In this Quarterly Report on Form 10-Q ("Quarterly Report"), the term "Celanese"
refers to Celanese Corporation, a Delaware corporation, and not its
subsidiaries. The terms the "Company," "we," "our" and "us," refer to Celanese
and its subsidiaries on a consolidated basis. The term "Celanese U.S." refers to
the Company's subsidiary, Celanese U.S. 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, 2020 filed on February 11, 2021 with the Securities and
Exchange Commission ("SEC") as part of the Company's Annual Reporting on Form
10-K ("2020 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 ("U.S. GAAP").
Investors are cautioned that the forward-looking statements contained in this
section and other parts of this Quarterly Report involve both risk and
uncertainty. Several important factors could cause actual results to differ
materially from those anticipated by these statements. Many of these statements
are macroeconomic in nature and are, therefore, beyond the control of
management. See "Forward-Looking Statements" below and at the beginning of our
2020 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
The COVID-19 pandemic and the various responses thereto, including
government-imposed quarantines, stay-at-home restrictions, travel restrictions
and other public health and safety measures, continue to evolve. Our employees'
health and well-being continue to be of vital importance and we continue to
monitor the pandemic in the areas where we have employees and operations. We
implemented government recommended protocols and best practices related to
social distancing and hygiene. We implemented careful return-to-office efforts
in accordance with government regulations and recommended protocols.
After declining during 2020, consumer demand for most applications has increased
and rebounded to pre-COVID-19 levels within many regions of the world, which has
positively impacted our results of operations. Where we temporarily reduced run
rates in prior quarters, our plants are now operating at more normalized levels,
and we have been able to maintain a largely consistent supply chain. We
currently anticipate that the extent to which COVID-19 impacts customer demand
will continue to moderate, subject to effective rollout of vaccines and the
impact of resurgences and other variants of COVID-19. Like many companies, we
have experienced a tightening labor market, with increased competitiveness and
higher costs for the pool of talent critical for specialty manufacturing and
other operations. Labor market challenges continued during the third quarter of
2021.
Due to potential impacts of COVID-19 resurgences and variants, some uncertainty
remains in the pandemic's future duration and scope. The extent to which
resurgences or other variants of COVID-19 may adversely impact demand for our
products, availability and price of raw materials and the labor supply, and
therefore our business, financial condition and results of operations, will
depend on numerous factors, including the effectiveness of vaccines, the extent
and locations of any resurgences of the virus, health and safety measures and
the continuing impact of the pandemic on supply chains (including the
availability and cost of transportation and materials). In addition, on
September 9, 2021, the President directed the Occupational Safety and Health
Administration to promulgate rules requiring large employers to mandate employee
vaccinations. The extent of the regulatory and potential cost impact of these
rules, referred to as the emergency temporary standard ("ETS"), is not clear,
but the ETS could impose additional costs on our operations. These factors are
uncertain, rapidly changing and cannot be
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predicted. For further information regarding the impact COVID-19 could have on
our business, financial condition and results of operations, see Part I - Item
1A. Risk Factors in our Annual Report on Form 10-K for the year ended December
31, 2020. 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 2020 Form 10-K for 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:
•the extent to which resurgences or other variants of COVID-19 adversely impact
the economic environment, market demand and our operations, as well as the pace
of any economic recovery;
•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;
•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 complete
acquisition or investment transactions, including obtaining regulatory
approvals, consistent with our strategy;
•market acceptance of our technology;
•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 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
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 that may impact recorded or future tax
liabilities and the impacts of potential regulatory and legislative tax
developments in the United States or 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;
•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
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•various other factors, both referenced and not referenced in this Quarterly
Report.
Many of these factors are macroeconomic in nature and are, therefore, beyond our
control. Should one or more of these risks or uncertainties materialize, affect
us in ways or to an extent that we currently do not expect or consider to be
significant, or should underlying assumptions prove incorrect, our actual
results, performance or achievements may vary materially from those described in
this Quarterly Report as anticipated, believed, estimated, expected, intended,
planned or projected. We neither intend nor assume any obligation to update
these forward-looking statements, which speak only as of 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 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.
On June 30, 2021, we signed a definitive agreement to acquire the Santoprene™
thermoplastic vulcanizates ("TPV") elastomers business of Exxon Mobil
Corporation. See   Note 3 - Acquisitions, Dispositions and Plant Closures   in
the accompanying unaudited interim consolidated financial statements for further
information.
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