In this Quarterly Report on Form 10-Q ("Quarterly Report"), the term "Celanese"
refers to Celanese Corporation, a Delaware corporation, and not its
subsidiaries. The terms the "Company," "we," "our" and "us," refer to Celanese
and its subsidiaries on a consolidated basis. The term "Celanese US" refers to
the Company's subsidiary, Celanese US Holdings LLC, a Delaware limited liability
company, and not its subsidiaries.
The following discussion should be read in conjunction with the Celanese
Corporation and Subsidiaries consolidated financial statements as of and for the
year ended December 31, 2019 filed on February 6, 2020 with the Securities and
Exchange Commission ("SEC") as part of the Company's Annual Reporting on Form
10-K ("2019 Form 10-K") and the unaudited interim consolidated financial
statements and notes to the unaudited interim consolidated financial statements,
which are prepared in accordance with accounting principles generally accepted
in the United States of America ("US GAAP").
Investors are cautioned that the forward-looking statements contained in this
section and other parts of this Quarterly Report involve both risk and
uncertainty. Several important factors could cause actual results to differ
materially from those anticipated by these statements. Many of these statements
are macroeconomic in nature and are, therefore, beyond the control of
management. See "Forward-Looking Statements" below and at the beginning of our
2019 Form 10-K.
Forward-Looking Statements
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") and other parts of this Quarterly Report contain certain
forward-looking statements 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.
All forward-looking statements made in this Quarterly Report are made as of the
date hereof, and the risk that actual results will differ materially from
expectations expressed in this Quarterly Report will increase with the passage
of time. We undertake no obligation, and disclaim any duty, to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, changes in our expectations or otherwise.
COVID-19 Update
On March 11, 2020, the World Health Organization declared the outbreak of a
novel coronavirus ("COVID-19") as a pandemic, which originated in China and has
spread throughout the world to substantially all locations where we have
offices, production facilities, customers and suppliers, creating a dynamic and
challenging situation worldwide. The COVID-19 pandemic is evolving, and to date
has led to the implementation of various responses, including government-imposed
quarantines, stay-at-home restrictions, travel restrictions and other public
health safety measures.
Our employees' health and well-being continue to be of vital importance. We have
implemented contingency planning, and employees who can work remotely are doing
so from their homes to a significant extent. For employees who are considered
essential and are working in plants, we have implemented government recommended
protocols and best practices related to social distancing and best hygiene
practices, including the use of additional personal protective equipment and
enhanced cleaning protocols, where appropriate. We have also restricted visitor
access and non-essential business travel. We have a global crisis team in place
monitoring the evolving situation and recommending risk mitigation actions,
including workplace health and safety measures. We also have site activation
teams at all locations to guide and implement our careful return-to-office
efforts in accordance with government regulations and recommended protocols. Our
presence in China provided us with an advance view of how COVID-19 scenarios can
unfold as well as the importance of taking early action.
We operate within a geographically-balanced global footprint and have the
ability to utilize different production and distribution strategies depending on
the business and product to satisfy customer demands. We continue to pursue our
existing operational strategy. Since our industry is considered essential by the
local governments in the majority of the areas we operate, most of our plants
continue to be operational, and we have been able to maintain a largely
consistent supply chain. However, as customer demand has weakened, we have
temporarily reduced run rates at, and in some instances temporarily idled,
certain of our plants to reduce costs and inventory levels. During the three and
six months ended June 30, 2020, the effects of COVID-19 and related actions to
control its spread had a significant, negative impact on the operating results
of our Engineered Materials and Acetyl Chain segments, as discussed in more
detail in the individual reporting segment sections below. We expect the

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declines in consumer demand, particularly in the Western Hemisphere, to continue
to work through the relevant value chains through the second half of 2020. In
Engineered Materials, our most impacted end markets reflect a significant
decrease in big-ticket discretionary spending among consumers for items such as
automobiles, electronics and appliances, as well as reduced spending on
materials for industrial and construction applications and in medical
applications, due to the delay in elective surgeries. Other application areas
including food and beverage, pharma and 5G infrastructure are more resilient. In
the Acetyl Chain, we benefit from a highly diversified set of end-uses with less
exposure, relative to others in the industry, to end markets that have been most
acutely impacted by COVID-19, like automotive. However, the historically low
acetic acid pricing, along with the recent developments with global oil markets,
continue to present a deflationary environment for the Acetyl Chain business. At
the same time, we see resiliency and even growth in some applications within all
of our segments, including packaging, hygiene products, disinfectants, pharma
and cigarettes. We anticipate that our operations will continue to be negatively
impacted on a short-term basis. We currently anticipate that customer demand and
our results of operations should begin to normalize in 2021, absent a similar
resurgence of COVID-19 and as the economies in which we operate begin to
recover.
We have taken, and will continue to take, actions to mitigate the impact of
COVID-19 on our results of operations, financial condition and cash flow.
Through the capacity reductions we have implemented at our plants, we are
managing inventory levels, reducing our manufacturing costs and optimizing our
working capital. We have reduced discretionary spending such as travel and other
corporate functional expenses. Although significant layoffs have not occurred
within the Company during the three and six months ended June 30, 2020, some
positions have been eliminated under a global restructuring program implemented
largely as a result of cost cutting initiatives due to the current global
economic environment. We have also engaged in temporary, targeted furloughs
where plant operations have been reduced.
We are actively managing our business to maintain cash flow, and we believe that
liquidity from (i) cash generated from operations; (ii) cash on hand; (iii)
dividends from our portfolio of strategic investments; and (iv) cash available
from our senior unsecured revolving credit facility and our accounts receivable
securitization facility, will be sufficient to meet our operational and capital
investment needs and financial obligations for the foreseeable future. We remain
in compliance with the financial covenants under our senior unsecured revolving
credit facility and short-term bilateral term loans and expect to remain in
compliance based on our current expectation of future results of operations.
To preserve our cash balances and maintain liquidity, we have reduced our
capital expenditures forecast from $500 million to less than $350 million for
the full year 2020, prioritizing those projects that continue to drive
productivity for us in the near-term. We remain fully committed to our current
cash dividend. During the three months ended June 30, 2020, we temporarily
paused share repurchases and will maintain current liquidity levels before
deploying any discretionary operating cash flow for such share repurchases.
The extent to which COVID-19 will adversely impact our business, financial
condition and results of operations will depend on numerous evolving factors,
which are highly uncertain, rapidly changing and cannot be predicted. For
further information regarding the impact COVID-19 could have on our business,
financial condition and results of operations, see Part II - Item 1A. Risk
Factors. For further discussion of our liquidity condition, see Liquidity and
Capital Resources in this Part I - Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations.
Risk Factors
See Part I - Item 1A. Risk Factors of our 2019 Form 10-K and subsequent periodic
filings we make with the SEC for a description of certain risk factors that you
should consider which could significantly affect our financial results. In
addition, the following factors 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. These factors 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, textiles, 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 fuel oil 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, expansions and maintenance;



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• 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 targets and to

consummate acquisition or investment transactions, including obtaining

regulatory approvals, consistent with our strategy;

• market acceptance of our technology;

• 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 that may impact recorded or future
    tax impacts associated with the Tax Cuts and Jobs Act (the "TCJA");

• changes in the degree of intellectual property and other legal protection

afforded to our products or technologies, or the theft of such intellectual

property;

• compliance and other costs and potential disruption or interruption of


    production or operations due to accidents, interruptions in sources of raw
    materials, cyber security incidents, terrorism or political unrest, public
    health crises (including, but not limited to, the COVID-19 outbreak), 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;

• 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 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;

• 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, both referenced and not referenced in this Quarterly

Report.




Many of these factors are macroeconomic in nature and are, therefore, beyond our
control. In addition, COVID-19 and responses to the pandemic by governments and
businesses, have significantly increased financial and economic 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 Quarterly Report as anticipated, believed, estimated, expected, intended,
planned or projected. We neither intend nor assume any obligation to update
these forward-looking statements, which speak only as of their dates.
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

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record of execution, strong performance built on differentiated business models and a clear focus on growth and value creation. Known for operational excellence, reliability and execution of our business strategies, we partner with our customers around the globe to deliver best-in-class technologies and solutions.

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