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Celanese Corporation Announces Change in Pension Accounting



  Celanese Corporation Announces Change in Pension Accounting

Business Wire

DALLAS -- April 02, 2013

Celanese Corporation (NYSE: CE), a global technology and specialty materials
company, today announced its plans to change its accounting policy for its
defined benefit pension plans and other postretirement benefit plans
(collectively, "Plans"). Under the new accounting policy, referred to as
mark-to-market ("MTM") accounting, the company will recognize actuarial gains
and losses and changes in the fair value of the Plans' assets in operating
results in the fourth quarter of each year rather than deferring and
amortizing them into future years. This change is effective January 1, 2013
and is retrospectively applied to the company's financial results for all
periods presented in its Current Report on Form 8-K submitted today.

"We believe this accounting change will provide investors with greater
transparency into our operating results and will allow investors to better
evaluate our underlying operating performance since our Plans' investment
gains and losses as well as interest rate changes will be recognized in the
year in which they occur, rather than amortizing them over future periods.
This accounting policy change will not impact benefits received by
participants of these Plans or related funding obligations," said Steven
Sterin, chief financial officer.

As a result of the retrospective application of this change in accounting
policy, Celanese earnings per share from continuing operations for 2012
decreased from $3.81 to $2.35 primarily due to the fourth quarter MTM
adjustment of $389 million. Excluding the MTM adjustment, Celanese adjusted
earnings per share for 2012 increased from $3.80 to $4.07 on lower
amortization of prior period actuarial losses of $53 million.

The company does not expect the retrospective application of this change in
accounting policy to impact the company's previously communicated growth rate
for adjusted earnings per share in 2013.

In connection with this change in accounting policy and to properly reflect
actual operational expenses of each business segment, the company will change
its allocation of net periodic benefit costs. The company will now allocate
only the service cost for active employees and amortization of prior service
cost components of its Plans to its business segments. All other net periodic
benefit cost components will be recorded as Other Activities. The components
of net periodic benefit cost that will no longer be allocated to each business
segment include interest cost, estimated return on assets and net actuarial
gains and losses as these components are considered financing activities
managed at the corporate level. The company believes the revised expense
allocation will more appropriately match the cost incurred for active
employees to the respective business segment.

Celanese Corporation is a global technology leader in the production of
differentiated chemistry solutions and specialty materials used in most major
industries and consumer applications. With sales almost equally divided
between North America, Europe and Asia, the company uses the full breadth of
its global chemistry, technology and business expertise to create value for
customers and the corporation. Celanese partners with customers to solve their
most critical needs while making a positive impact on its communities and the
world. Based in Dallas, Texas, Celanese employs approximately 7,600 employees
worldwide and had 2012 net sales of $6.4 billion. For more information about
Celanese Corporation and its product offerings, visit www.celanese.com or our
blog at www.celaneseblog.com.

Forward-Looking Statements

This release may contain “forward-looking statements,” which include
information concerning the company's plans, objectives, goals, strategies,
future revenues or performance, capital expenditures, financing needs and
other information that is not historical information. When used in this
release, the words “outlook,” “forecast,” “estimates,” “expects,”
“anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “can,”
“could,” “might,” “will” and variations of such words or similar expressions
are intended to identify forward-looking statements. All forward-looking
statements are based upon current expectations and beliefs and various
assumptions. There can be no assurance that the company will realize these
expectations or that these beliefs will prove correct.

There are a number of risks and uncertainties that could cause actual results
to differ materially from the results expressed or implied in the
forward-looking statements contained in this release. These risks and
uncertainties include, among other things: changes in general economic,
business, political and regulatory conditions in the countries or regions in
which we operate; the length and depth of product and industry business
cycles, particularly in the automotive, electrical, electronics and
construction industries; changes in the price and availability of raw
materials, particularly changes in the demand for, supply of, and market
prices of ethylene, methanol, natural gas, wood pulp and carbon monoxide and
the prices for electricity and other energy sources; the ability to pass
increases in raw material prices on to customers or otherwise improve margins
through price increases; the ability to maintain plant utilization rates and
to implement planned capacity additions and expansions; the ability to improve
productivity by implementing technological improvements to existing plants;
increased price competition and the introduction of competing products by
other companies; market acceptance of our technology; the ability to obtain
governmental approvals and to construct facilities on terms and schedules
acceptable to the company; changes in the degree of intellectual property and
other legal protection afforded to our products or technology, or the theft of
such intellectual property; compliance and other costs and potential
disruption or interruption of production or operations due to accidents, cyber
security incidents, terrorism or political unrest or other unforeseen events
or delays in construction or operation of facilities, including as a result of
geopolitical conditions, including the occurrence of acts of war or terrorist
incidents or as a result of weather or natural disasters; potential liability
for remedial actions and increased costs under existing or future
environmental regulations, including those relating to climate change;
potential liability resulting from pending or future litigation, 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; our level of indebtedness, which
could diminish our ability to raise additional capital to fund operations or
limit our ability to react to changes in the economy or the chemicals
industry; and various other factors discussed from time to time in the
company's filings with the Securities and Exchange Commission. Any
forward-looking statement speaks only as of the date on which it is made, and
the company undertakes no obligation to update any forward-looking statements
to reflect events or circumstances after the date on which it is made or to
reflect the occurrence of anticipated or unanticipated events or
circumstances.

Reconciliation of Non-U.S. GAAP Measures to U.S. GAAP

This release reflects the following performance measure: adjusted earnings per
share as a non-U.S. GAAP measure. This measurement is not recognized in
accordance with U.S. GAAP and should not be viewed as an alternative to U.S.
GAAP measure of performance. The most directly comparable financial measure
presented in accordance with U.S. GAAP in our consolidated financial
statements for adjusted earnings per share is earnings per common
share-diluted.

Use of Non-U.S. GAAP Financial Information

  * Adjusted earnings per share is a measure used by management to measure
    performance. It is defined by the company as earnings (loss) from
    continuing operations, adjusted for other charges and other adjustments,
    and divided by the number of basic common shares, convertible preferred
    shares and dilutive restricted stock units and stock options calculated
    using the treasury method. We may provide guidance on an adjusted earnings
    per share basis and are unable to reconcile forecasted adjusted earnings
    per share to a U.S. GAAP financial measure without unreasonable effort
    because a forecast of other charges and other adjustments is not
    practical. We believe that the presentation of this non-U.S. GAAP measure
    provides useful information to management and investors regarding various
    financial and business trends relating to our financial condition and
    results of operations, and that when U.S. GAAP information is viewed in
    conjunction with non-U.S. GAAP information, investors are provided with a
    more meaningful understanding of our ongoing operating performance. Note:
    The income tax rate used for adjusted earnings per share approximates the
    midpoint in a range of forecasted tax rates for the year. This range may
    include certain partial or full-year forecasted tax opportunities, where
    applicable, and specifically excludes changes in uncertain tax positions,
    discrete items and other material items adjusted out of our U.S. GAAP
    earnings for adjusted earnings per share purposes, and changes in
    management's assessments regarding the ability to realize deferred tax
    assets. We analyze this rate quarterly and adjust if there is a material
    change in the range of forecasted tax rates; an updated forecast would not
    necessarily result in a change to our tax rate used for adjusted earnings
    per share. The adjusted tax rate is an estimate and may differ from the
    tax rate used for U.S. GAAP reporting in any given reporting period. It is
    not practical to reconcile our prospective adjusted tax rate to the actual
    U.S. GAAP tax rate in any given future period.

Results Unaudited

The results presented in this release, together with the adjustments made to
present the results on a comparable basis, have not been audited and are based
on internal financial data furnished to management. Quarterly results should
not be taken as an indication of the results of operations to be reported for
any subsequent period or for the full fiscal year.

                     
Adjusted Earnings (Loss) Per Share - Reconciliation of a Non-U.S. GAAP Measure
- Unaudited
                       
                      Year Ended December 31, 2012
                      As Previously       Effect of            As Adjusted
                      Reported            Change
                                per                per                   per
                                                                        
                                share              share                 share
                      (In $ millions, except per share data)
Earnings (loss)
from continuing       609       3.81      (233 )   (1.46 )     376       2.35
operations
Deduct: Income
tax (provision)       (48   )             103                  55     
benefit
Earnings (loss)
from continuing       657                 (336 )               321
operations before
tax
Other charges and
other adjustments     66                  389                  455
^(1)
Refinancing and       8                   —                    8      
related expenses
Adjusted earnings
(loss) from
continuing            731                 53                   784
operations before
tax
Income tax
(provision)
benefit on            (124  )             (9   )               (133  )
adjusted earnings
^(2)
Noncontrolling        —                   —                    —      
interests
Adjusted earnings
(loss) from           607       3.80      44       0.27        651       4.07
continuing
operations ^(3)
                                                                          
                      Diluted shares (in millions) ^(4)
Weighted average
shares                158.3               —                    158.3
outstanding
Dilutive stock        0.9                 —                    0.9
options
Dilutive
restricted stock      0.6                 —                    0.6    
units
Total diluted         159.8               —                    159.8  
shares

______________________________

^(1) See Other charges and Other adjustments reconciliation for details.

^(2) The adjusted effective tax rate is 17% for the year ended December 31,
2012.

^(3) The As adjusted amount excludes the immediate recognition of actuarial
gains and losses and the impact of actual plan asset returns of 13.1% vs.
expected plan asset returns of 8.06%.

^(4) Potentially dilutive shares are included in the adjusted earnings per
share calculation when adjusted earnings are positive.

                                                     
Other Charges and Other Adjustments - Reconciliation of a Non-U.S. GAAP
Measure - Unaudited
                                                       
Other Charges (Gains), Net:     Year Ended December
                                31, 2012
                                (In $ millions)
Employee termination benefits   6
Kelsterbach plant relocation    7
Plumbing actions                (5         )
Asset impairments               8
Commercial disputes             (2         )
Total                           14          
                                                       
Other Adjustments: ^(1)         Year Ended December   Income Statement
                                31, 2012              Classification
                                (In $ millions)
Business optimization           9                     SG&A
Kelsterbach plant relocation    14                    Cost of sales
Plant closures                  21                    Cost of sales / SG&A
(Gain) loss on disposition of   1                     (Gain) loss on
assets                                                disposition
Acetate production              10                    Cost of sales
interruption costs
InfraServ Hoechst debt          (22        )          Equity in net (earnings)
restructuring                                         loss of affiliates
Actuarial (gain) loss on                              Cost of sales / SG&A /
pension and postretirement      389                   R&D
plans
Other                           19                    Various
Total                           441         
Total other charges and other   455         
adjustments

______________________________

^(1) These items are included in net earnings but not included in Other
charges (gains), net.

Contact:

Celanese Corporation
Investor Relations
Jon Puckett, +1-972-443-4965
Telefax: +1-972-443-8519
Jon.Puckett@celanese.com
or
Media - U.S.
Linda Beheler, +1-972-443-4924
Telefax: +1-972-443-8519
Linda.Beheler@celanese.com
or
Media - Europe
Jens Kurth, +49(0)69 45009 1574
Telefax: +49(0) 45009 58800
J.Kurth@celanese.com
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