note 19) ........................................................................................................
Active sites ...........................................................................................................................................
U.S. Superfund sites ............................................................................................................................
Other environmental remediation liabilities ........................................................................................
Total ................................................................................................................................................
20
14
21
10
2
67
24
14
8
12
2
60
As of December 31,
2022
2021
(In $ millions)
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Remediation
Due to its industrial history and through retained contractual and legal obligations, the Company has the obligation to remediate
specific areas on its own sites as well as on divested, demerger, orphan or U.S. Superfund sites (as defined below). In addition,
as part of the demerger agreement between the Company and Hoechst AG ("Hoechst"), a specified portion of the responsibility
for environmental liabilities from a number of Hoechst divestitures was transferred to the Company (Note 19). Certain of these
sites, at which the Company maintains continuing involvement, were and continue to be designated as discontinued operations
when closed. The Company provides for such obligations when the event of loss is probable and reasonably estimable. The
Company believes that environmental remediation costs will not have a material adverse effect on the financial position of the
Company, but may have a material adverse effect on the results of operations or cash flows in any given period.
The Company did not record any insurance recoveries during 2022 or have any receivables for insurance recoveries related to
these matters as of December 31, 2022.
German InfraServ Entities
The Company's InfraServ Entities (Note 7) are liable for any residual contamination and other pollution because they own the
real estate on which the individual facilities operate. In addition, Hoechst, and its legal successors, as the responsible party
under German public law, is liable to third parties for all environmental damage that occurred while it was still the owner of the
plants and real estate (Note 19). The contribution agreements entered into in 1997 between Hoechst and the respective operating
companies, as part of the divestiture of these companies, provide that the operating companies will indemnify Hoechst, and its
legal successors, against environmental liabilities resulting from the transferred businesses. Additionally, the InfraServ Entities
have agreed to indemnify Hoechst, and its legal successors, against any environmental liability arising out of or in connection
with environmental pollution of any site.
The InfraServ partnership agreements provide that, as between the partners, each partner is responsible for any contamination
caused predominantly by such partner. Any liability, which cannot be attributed to an InfraServ partner and for which no third
party is responsible, is required to be borne by the InfraServ partnership. Also, under lease agreements entered into by an
InfraServ partner as landlord, the tenants agreed to pay certain remediation costs on a pro rata basis.
If an InfraServ partner defaults on its respective indemnification obligations to eliminate residual contamination, the owners of
the remaining participation in the InfraServ companies have agreed to fund such liabilities, subject to a number of limitations.
To the extent that any liabilities are not satisfied by either the InfraServ Entities or their owners, these liabilities are to be borne
by the Company in accordance with the demerger agreement. However, Hoechst, and its legal successors, will reimburse the
Company for two-thirds of any such costs. Likewise, in certain circumstances the Company could be responsible for the
elimination of residual contamination on several sites that were not transferred to InfraServ companies, in which case Hoechst,
and its legal successors, must also reimburse the Company for two-thirds of any costs so incurred.
The Company's ownership interest and environmental liability participation percentages for such liabilities, which cannot be
attributed to an InfraServ partner are as follows:
InfraServ GmbH & Co. Gendorf KG ...........................................................................
InfraServ GmbH & Co. Hoechst KG ...........................................................................
Yncoris GmbH & Co. KG ............................................................................................
30
31
22
10
40
22
______________________________
(1) Gross reserves maintained by the respective entity.
Ownership
Liability
(In percentages)
Reserves(1)
(In $ millions)
9
64
1
As of December 31, 2022
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U.S. Superfund Sites
In the U.S., the Company may be subject to substantial claims brought by U.S. federal or state regulatory agencies or private
individuals pursuant to statutory authority or common law. In particular, the Company has a potential liability under the U.S.
Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and related state laws
(collectively referred to as "Superfund") for investigation and cleanup costs at certain sites. At most of these sites, numerous
companies, including the Company, or one of its predecessor companies, have been notified that the U.S. Environmental
Protection Agency ("EPA"), state governing bodies or private individuals consider such companies to be potentially responsible
parties ("PRP") under Superfund or related laws. The proceedings relating to these sites are in various stages. The cleanup
process has not been completed at most sites, and the status of the insurance coverage for some of these proceedings is
uncertain. Consequently, the Company cannot accurately determine its ultimate liability for investigation or cleanup costs at
these sites.
As events progress at each site for which it has been named a PRP, the Company accrues any probable and reasonably
estimable liabilities. In establishing these liabilities, the Company considers the contaminants of concern, the potential impact
thereof, the relationship of the contaminants of concern to its current and historic operations, its shipment of waste to a site, its
percentage of total waste shipped to the site, the types of wastes involved, the conclusions of any studies, the magnitude of any
remedial actions that may be necessary and the number and viability of other PRPs. Often the Company joins with other PRPs
to sign joint defense agreements that settle, among PRPs, each party's percentage allocation of costs at the site. Although the
ultimate liability may differ from the estimate, the Company routinely reviews the liabilities and revises the estimate, as
appropriate, based on the most current information available.
One such site is the Diamond Alkali Superfund Site, which is comprised of a number of sub-sites, including the Lower Passaic
River Study Area ("LPRSA"), which is the lower 17-mile stretch of the Passaic River ("Lower Passaic River Site"), and the
Newark Bay Area. The Company and 70 other companies are parties to a May 2007 Administrative Order on Consent with the
EPA to perform a Remedial Investigation/Feasibility Study ("RI/FS") at the Lower Passaic River Site in order to identify the
levels of contaminants and potential cleanup actions, including the potential migration of contaminants between the Lower
Passaic River Site and the Newark Bay Area.
In March 2016, the EPA issued its final Record of Decision concerning the remediation of the lower 8.3 miles of the Lower
Passaic River Site ("Lower 8.3 Miles"). Pursuant to the EPA's Record of Decision, the Lower 8.3 Miles must be dredged bank
to bank and an engineered cap must be installed at an EPA estimated cost of approximately $1.4 billion. In September 2021, the
EPA issued a Record of Decision selecting an interim remedial plan for the upper 9 miles of the Lower Passaic River ("Upper 9
Miles"). Pursuant to the EPA's Record of Decision, targeted dredging will be conducted in the Upper 9 Miles to address surface
sediments with elevated contamination followed by the installation of an engineered cap at an EPA estimated cost of
$441 million.
The Company owned and/or operated facilities in the vicinity of the Lower 8.3 Miles, but has found no evidence that it
contributed any of the contaminants of concern to the Passaic River. In June 2018, Occidental Chemical Corporation ("OCC"),
the successor to the Diamond Alkali Company, sued a subsidiary of the Company and 119 other parties alleging claims for joint
and several damages, contribution and declaratory relief under Section 107 and 113 of Superfund for costs to clean up the
LPRSA portion of the Diamond Alkali Superfund Site, Occidental Chemical Corporation v. 21st Century Fox America, Inc., et
al, No. 2:18-CV-11273-JLL-JAD (U.S. District Court New Jersey), alleging that each of the defendants owned or operated a
facility that contributed contamination to the LPRSA. With respect to the Company, the OCC lawsuit is limited to the former
Celanese facility that Essex County, New Jersey has agreed to indemnify the Company for and does not change the Company's
estimated liability for LPRSA cleanup costs.
Separately, the United States lodged a Consent Decree in U.S. District Court for the District of New Jersey on
December 16, 2022 that will resolve the Company's liability (and that of more than 80 other settling defendants) to the EPA for
costs to clean up both the Lower 8.3 Miles and Upper 9 Miles of the Lower Passaic River Site in exchange for a collective
payment of $150 million. The Consent Decree also will provide the Company protection from contribution claims by others for
costs incurred to clean up both the Lower 8.3 Miles and Upper 9 Miles of the Lower Passaic River Site. The Company's
proposed payment toward the $150 million collective settlement payment is not material to the Company's results of operations,
cash flows or financial position. The Consent Decree is still subject to public comment and court approval. In the interim, the
Company continues to vigorously defend these matters and continues to believe that its ultimate allocable share of the cleanup
costs with respect to the Lower Passaic River Site, previously estimated at less than 1%, will not be material.
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Other Environmental Matters
In April 2022, a methanol leak on a pipeline to our Bishop, Texas facility was discovered. The release has been contained, the
leak has been repaired and the pipeline has resumed operation. The Company promptly disclosed the incident to state and
federal authorities, including the Texas Commission on Environmental Quality and the EPA, and remediation activities are now
completed. While the Company has not received a notice of violation nor been assessed any fines or penalties to date, the
Company recorded a reserve in Current Other liabilities based on anticipated clean-up costs and possible penalties to state or
federal authorities. The Company does not believe that resolution of this matter will have a material impact on our financial
condition or results of operations.
14. Shareholders' Equity
Common Stock
The Company's Board of Directors follows a policy of declaring, subject to legally available funds, a quarterly cash dividend on
each share of the Company's common stock, par value $0.0001 per share ("Common Stock"), unless the Company's Board of
Directors, in its sole discretion, determines otherwise. The amount available to the Company to pay cash dividends is not
currently restricted by its existing senior credit facility and its indentures governing its senior unsecured notes. Any decision to
declare and pay dividends in the future will be made at the discretion of the Company's Board of Directors and will depend on,
among other things, the results of operations, cash requirements, financial condition, contractual restrictions and other factors
that the Company's Board of Directors may deem relevant.
On February 8, 2023, the Company declared a quarterly cash dividend of $0.70 per share on its Common Stock amounting to
approximately $76 million. The cash dividend will be paid on March 7, 2023 to holders of record as of February 21, 2023.
Treasury Stock
The Company's Board of Directors authorizes repurchases of Common Stock from time to time. These authorizations give
management discretion in determining the timing and conditions under which shares may be repurchased. This repurchase
program does not have an expiration date.
The share repurchase activity pursuant to this authorization is as follows:
Shares repurchased ............................................................................
Average purchase price per share ...................................................... $
Amount spent on repurchased shares (in millions) ........................... $
Aggregate Board of Directors repurchase authorizations during the
period (in millions) .......................................................................... $
2022
Year Ended December 31,
2021
6,556,378
2020
5,889,073
—
— $ 152.53 $ 110.41 $
650 $
— $
1,000 $
Total From
February 2008
Through
December 31, 2022
69,324,429
83.71
5,803
— $
1,000 $
500 $
6,866
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.
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Other Comprehensive Income (Loss), Net
Year Ended December 31,
2022
Income
Tax
(Provision)
Benefit
Gross
Amount
Net
Amount
Gross
Amount
2021
Income
Tax
(Provision)
Benefit
(In $ millions)
2020
Income
Tax
(Provision)
Benefit
Net
Amount
Net
Amount
Gross
Amount
Foreign currency
translation ......................
Gain (loss) on cash flow
hedges ...........................
Pension and
postretirement benefits ..
Total ...........................
(240)
23
(217)
26
(5)
21
20
34
(31)
(11)
(4)
(4)
(8)
(21)
13
(26)
7
(207)
—
18
7
(189)
(3)
51
—
(52)
(3)
(1)
(2)
(32)
8
—
4
(18)
(2)
(28)
Adjustments to Accumulated other comprehensive income (loss), net, are as follows:
Foreign
Currency
Translation
Gain (Loss)
Gain (Loss)
on Cash Flow
Hedges
(Note 17)
Pension and
Postretirement
Benefits Gain
(Loss)
(Note 12)
Accumulated
Other
Comprehensive
Income
(Loss), Net
(252)
(4)
—
(4)
(260)
20
(31)
(271)
(240)
—
23
(488)
(In $ millions)
(38)
(28)
2
8
(56)
34
(21)
(43)
43
(17)
(5)
(22)
(10)
(2)
—
—
(12)
(3)
—
(15)
7
—
—
(8)
(300)
(34)
2
4
(328)
51
(52)
(329)
(190)
(17)
18
(518)
As of December 31, 2019 ......................................................
Other comprehensive income (loss) before
reclassifications ...................................................................
Amounts reclassified from accumulated other
comprehensive income (loss) ..............................................
Income tax (provision) benefit ..............................................
As of December 31, 2020 ...................................................
Other comprehensive income (loss) before
reclassifications .................................................................
Income tax (provision) benefit ............................................
As of December 31, 2021 .................................................
Other comprehensive income (loss) before
reclassifications ..............................................................
Amounts reclassified from accumulated other
comprehensive income (loss) .........................................
Income tax (provision) benefit .........................................
As of December 31, 2022 ............................................
15. Income Taxes
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 final and proposed regulatory packages supplementing the TCJA provisions since 2018. In December 2021,
the U.S. Treasury issued final foreign tax credit regulations clarifying certain items in the TCJA and prior guidance related to
disallowance of foreign income taxes related to income exempt from U.S. taxation, treatment of debt between foreign affiliates
for expense apportionment purpose, allocation and apportionment of foreign income taxes and the definition of creditable
foreign income taxes. The regulations were published in the federal register on January 4, 2022 and became effective in the
three months ended March 31, 2022. In November 2022, the U.S. Treasury released proposed foreign tax credit regulations
addressing the eligibility of foreign taxes for credit by clarifying the cost recovery requirements, attribution requirements for
withholding taxes on royalties and attribution definitions regarding allocation and apportionment of foreign taxes. The
Company does not expect the final or the proposed regulations to have a material impact to current or future income tax
expense.
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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 that regular tax liability exceeds the minimum tax in any given year. The Company does
not expect these provisions will have a material impact to future income tax expense. The IRA also provides various beneficial
credits for energy efficient related 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.
Income Tax Provision
Earnings (loss) from continuing operations before tax by jurisdiction are as follows:
U.S. ...............................................................................................................................
International .................................................................................................................
Total .........................................................................................................................
The income tax provision (benefit) consists of the following:
Year Ended December 31,
2022
2021
2020
(In $ millions)
202
2,046
2,248
(292)
1,713
1,421
1,530
721
2,251
Year Ended December 31,
2022
2021
2020
(In $ millions)
Current
U.S. ............................................................................................................................
International ...............................................................................................................
Total .........................................................................................................................
Deferred
U.S. ............................................................................................................................
International ...............................................................................................................
Total .........................................................................................................................
Total ....................................................................................................................
54
306
360
(261)
(588)
(849)
(489)
—
323
323
(16)
23
7
330
13
126
139
308
(200)
108
247
102
Table of Contents
A reconciliation of the significant differences between the U.S. federal statutory tax rate of 21% and the effective income tax
rate on income from continuing operations is as follows:
Year Ended December 31,
2022
2021
2020
Income tax provision computed at U.S. federal statutory tax rate ...............................
Change in valuation allowance .....................................................................................
Equity income and dividends .......................................................................................
(Income) expense not resulting in tax impact, net ........................................................
U.S. tax effect of foreign earnings and dividends ........................................................
Foreign tax credits ........................................................................................................
Other foreign tax rate differentials ...............................................................................
Legislative changes ......................................................................................................
State income taxes, net of federal benefit .....................................................................
Recognition of basis differences in investments in affiliates .......................................
Asset transfers between wholly owned foreign affiliates .............................................
Other, net ......................................................................................................................
Income tax provision (benefit) .................................................................................
(In $ millions, except percentages)
298
(15)
(47)
2
162
(120)
(43)
—
(2)
6
(816)
86
(489)
472
(50)
(29)
(53)
332
(328)
(66)
(8)
6
—
—
54
330
473
(1)
(54)
(46)
65
(51)
7
1
4
(14)
(170)
33
247
Effective income tax rate ..............................................................................................
(34) %
15 %
11 %
In December 2022, as part of its integration efforts for the M&M Acquisition (see Note 4) and to simplify future cash flows for
purposes of acquisition debt repayment, the Company reorganized its foreign legal entity holding structure and relocated certain
of its intangible assets to align with the acquired M&M foreign operations. The transfer of these assets between wholly owned
foreign affiliates, generated a net deferred tax benefit of approximately $800 million.
Included in the Other, net line in the effective income tax rate reconciliation above are charges of approximately $20 million
related to transaction costs for the M&M Acquisition for the year ended December 31, 2022, and $63 million, $65 million and
$40 million related to changes in uncertain tax positions for the years ended December 31, 2022, 2021 and 2020, respectively,
and impacts of amended tax return filings.
In October 2020, the Company completed the sale of its 45% joint venture equity interest in Polyplastics (see Note 7). The tax
gain on this disposal was less than the related gain for financial reporting purposes due to basis differences. In November 2020,
the Company relocated certain tangible and intangible assets in response to various geopolitical risks in certain regions in which
it operates. The transfer of these assets between wholly owned foreign affiliates in this reorganization generated a deferred tax
benefit of approximately $170 million.
103
Table of Contents
Deferred Income Taxes
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes. Significant components of the consolidated
deferred tax assets and liabilities are as follows:
Deferred Tax Assets
Pension and postretirement obligations ............................................................................................
Accrued expenses ..............................................................................................................................
Inventory ...........................................................................................................................................
Net operating loss carryforwards ......................................................................................................
Tax credit carryforwards ...................................................................................................................
Other .................................................................................................................................................
Subtotal ...........................................................................................................................................
.................................................................................................................
Total .........................................................................................................................................
Valuation allowance(1)
Deferred Tax Liabilities
Depreciation and amortization ..........................................................................................................
Investments in affiliates ....................................................................................................................
Other .................................................................................................................................................
Total .........................................................................................................................................
Net deferred tax assets (liabilities) .....................................................................................
______________________________
As of December 31,
2022
2021
(In $ millions)
61
80
(11)
528
359
400
1,417
(781)
636
743
171
156
1,070
(434)
96
31
7
526
207
226
1,093
(642)
451
312
382
64
758
(307)
(1)
Includes deferred tax asset valuation allowances for the Company's deferred tax assets in the U.S., Spain, Luxembourg, the
United Kingdom, Mexico, Hong Kong, France, China, Singapore, Canada and Germany. These valuation allowances relate
primarily to net operating loss carryforward benefits, foreign tax credit carryforwards and other net deferred tax assets, all
of which may not be realizable.
As a result of the TCJA, U.S. federal and state income taxes have been recorded on undistributed foreign earnings accumulated
from 1986 through 2017. The Company's previously taxed income for its foreign subsidiaries significantly exceeds its offshore
cash balances. The Company has not recorded a deferred tax liability for foreign withholding or other foreign local tax that
would be due when cash is actually repatriated to the U.S. because those foreign earnings are considered permanently
reinvested in the business or may be remitted substantially free of any additional local taxes. The determination of the amount
of the unrecognized deferred tax liability related to the undistributed earnings is not practicable.
Tax Carryforwards
•
Net Operating Loss and Capital Loss Carryforwards
As of December 31, 2022, the Company had available U.S. federal net operating loss carryforwards of $22 million that are
subject to limitation. These net operating loss carryforwards begin to expire in 2025. As of December 31, 2022, the Company
also had available state net operating loss carryforwards, net of federal tax impact, of $32 million, $24 million of which are
offset by a valuation allowance due to uncertain recoverability. The Company also has foreign net operating loss carryforwards
available as of December 31, 2022 of $3.0 billion primarily for Malta, Luxembourg, Spain, the United Kingdom, Singapore,
Switzerland, Hong Kong and China with various expiration dates. Net operating loss carryforwards of $34 million in China are
scheduled to expire beginning in 2023 through 2027. Net operating losses in most other foreign jurisdictions do not have an
expiration date. The Company acquired capital loss carryforwards of $173 million as part of the M&M Acquisition (Note 4)
that are subject to annual limitation due to the ownership change. The Company fully offset these capital loss carryforwards
with a valuation allowance due to uncertain recoverability.
104
Table of Contents
•
Tax Credit Carryforwards
The Company had available $337 million of foreign tax credit carryforwards, which are offset by a valuation allowance of
$298 million due to uncertain recoverability and $18 million of alternative minimum tax credit carryforwards in the U.S. The
foreign tax credit carryforwards are subject to a ten-year carryforward period and begin to expire in 2027. The alternative
minimum tax credits are subject to annual limitation due to prior ownership changes but have an unlimited carryforward period
and can be used to offset federal tax liability in future years.
The Company evaluates its deferred tax assets on a quarterly basis to determine whether a valuation allowance is necessary.
Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character
in the applicable carryback or carryforward periods. Changes in the Company's estimates of future taxable income and prudent
and feasible tax planning strategies will affect the estimate of the realization of the tax benefits of these foreign tax credit
carryforwards. As such, the Company is currently evaluating tax planning strategies to enable use of the foreign tax credit
carryforwards that may decrease the Company's effective tax rate in future periods as the valuation allowance is reversed.
Uncertain Tax Positions
Activity related to uncertain tax positions is as follows:
Year Ended December 31,
2022
2021
2020
As of the beginning of the year ....................................................................................
Increases in tax positions for the current year ..............................................................
Increases in tax positions for prior years ......................................................................
Decreases in tax positions for prior years ....................................................................
Increases (decreases) due to settlements ......................................................................
As of the end of the year ..........................................................................................
Total uncertain tax positions that if recognized would impact the effective tax rate ...
Total amount of interest expense (benefit) and penalties recognized in the
consolidated statements of operations(1)
...................................................................
Total amount of interest expense and penalties recognized in the consolidated
balance sheets ...........................................................................................................
218
8
102
(45)
(8)
(In $ millions)
165
33
28
(11)
3
218
275
274
10
59
224
2
52
134
18
26
(13)
—
165
182
6
54
______________________________
(1) This amount reflects interest on uncertain tax positions and release of tax positions due to changes in assessment, statute
lapses or audit closures that were reflected in the consolidated statements of operations.
The increase in uncertain tax positions for the year ended December 31, 2022 was primarily due to increases in foreign tax
positions related to ongoing tax examinations.
The Company's tax returns have been under joint audit for the years 2013 through 2015 by the United States, Netherlands and
Germany (the "Authorities"). In September 2021, the Company received a draft joint audit report proposing adjustments to
transfer pricing and the reallocation of income between the related jurisdictions. The Authorities also proposed to apply these
adjustments to open tax years through 2019. The Company and the Authorities were unable to reach an agreement jointly and
therefore the audits continued on a separate jurisdictional basis. In the last quarter of 2022, the Company concluded settlement
discussions with the Dutch tax authorities. Based on these discussions, the Company recorded total tax reserves of $34 million
related to the joint audit for years prior to 2022. The Company is engaged in continuing discussions with the other Authorities
and is currently evaluating all additional potential remedies regarding the ongoing examinations.
As of December 31, 2022, the Company believes that an adequate provision for income taxes has been made for all open tax
years related to the examinations by the Authorities. However, the outcome of tax audits cannot be predicted with certainty. If
any issues raised by the Authorities are resolved in a manner inconsistent with the Company's expectations or the Company is
unsuccessful in defending its position, the Company could be required to adjust its 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.
105
Table of Contents
In addition, the Company's income tax returns in Mexico are under audit for the years 2017 and 2018, and in Canada for the
years 2016 through 2018. On January 14, 2022, the Mexico tax authorities issued preliminary findings for disallowance of
operating expenses on several of the applicable tax returns. The Company has analyzed the preliminary findings, engaged in
preliminary discussions with the Mexico tax authorities and has recorded the appropriate tax reserves as of December 31, 2022.
The Company will continue discussions with the Mexico authorities in 2023. Related to Canada, the Company is discussing
preliminary findings with the Canadian authorities and does not expect a material impact to income tax expense.
16. Leases
The components of lease expense are as follows:
Year Ended December 31,
2022
2021
Statement of Operations Classification
(In $ millions)
Lease Cost
Operating lease cost .........................................................
Short-term lease cost .......................................................
Variable lease cost ...........................................................
Finance lease cost
Amortization of leased assets ........................................
Interest on lease liabilities ..............................................
Sublease income ............................................................
Total net lease cost ......................................................
66
19
15
19
11
2
132
Cost of sales / Selling, general and
administrative expenses
Cost of sales / Selling, general and
administrative expenses
Cost of sales / Selling, general and
administrative expenses
Cost of sales
Interest expense
Other income (expense), net
40
18
12
19
13
—
102
Supplemental consolidated balance sheet information related to leases is as follows:
Leases
Assets
Operating lease assets ....................................................
Finance lease assets .......................................................
Total leased assets .......................................................
Liabilities
Current
Operating .....................................................................
Finance ........................................................................
Noncurrent
Operating .....................................................................
Finance ........................................................................
Total lease liabilities .................................................
As of December 31,
2022
2021
(In $ millions)
Balance Sheet Classification
413
176
589
83
25
364
147
619
Operating lease ROU assets
Property, plant and equipment, net
236
131
367
37
25
Current Other liabilities
Short-term borrowings and current
installments of long-term debt
Operating lease liabilities
Long-term debt
200
148
410
106
Table of Contents
As of December 31,
2022
2021
Weighted-Average Remaining Lease Term (years)
Operating leases ................................................................................................................................
Finance leases ....................................................................................................................................
9.0
8.3
12.8
8.9
Weighted-Average Discount Rate
Operating leases ................................................................................................................................
Finance leases ....................................................................................................................................
3.0 %
6.4 %
2.0 %
6.9 %
Supplemental consolidated cash flow information related to leases is as follows:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases ......................................................................................
Operating cash flows from finance leases .........................................................................................
Financing cash flows from finance leases .........................................................................................
ROU assets obtained in exchange for finance lease liabilities (Note 20) ............................................
ROU assets obtained in exchange for operating lease liabilities .........................................................
Maturities of lease liabilities are as follows:
Year Ended December 31,
2022
2021
(In $ millions)
52
11
25
28
93
37
13
29
—
52
2023 .............................................................................................................................
2024 .............................................................................................................................
2025 .............................................................................................................................
2026 .............................................................................................................................
2027 .............................................................................................................................
Later years ...................................................................................................................
Total lease payments ....................................................................................................
Less amounts representing interest ..............................................................................
Total lease obligations .............................................................................................
As of December 31, 2022
Operating Leases
Finance Leases
(In $ millions)
97
87
74
60
30
162
510
(63)
447
34
31
27
26
22
91
231
(59)
172
17. Derivative Financial Instruments
Derivatives Designated As Hedges
Net Investment Hedges
The total notional amount of foreign currency denominated debt designated as a net investment hedge of net investments in
foreign operations are as follows:
Total .....................................................................................................................................................
As of December 31,
2022
2021
(In € millions)
5,639
1,653
107
Table of Contents
Concurrently with the offering of the Acquisition USD Notes (Note 11), the Company entered into cross-currency swaps to
effectively convert $2.0 billion and $500 million of the Acquisition USD Notes into a euro-denominated borrowing at
prevailing euro interest rates, maturing on July 15, 2027 and July 15, 2032, respectively. The swaps and €1.5 billion of the
Acquisition Euro Notes qualify and have been designated as net investment hedges of the Company's foreign currency
exchange rate exposure on the net investments of certain of its euro-denominated subsidiaries.
Derivatives Not Designated As Hedges
Foreign Currency Forwards and Swaps
Each of the contracts included in the table below will have approximately offsetting effects from actual underlying payables,
receivables, intercompany loans or other assets or liabilities subject to foreign exchange remeasurement. The total U.S. dollar
equivalents of net foreign exchange exposure related to (short) long foreign exchange forward contracts outstanding by
currency are as follows:
Currency
Brazilian real ........................................................................................................................................................
British pound sterling ...........................................................................................................................................
Canadian dollar ....................................................................................................................................................
Chinese yuan ........................................................................................................................................................
Danish krona ........................................................................................................................................................
Euro ......................................................................................................................................................................
Hungarian forint ...................................................................................................................................................
Indonesian rupiah .................................................................................................................................................
Japanese yen .........................................................................................................................................................
Korean won ..........................................................................................................................................................
Mexican peso .......................................................................................................................................................
Singapore dollar ...................................................................................................................................................
Swedish krona ......................................................................................................................................................
Swiss franc ...........................................................................................................................................................
Total .................................................................................................................................................................
Gross notional values of the foreign currency forwards and swaps are as follows:
2023 Maturity
(In $ millions)
(37)
8
43
232
(4)
79
14
(6)
(38)
75
93
(56)
(7)
6
402
Total .....................................................................................................................................................
Hedging activity for foreign currency forwards, commodity swaps and interest rate swaps is as follows:
As of December 31,
2022
2021
(In $ millions)
1,314
663
Hedging activities ...............................................
Year Ended December 31,
2022
2021
2020
Statement of Operations
Classification
(In $ millions)
—
17
(5) Cost of sales; Interest expense
108
Table of Contents
Information regarding changes in the fair value of the Company's derivative and non-derivative instruments is as follows:
Gain (Loss)
Recognized in Other
Comprehensive
Income (Loss)
Gain (Loss) Recognized
in Earnings (Loss)
Year Ended December 31, Year Ended December 31,
2022
2021
2020
2022
2021
2020
Statement of Operations
Classification
(In $ millions)
Designated as Cash Flow
Hedges
Commodity swaps .......................
Interest rate swaps .......................
Foreign currency forwards ..........
Total ..........................................
39
—
2
41
25
10
(1)
34
13
(41)
(1)
(29)
Designated as Net Investment
Hedges
Foreign currency denominated
23
(7)
1
17
3
(3) —
(4) Cost of sales
Interest expense
—
—
(1) Cost of sales
(5)
debt (Note 11) ..........................
Cross-currency swaps (Note 11) ..
Total ..........................................
(22) 107
27
(92)
(114) 134
(81) —
(26) —
(107) —
—
—
—
— N/A
— N/A
—
Not Designated as Hedges
Foreign currency forwards and
swaps ........................................
Total ..........................................
—
—
—
—
—
—
(2)
(2)
(13)
(13)
(8)
(8)
Foreign exchange gain (loss), net;
Other income (expense), net
See Note 18 for additional information regarding the fair value of the Company's derivative instruments.
Certain of the Company's commodity swaps, interest rate swaps, cross-currency swaps and foreign currency forwards and
swaps permit the Company to net settle all contracts with the counterparty through a single payment in an agreed upon currency
in the event of default or early termination of the contract, similar to a master netting arrangement.
Information regarding the gross amounts of the Company's derivative instruments and the amounts offset in the consolidated
balance sheets is as follows:
Derivative Assets
Gross amount recognized ..................................................................................................................
Gross amount offset in the consolidated balance sheets ...................................................................
Net amount presented in the consolidated balance sheets ............................................................
Gross amount not offset in the consolidated balance sheets .............................................................
Net amount .................................................................................................................................
169
—
169
16
153
40
—
40
2
38
As of December 31,
2022
2021
(In $ millions)
109
Table of Contents
Derivative Liabilities
As of December 31,
2022
2021
(In $ millions)
Gross amount recognized ..................................................................................................................
Gross amount offset in the consolidated balance sheets ...................................................................
Net amount presented in the consolidated balance sheets ............................................................
Gross amount not offset in the consolidated balance sheets .............................................................
Net amount .................................................................................................................................
189
—
189
16
173
5
—
5
2
3
18. Fair Value Measurements
The Company's financial assets and liabilities are measured at fair value on a recurring basis (Note 2) as follows:
Derivatives. Derivative financial instruments include interest rate swaps, commodity swaps, cross-currency swaps and foreign
currency forwards and swaps and are valued in the market using discounted cash flow techniques. These techniques incorporate
Level 1 and Level 2 fair value measurement inputs such as interest rates and foreign currency exchange rates. These market
inputs are utilized in the discounted cash flow calculation considering the instrument's term, notional amount, discount rate and
credit risk. Significant inputs to the derivative valuation for interest rate swaps, commodity swaps, cross-currency swaps and
foreign currency forwards and swaps are observable in the active markets and are classified as Level 2 in the fair value
measurement hierarchy.
Fair Value Measurement
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
As of December 31,
Total
2022
2021
2022
2021
2022
2021
Balance Sheet Classification
(In $ millions)
Derivatives Designated as Cash Flow
Hedges
Commodity swaps .....................................
—
—
Commodity swaps .....................................
—
—
Derivatives Designated as Net
Investment Hedges
Cross-currency swaps ...............................
—
—
Cross-currency swaps ...............................
—
—
9
39
99
13
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps ......
—
—
9
8
23
2
5
2
9
39
99
13
8 Current Other assets
23 Noncurrent Other assets
2 Current Other assets
5 Noncurrent Other assets
9
2 Current Other assets
Total assets ...........................................
—
—
169
40
169
40
Derivatives Designated as Cash Flow
Hedges
Commodity swaps .....................................
—
—
(2) —
(2) — Current Other liabilities
Derivatives Designated as Net
Investment Hedges
Cross-currency swaps ...............................
—
—
(58)
(2)
(58)
(2) Current Other liabilities
Cross-currency swaps ...............................
—
—
(126) —
(126) — Noncurrent Other liabilities
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps ......
—
—
(3)
(3)
(3)
(3) Current Other liabilities
Total liabilities ......................................
—
—
(189)
(5) (189)
(5)
110
Table of Contents
Carrying values and fair values of financial instruments that are not carried at fair value are as follows:
Fair Value Measurement
Significant
Other
Observable
Inputs
(Level 2)
Carrying
Amount
Unobservable
Inputs
(Level 3)
Total
As of December 31,
2022
2021
2022
2021
2022
2021
2022
2021
(In $ millions)
170
170
—
—
—
—
—
—
22
28
23
28
—
—
23
28
Equity investments without readily determinable fair
values .........................................................................
Insurance contracts in nonqualified trusts .....................
Long-term debt, including current installments of
long-term debt ...........................................................
13,953
3,722
13,247
3,639
172
173
13,419
3,812
In general, the equity investments included in the table above are not publicly traded and their fair values are not readily
determinable. The Company believes the carrying values approximate fair value. Insurance contracts in nonqualified trusts
consist of long-term fixed income securities, which are valued using independent vendor pricing models with observable inputs
in the active market and therefore represent a Level 2 fair value measurement. The fair value of long-term debt is based on
valuations from third-party banks and market quotations and is classified as Level 2 in the fair value measurement hierarchy.
The fair value of obligations under finance leases, which are included in long-term debt, is based on lease payments and
discount rates, which are not observable in the market and therefore represents a Level 3 fair value measurement.
As of December 31, 2022 and 2021, the fair values of cash and cash equivalents, receivables, marketable securities, trade
payables, short-term borrowings and the current installments of long-term debt approximate carrying values due to the short-
term nature of these instruments. These items have been excluded from the table with the exception of the current installments
of long-term debt.
19. Commitments and Contingencies
Commitments
Guarantees
Equity Affiliates
The Company has directly guaranteed various debt obligations under agreements with third parties related to certain equity
affiliates. At December 31, 2022, the Company had directly guaranteed $142 million and €27 million of such obligations. These
amounts represent the maximum potential amount of future (undiscounted) payments that the Company could be required to
make under the guarantees. The Company would be required to perform on these guarantees in the event of default by the
guaranteed party.
Maximum future payments under these obligations are $142 million and €27 million for bank borrowings and the guarantee
will remain in force until all guaranteed obligations are paid and the underlying debt agreements entered into by certain equity
affiliates are terminated.
Environmental and Other Liabilities
The Company has agreed to guarantee or indemnify third parties for environmental and other liabilities pursuant to a variety of
agreements, including asset and business divestiture agreements, leases, settlement agreements and various agreements with
affiliated companies. Although many of these obligations contain monetary and/or time limitations, others do not provide such
limitations.
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The Company has accrued for all probable and reasonably estimable losses associated with all known matters or claims. These
known obligations include the following:
•
Demerger Obligations
In connection with the Hoechst demerger, the Company agreed to indemnify Hoechst, and its legal successors, for various
liabilities under the demerger agreement, including for environmental liabilities associated with contamination arising either
from environmental damage in general ("Category A") or under 19 divestiture agreements entered into by Hoechst prior to the
demerger ("Category B") (Note 13).
The Company's obligation to indemnify Hoechst, and its legal successors, is capped under Category B at €250 million. If and to
the extent the environmental damage should exceed €750 million in aggregate, the Company's obligation to indemnify Hoechst
and its legal successors applies, but is then limited to 33.33% of the remediation cost without further limitations. Cumulative
payments under the divestiture agreements as of December 31, 2022 are $107 million. Though the Company is significantly
under its obligation cap under Category B, most of the divestiture agreements have become time barred and/or any notified
environmental damage claims have been partially settled.
The Company has also undertaken in the demerger agreement to indemnify Hoechst and its legal successors for (i) 33.33% of
any and all Category A liabilities that result from Hoechst being held as the responsible party pursuant to public law or current
or future environmental law or by third parties pursuant to private or public law related to contamination and (ii) liabilities that
Hoechst is required to discharge, including tax liabilities, which are associated with businesses that were included in the
demerger but were not demerged due to legal restrictions on the transfers of such items. These indemnities do not provide for
any monetary or time limitations. The Company has not been requested by Hoechst to make any payments in connection with
this indemnification. Accordingly, the Company has not made any payments to Hoechst and its legal successors.
Based on the Company's evaluation of currently available information, including the lack of requests for indemnification, the
Company cannot estimate the remaining demerger obligations, if any, in excess of amounts accrued.
•
Divestiture Obligations
The Company and its predecessor companies agreed to indemnify third-party purchasers of former businesses and assets for
various pre-closing conditions, as well as for breaches of representations, warranties and covenants. Such liabilities also include
environmental liability, product liability, antitrust and other liabilities. These indemnifications and guarantees represent
standard contractual terms associated with typical divestiture agreements and, other than environmental liabilities, the Company
does not believe that they expose the Company to significant risk (Note 13).
The Company has divested numerous businesses, investments and facilities through agreements containing indemnifications or
guarantees to the purchasers. Many of the obligations contain monetary and/or time limitations, which extend through 2037.
The aggregate amount of outstanding indemnifications and guarantees provided for under these agreements is $125 million as
of December 31, 2022. Other agreements do not provide for any monetary or time limitations.
Based on the Company's evaluation of currently available information, including the number of requests for indemnification or
other payment received by the Company, the Company cannot estimate the remaining divestiture obligations, if any, in excess
of amounts accrued.
Purchase Obligations
In the normal course of business, the Company enters into various purchase commitments for goods and services. The
Company maintains a number of "take-or-pay" contracts for purchases of raw materials, utilities and other services. Certain of
the contracts contain a contract termination buy-out provision that allows for the Company to exit the contracts for amounts less
than the remaining take-or-pay obligations. Additionally, the Company has other outstanding commitments representing
maintenance and service agreements, energy and utility agreements, consulting contracts and software agreements. As of
December 31, 2022, the Company had unconditional purchase obligations of $4.3 billion, of which $721 million will be paid in
2023, $656 million in 2024, $538 million in 2025, $411 million in 2026, $333 million in 2027 and the balance thereafter
through 2042.
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Contingencies
The Company is involved in legal and regulatory proceedings, lawsuits, claims and investigations incidental to the normal
conduct of business, relating to such matters as product liability, land disputes, insurance coverage disputes, contracts,
employment, antitrust or competition compliance, 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 the Company is named as a defendant and, based on the current facts, does not believe the
outcomes from these matters would be material to the Company's results of operations, cash flows or financial position.
European Commission Investigation
In May 2017, the Company learned that the European Commission had opened a competition law investigation involving
certain subsidiaries of the Company with respect to certain past ethylene purchases. Based on information learned from the
European Commission regarding its investigation, Celanese recorded a reserve of $89 million in 2019, which was included
within the Company's Other Activities segment. In July 2020, Celanese reached a final settlement with the European
Commission in respect of this matter of $92 million, which was included in Current Other liabilities as of December 31, 2020.
The Company paid this settlement in full in January 2021.
20. Supplemental Cash Flow Information
Interest paid, net of amounts capitalized ......................................................................
Taxes paid, net of refunds ............................................................................................
Noncash Investing and Financing Activities
Accrued treasury stock repurchases ...........................................................................
Finance lease obligations (Note 16) ...........................................................................
Accrued capital expenditures .....................................................................................
21. Segment Information
Business Segments
Year Ended December 31,
2022
2021
2020
(In $ millions)
105
215
122
273
(17)
28
40
—
—
23
120
167
—
78
(16)
The Company operates through business segments according to the nature and economic characteristics of its products and
customer relationships, as well as the manner in which the information is used internally by the Company's key decision maker,
who is the Company's Chief Executive Officer.
Effective December 31, 2022, the Company reorganized its operating and reportable segments to align with recent structural
and management reporting changes. The change reflects the resegmentation of the former Acetate Tow operating and reportable
segment into the Acetyl Chain operating and reportable segment. This reorganization reflects the culmination of a shift in
operating strategy and organizational hierarchy, with a focus on integration, collaboration and maximization of value creation
through its global optionality and integrated chain model of the underlying businesses. The historical segment information has
been recast to conform with the reorganized segments.
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The Company's business segments are as follows:
•
Engineered Materials
The Company's Engineered Materials segment includes the engineered materials business, food ingredients business and certain
strategic affiliates. The 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 its strategic affiliates, the Company's engineered materials business is a leading participant in the global specialty polymers
industry. The primary products of Engineered Materials are used in a broad range of end-use products including fuel system
components, automotive safety systems, medical applications, electronics, appliances, industrial products, battery separators,
conveyor belts, filtration equipment, coatings, and electrical applications and products. It is also a leading global supplier of
acesulfame potassium for the food and beverage industry and is a leading producer of food protection ingredients, such as
potassium sorbate and sorbic acid.
•
Acetyl Chain
The Company's Acetyl Chain segment includes the integrated chain of intermediate chemistry, emulsion polymers, ethylene
vinyl acetate ("EVA") polymers, redispersible powders ("RDP"), and acetate tow businesses. The Company's intermediate
chemistry business produces and supplies acetyl products, including acetic acid, vinyl acetate monomer, acetic anhydride and
acetate esters. These products are generally used as starting materials for colorants, paints, adhesives, coatings and
pharmaceuticals. It also produces organic solvents and intermediates for pharmaceutical, agricultural and chemical products.
The Company's emulsion polymers business is a leading global producer of vinyl acetate-based emulsions and develops
products and application technologies to improve performance, create value and drive innovation in applications such as paints
and coatings, adhesives, construction, glass fiber, textiles and paper. The Company's EVA polymers business is a leading North
American manufacturer of a full range of specialty EVA resins and compounds, as well as select grades of low-density
polyethylene. The Company's EVA polymers products are used in many applications, including flexible packaging films,
lamination film products, hot melt adhesives, automotive parts and carpeting. The Company's RDP business is a leading
producer of products that have applications in a number of building and construction applications including flooring, plasters,
insulation, tiling and waterproofing. The Company's acetate tow business serves consumer-driven applications and is a leading
global producer and supplier of acetate tow and acetate flake, primarily used in filter products applications.
•
Other Activities
Other Activities primarily consists of corporate center costs, including administrative activities such as finance, information
technology and human resource functions, interest income and expense associated with financing activities and results of the
Company's captive insurance companies. Other Activities also includes the components of net periodic benefit cost (interest
cost, expected return on assets and net actuarial gains and losses) for the Company's defined benefit pension plans and other
postretirement plans not allocated to the Company's business segments.
The business segment management reporting and controlling systems are based on the same accounting policies as those
described in the summary of significant accounting policies (Note 2).
Sales transactions between business segments are generally recorded at values that approximate third-party selling prices.
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Engineered
Materials
Acetyl Chain
Other
Activities
Eliminations
Consolidated
Net sales ............................................................................
Other (charges) gains, net (Note 24) .................................
Operating profit (loss) .......................................................
Equity in net earnings (loss) of affiliates ..........................
Depreciation and amortization ..........................................
Capital expenditures ..........................................................
4,024
(7)
429
202
226
178
Goodwill and intangible assets, net ...................................
Total assets ........................................................................
10,826
20,611
Net sales ............................................................................
Other (charges) gains, net (Note 24) .................................
Operating profit (loss) .......................................................
Equity in net earnings (loss) of affiliates ..........................
Depreciation and amortization ..........................................
Capital expenditures ..........................................................
Goodwill and intangible assets, net ...................................
Total assets ........................................................................
Net sales ............................................................................
Other (charges) gains, net (Note 24) .................................
Operating profit (loss) .......................................................
Equity in net earnings (loss) of affiliates ..........................
Gain (loss) on sale of investments in affiliates (Note 7) ...
Depreciation and amortization ..........................................
Capital expenditures ..........................................................
______________________________
2,718
6
411
126
144
154
1,714
5,363
2,081
(36)
235
115
1,408
134
106
—
190
—
(1)
(498)
11
23
53
(In $ millions)
Year Ended December 31, 2022
5,743 (1)
—
1,447
7
213
352
As of December 31, 2022
421
5,471
Year Ended December 31, 2021
5,894 (1)
1
1,875
7
210
311
As of December 31, 2021
433
5,526
Year Ended December 31, 2020
3,634 (1)
6
681
5
—
199
208
—
(9)
(252)
14
—
17
34
—
(4)
(340)
13
17
25
—
1,086
(94)
—
—
—
—
—
9,673
(8)
1,378
220
462
583 (2)
—
—
11,247
26,272
(75)
—
—
—
—
—
8,537
3
1,946
146
371
490 (2)
—
—
2,147
11,975
(60)
—
—
—
—
—
—
5,655
(39)
664
134
1,408
350
348 (2)
(1)
(2)
Includes intersegment sales of $94 million, $75 million and $60 million for the years ended December 31, 2022, 2021 and
2020, respectively.
Includes an increase in accrued capital expenditures of $40 million, an increase in accrued capital expenditures of
$23 million and a decrease in accrued capital expenditures of $16 million for the years ended December 31, 2022, 2021
and 2020, respectively.
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Geographical Area Information
The Net sales to external customers based on geographic location are as follows:
Belgium ........................................................................................................................
Canada ..........................................................................................................................
China ............................................................................................................................
Germany .......................................................................................................................
Japan .............................................................................................................................
Mexico ..........................................................................................................................
Netherlands ...................................................................................................................
Singapore ......................................................................................................................
South Korea ..................................................................................................................
Switzerland ...................................................................................................................
U.S. ...............................................................................................................................
Other .............................................................................................................................
Total .........................................................................................................................
Year Ended December 31,
2022
2021
2020
(In $ millions)
268
98
1,621
2,675
15
330
—
1,202
8
140
2,004
176
8,537
251
120
1,525
2,934
87
359
105
1,209
68
165
2,562
288
9,673
274
68
888
1,837
10
200
—
627
8
81
1,490
172
5,655
Property, plant and equipment, net based on the geographic location of the Company's facilities is as follows:
Belgium ................................................................................................................................................
Canada .................................................................................................................................................
China ....................................................................................................................................................
Germany ..............................................................................................................................................
Japan ....................................................................................................................................................
Mexico .................................................................................................................................................
Netherlands ..........................................................................................................................................
Singapore .............................................................................................................................................
South Korea .........................................................................................................................................
Switzerland ..........................................................................................................................................
U.S. ......................................................................................................................................................
Other ....................................................................................................................................................
Total ................................................................................................................................................
22. Revenue Recognition
Disaggregated Revenue
As of December 31,
2022
2021
(In $ millions)
113
128
688
937
52
52
52
99
79
73
3,032
279
5,584
65
96
413
812
—
58
43
72
4
18
2,377
235
4,193
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.
The Company manages its Engineered Materials business segment through its project management pipeline, which is
comprised of a broad range of projects which are solutions-based and are tailored to each customers' unique needs. Projects are
identified and selected based on success rate and may involve a number of different polymers per project for use in multiple
end-use applications. Therefore, the Company is agnostic toward products and end-use markets for the Engineered Materials
business segment.
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The Company manages its Acetyl Chain business segment by leveraging its ability to sell chemicals externally to end-use
markets or downstream to its acetate tow, intermediate chemistry, emulsion polymers, redispersible powders and ethylene vinyl
acetate polymers businesses. Decisions to sell externally and geographically or downstream and along the Acetyl Chain are
based on market demand, trade flows and maximizing the value of its chemicals. Therefore, the Company's strategic focus is on
executing within this integrated chain model and less on driving product-specific revenue.
Further disaggregation of Net sales by business segment and geographic destination is as follows:
Engineered Materials
North America ..........................................................................................................
Europe and Africa .....................................................................................................
Asia-Pacific ...............................................................................................................
South America ..........................................................................................................
Total ....................................................................................................................
Acetyl Chain
North America ..........................................................................................................
Europe and Africa .....................................................................................................
Asia-Pacific ...............................................................................................................
South America ..........................................................................................................
.................................................................................................................
Total(1)
Year Ended December 31,
2022
2021
2020
(In $ millions)
1,197
1,538
1,180
109
4,024
1,713
1,961
1,811
164
5,649
774
1,155
703
86
2,718
1,533
1,914
2,214
158
5,819
577
906
534
64
2,081
1,106
1,292
1,093
83
3,574
______________________________
(1) Excludes intersegment sales of $94 million, $75 million and $60 million for the years ended December 31, 2022, 2021 and
2020, respectively.
23. Earnings (Loss) Per Share
Year Ended December 31,
2022
2021
2020
(In $ millions, except share data)
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations ........................................................
Earnings (loss) from discontinued operations .....................................................
Net earnings (loss) .............................................................................................
1,902
(8)
1,894
1,912
(22)
1,890
1,997
(12)
1,985
Weighted average shares - basic ............................................................................
Incremental shares attributable to equity awards(1)
................................................
Weighted average shares - diluted .....................................................................
108,380,082
855,294
109,235,376
111,224,017
860,395
112,084,412
117,817,445
663,931
118,481,376
______________________________
(1) Excludes 154,172, 555 and 4,313 equity award shares for the years ended December 31, 2022, 2021 and 2020,
respectively, as their effect would have been antidilutive.
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24. Other (Charges) Gains, Net
Restructuring ................................................................................................................
Asset impairments ........................................................................................................
Plant/office closures .....................................................................................................
Commercial disputes ....................................................................................................
European Commission investigation ............................................................................
Other .............................................................................................................................
Total .........................................................................................................................
25. Subsequent Events
Year Ended December 31,
2022
2021
2020
(In $ millions)
(6)
(14)
12
—
—
—
(8)
(5)
(2)
10
—
—
—
3
(20)
(31)
7
6
(2)
1
(39)
On February 23, 2023, the Company announced the signing of a term sheet to form a food ingredients joint venture with Mitsui
& Co., Ltd.
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Corporate Information
Board of Directors
Jean S. Blackwell 1,3
Former Executive Vice President,
Cummins, Inc.
William M. Brown 2,3
Former Executive Chair and Chief
Executive Officer,
L3Harris Technologies, Inc.
Edward G. Galante 2,4
Former Senior Vice President,
Exxon Mobil Corporation
Rahul Ghai1,3
Chief Financial Officer, GE Aerospace
Kathryn M. Hill 2,4
Former Senior Vice President,
Development Strategy, Cisco Systems
Inc.
Michael Koenig 2,4
Chief Executive Officer and Director,
Nobian Industrial Chemicals B.V.
Kim K.W. Rucker 1,3
Former Executive Vice President, General
Counsel and Secretary, Andeavor Corp.
Lori J. Ryerkerk
Chair, Chief Executive Officer and President,
Celanese Corporation
David F. Hoffmeister 1,3
Former Senior Vice President and
Chief Financial Officer,
Life Technologies Corporation
Dr. Jay V. Ihlenfeld 2,4
Former Senior Vice President, Asia
Pacific, 3M Company
Deborah J. Kissire 1,4
Former Vice Chair, Ernst & Young LLP
Current Committee Memberships
1 Audit Committee
2 Compensation and Management Development Committee
3 Nominating and Corporate Governance Committee
4 Environmental, Health, Safety, Quality and Public Policy Committee
Executive Officers†
Lori J. Ryerkerk
Chair, Chief Executive Officer and
President
Scott A. Richardson
Executive Vice President and Chief
Financial Officer
A. Lynne Puckett
Senior Vice President, General Counsel and
Corporate Secretary
Thomas F. Kelly
Senior Vice President, Engineered
Materials
Investor Relations
Celanese Corporation
222 W. Las Colinas Blvd., Suite 900N
Irving, TX 75039
1-972-443-2093
investor.relations@celanese.com
www.celanese.com
Transfer Agent
Computershare Investor Services
P.O. Box 43006
Providence, RI 02940-3006
or
150 Royall St., Suite 101
Canton, MA 02021
1-201-680-6578, or
1-800-522-66645 (US holders)
www.computershare.com
Stock Exchange
Celanese Common Stock is listed on the
New York Stock Exchange
Common Stock Symbol: CE
† Positions as of February 14, 2023.
Mark C. Murray
Senior Vice President, Acetyls
Corporate Governance
Strong corporate governance is an
integral part of Celanese’s core values.
Our company’s corporate governance
policies and procedures are available
on the company’s website at
https://investors.celanese.com under
Corporate Governance. This site
includes the Company’s Corporate
Governance Guidelines, Board
Committee Charters, Business Conduct
Policy and Financial Code of Ethics.
Investor Information
Shareholders, security analysts and
investors can access Celanese’s news
and events, periodic reports filed with
the Securities and Exchange
Commission and other related
company information by visiting our
web site at https://www.celanese.com
and https://investors.celanese.com.
Annual Meeting
The 2023 Annual Meeting of Shareholders of
Celanese Corporation will be held virtually at
1:00 p.m. (EDT), Wednesday, April 20, 2023,
accessible at the following site:
www.virtualshareholdermeeting.com/CE2023
Independent Registered Public
Accounting Firm
KPMG LLP
2323 Ross Ave., Suite 1400
Dallas, TX 75201
Corporate Address
Celanese Corporation
222 W. Las Colinas Blvd., Suite 900N
Irving, TX 75039
1-972-443-4000
www.celanese.com