Celanese Reaffirms Second Quarter Adjusted EPS at High End of Recalculated Guidance; Full Year 2005 Guidance to be Updated on August 9 Earnings Call; Adopt New Convention for Reporting Adjusted EPS.DALLAS Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. -- Celanese Corporation (NYSE NYSE See: New York Stock Exchange :CE) announced today that it expects its second quarter adjusted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. to be at the high end of its guidance range based on strong business fundamentals business fundamentals The general background within which an economy operates including earnings, sales, wage rates, taxes, and inflation. Improving business fundamentals are generally viewed as bullish for stocks, although stock prices at any given point . The company will update its full year 2005 guidance in light of the second quarter performance and expected market conditions on its August 9, 2005 earnings call. In an effort to simplify and make more transparent (1) Refers to a change in hardware or software that, after installation, causes no noticeable change in operation. Also known as "feature transparency." Contrast with "seamless integration," which means that an additional component to the system can be added without incurring any its financial information, the company also adopted a new convention for reporting adjusted earnings per share (EPS) and adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become . "We are pleased with the results our associates delivered across all of our businesses," said David Weidman, chief executive officer. "Our integrated value chain allowed us to capture benefits from lower raw material cost, particularly ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. and natural gas, and we continued to benefit from a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. acetyl acetyl /ac·e·tyl/ (as´e-til) (as´e-tel?) (ah-se´til) the monovalent radical CH3COsbond, a combining form of acetic acid. a·ce·tyl n. market." Celanese provides investors with EPS calculated under U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) and also an adjusted EPS, as it believes adjusted EPS more clearly reflects the performance of the underlying business by providing transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. into unusual or nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. items. For calculating EPS based on GAAP results, the company provided guidance on a tax rate of 35% for 2005. For the adjusted EPS calculation, the company has adjusted its tax computations for 2005, reflecting taxes that would have been accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. if the special items had not been incurred. These tax adjustments for the special items result in a modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. effective tax rate for the adjusted EPS of 24% in 2005. The company also will supply guidance on diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding based on the diluted shares at the end of the previous quarter. For example, the calculation for diluted shares for adjusted EPS in the first quarter of 2005 is 170.9 million, consisting of 158.5 million basic shares outstanding, plus 12 million diluted preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. and approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 400,000 dilutive options based on the average share price of $16.64 during the first quarter, as calculated under the treasury stock method in FAS 128. The company will use the same figure for its guidance for the second quarter and full year 2005. "We believe we have put forward a more investor-friendly format to gain insights into Celanese Corporation's financial results," said C. J. Nelson, executive vice president and chief financial officer. "This format clearly outlines the performance of our underlying business in a fashion that investors can more easily understand." In implementing this new convention, the company has reissued its first quarter adjusted EPS and recalculated guidance on adjusted EPS for the second quarter and full year based on the same business and economic assumptions the company articulated ar·tic·u·la·ted adj. Characterized by or having articulations; jointed. during its first quarter 2005 conference call on May 10. As a result, first quarter adjusted EPS is now $0.62. The previous per share result was $0.87, based on basic shares outstanding and adjustments that were not tax affected. The adjustments were not tax affected as most occurred in the U.S. where the company has tax losses for which it takes no benefit. The guidance for second quarter 2005 adjusted EPS is now between $0.39 and $0.44 based on the new methodology, as opposed op·pose v. op·posed, op·pos·ing, op·pos·es v.tr. 1. To be in contention or conflict with: oppose the enemy force. 2. to the former guidance of $0.36 to $0.41. Based on strong underlying business fundamentals, the company now expects the second quarter adjusted EPS to be toward the high end of the recalculated guidance range. For full year 2005, using the new convention and the previous earnings guidance, adjusted EPS is recalculated to be between $1.64 and $1.69. The company will update the full year guidance in light of second quarter performance and expected market conditions on its August 9, 2005 second quarter earnings call. For adjusted EBITDA, the company has redesigned its reconciliation to net earnings (loss) to simplify the presentation while continuing to meet the needs of the bondholders. Celanese will host a brief conference call to answer any questions regarding the change in reporting conventions on Monday Monday: see week. , July July: see month. 11 at 10:30 a.m. Central Time/11:30 a.m. Eastern Time. Corky Nelson Corky Nelson is a former American football coach. He is known for his coaching stint at the University of North Texas, but was more successful on the high school level. , executive vice president and chief financial officer, will host the call. This call can be accessed by phone 10 minutes prior to the announced start time at the following numbers: U. S. participants: 1-800-688-0836 International participants: 617-614-4072 Participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. passcode: 73840884 The call will also be available by webcast from the Investor section of Celanese's web site at www.celanese.com.
Celanese Corporation
(in $ millions except per Q1 2005
share figures)
As reported Revised
GAAP EPS Adjusted EPS Adjusted EPS
-------------- -------------- --------------
Earnings from Continuing
Operations 23 23 23
Adjustments
Refinancing Costs 102 102
Special Charges 38 38
Monitoring Fee 10 10
-------------- ----------- -----------
Earnings from Continuing (a) (a)
Operations before Tax
and Minority Interest 23 173 173
============== =========== ===========
Income Tax Provision -
for GAAP EPS (8)
Income Tax Provision -
for Adjusted EPS (8) (42)
Minority Interest (25) (25) (25)
Preferred Dividends (2) (2) (2)
-------------- ----------- -----------
Net Earnings Available to (a) (a)
Common Shareholders (12) 138 104
============== =========== ===========
Basic EPS Calculation
-------------------------
Weighted Average Shares
Outstanding 141.7 141.7 141.7
End of Period Shares
Outstanding 158.5 158.5 158.5
Basic EPS - Using
Weighted Average Shares $(0.08)
Basic EPS - Using End of
Period Shares $0.87 $0.66
Diluted EPS Calculation
-------------------------
Net Earnings Available to
Common Shareholders 104
Add Back: Preferred
Dividends 2
-------------- ----------- -----------
Net Earnings - for
adjusted EPS 106
============== =========== ===========
Diluted Shares
Outstanding:
End of Period Shares
Outstanding 158.5 158.5 158.5
Assumed conversion of
Preferred Shares 12.0
Dilutive Options -
assumes no loss in
Q1 0.4
-----------
Total Diluted Shares
Outstanding-End of
Period 170.9
Diluted Adjusted EPS $0.62
===========
Guidance Range Given
(1) - assumes midpoint of
range given
(a) On an adjusted basis
Celanese Corporation
-------------- -------------- -----------
(in $ millions except per Q2 2005(1)
share figures)
Guidance Guidance Revised
GAAP EPS Adjusted EPS Adjusted EPS
-------------- -------------- --------------
Earnings from Continuing
Operations 105 105 105
Adjustments
Refinancing Costs 0 0
Special Charges 10 10
Monitoring Fee 0 0
-------------- ----------- -----------
Earnings from Continuing (a) (a)
Operations before Tax
and Minority Interest 105 115 115
============== =========== ===========
Income Tax Provision -
for GAAP EPS (37)
Income Tax Provision -
for Adjusted EPS (36) (28)
Minority Interest (15) (15) (15)
Preferred Dividends (2) (2) (2)
-------------- ----------- -----------
Net Earnings Available to (a) (a)
Common Shareholders 51 62 70
============== =========== ===========
Basic EPS Calculation
-------------------------
Weighted Average Shares
Outstanding 158.5 158.5 158.5
End of Period Shares
Outstanding 158.5 158.5 158.5
Basic EPS - Using
Weighted Average Shares $0.32
Basic EPS - Using End of
Period Shares $0.39 $0.44
Diluted EPS Calculation
-------------------------
Net Earnings Available to
Common Shareholders 70
Add Back: Preferred
Dividends 2
-------------- ----------- -----------
Net Earnings - for
adjusted EPS 72
============== =========== ===========
Diluted Shares
Outstanding:
End of Period Shares
Outstanding 158.5 158.5 158.5
Assumed conversion of
Preferred Shares 12.0
Dilutive Options -
assumes no loss in
Q1 0.4
-----------
Total Diluted Shares
Outstanding-End of
Period 170.9
Diluted Adjusted EPS $0.42
===========
Guidance Range Given $0.30 - $0.35 $0.36 - $0.41 $0.39 - $0.44
(1) - assumes midpoint of
range given
(a) On an adjusted basis
Celanese Corporation
(in $ millions except per share figures) FY 2005(1)
Guidance Revised
Adjusted EPS Adjusted EPS
--------------- --------------
Earnings from Continuing Operations 269 269
Adjustments
Refinancing Costs 102 102
Special Charges 75 75
Monitoring Fee 10 10
----------- -----------
Earnings from Continuing Operations (a) (a)
before Tax and Minority Interest 456 456
=========== ===========
Income Tax Provision - for GAAP EPS (94)
Income Tax Provision - for Adjusted EPS (109)
Minority Interest (61) (61)
Preferred Dividends (10) (10)
----------- -----------
Net Earnings Available to Common (a) (a)
Shareholders 291 276
=========== ===========
Basic EPS Calculation
----------------------------------------
Weighted Average Shares Outstanding 154.3 154.3
End of Period Shares Outstanding 158.5 158.5
Basic EPS - Using Weighted Average
Shares
Basic EPS - Using End of Period Shares $1.83 $1.74
Diluted EPS Calculation
----------------------------------------
Net Earnings Available to Common
Shareholders 276
Add Back: Preferred Dividends 10
----------- -----------
Net Earnings - for adjusted EPS 286
=========== ===========
Diluted Shares Outstanding:
End of Period Shares Outstanding 158.5 158.5
Assumed conversion of Preferred
Shares 12.0
Dilutive Options - assumes no loss
in Q1 0.4
-----------
Total Diluted Shares Outstanding-End of
Period 170.9
Diluted Adjusted EPS $1.67
===========
Guidance Range Given $1.79 - $1.87 $1.64 - $1.69
(1) - assumes midpoint of range given
(a) On an adjusted basis
Celanese Corporation Adjusted EBITDA
Q1 2005 Q1 2004
-------------- ----------------
in $ millions Successor Predecessor
-------------------------------------- -------------- ----------------
Net earnings (loss) (10) 78
Earnings from discontinued operations -- (23)
Interest expense 176 6
Interest income (15) (5)
Income tax provision 8 17
Depreciation and amortization 63 72
EBITDA 222 145
-------------------------------------- -------------- ----------------
Adjustments:
Cash dividends received in excess of
equity in net earnings of affiliates 21 4
Special Charges (1) 38 28
Other unusual items and adjustments
(2) 53 31
-------------- ----------------
Subtotal - Adjustments 112 63
-------------------------------------- -------------- ----------------
Adjusted EBITDA 334 208
-------------------------------------- -------------- ----------------
Special Charges (1)
Q1 2005 Q1 2004
-------------- ----------------
in $ millions Successor Predecessor
-------------------------------------- -------------- ----------------
Employee termination benefits 2 2
Plant/office closures 1 --
Termination of advisor monitoring
agreement 35 -
Advisory Services -- 25
Other -- 1
-------------------------------------- -------------- ----------------
Total special charges 38 28
-------------------------------------- -------------- ----------------
Other unusual items and adjustments
(2)
Q1 2005 Q1 2004
-------------- ----------------
in $ millions Successor Predecessor
-------------------------------------- -------------- ----------------
Net gain (loss) on disposition of
assets (1) 1
Excess of minority interest income
over cash dividends paid to
minority shareholders 25 --
Severance and other restructuring
charges not included in special
charges 2 11
Cash interest income used by captive
insurance companies to funds ops 3 3
Unusual and non-recurring items(a) 9 (2)
Non-cash charges(b) 5 9
Advisor monitoring fee 10 --
Proforma cost savings(c) -- 9
-------------------------------------- -------------- ----------------
Total other unusual non-cash items and
adjustments 53 31
-------------------------------------- -------------- ----------------
(a) Primarily includes costs for productivity enhancement programs,
Summit relocation, IPO bonus and Vinamul acquisition.
(b) Primarily includes ineffective portion of a net investment hedge
and purchase accounting for inventories.
(c) Primarily represents adjustments to net earnings (loss) on a
proforma basis for certain cost savings that we expect to achieve
from additional pension contributions.
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," 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 forward-looking statements contained in this release. Numerous factors, many of which are beyond the company's control, could cause actual results to differ materially from those expressed as forward-looking statements. Certain of these risk factors are discussed in the company's Annual Report on Form 10K. 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. Successor 1. SuccessoR - A language for distributed computing derived from SR. ["SuccessoR: Refinements to SR", R.A. Olsson et al, TR 84-3, U Arizona 1984]. 2. successor - daughter Successor represents Celanese Corporation's financial position as of December December: see month. 31, 2004 and March 31, 2005 and its consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: results of operations for the three months ended March 31, 2005. These consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge reflect the application of purchase accounting relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the acquisition of Celanese AG. Predecessor predecessor - parent Predecessor represents Celanese AG's consolidated results of its operations for the three months ended March 31, 2004. These results relate to a period prior to the acquisition of Celanese AG and present Celanese AG's historical basis of accounting without the application of purchase accounting. The results of the Successor are not comparable to the results of the Predecessor due to the difference in the basis of presentation of purchase accounting as compared to historical cost. Reconciliation of Non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. GAAP Measures to U.S. GAAP This release reflects three performance measures, adjusted EBITDA, adjusted earnings per share and diluted adjusted earnings per share as non-U.S. GAAP measures. The most directly comparable financial measure presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. GAAP in our consolidated financial statements for adjusted EBITDA is net earnings (loss); for adjusted earnings per share is basic earnings per share; and for diluted adjusted earnings per share is diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . For a reconciliation of these non-U.S. GAAP measures to U.S. GAAP figures, see the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. schedules to this release. Use of Non-U.S. GAAP Financial Information Adjusted EBITDA, a measure used by management to measure performance, is defined as earnings (loss) from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , plus interest expense net of interest income, income taxes and depreciation and amortization, and further adjusted for certain cash and non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. . Our management believes adjusted EBITDA is useful to investors because it is one of the primary measures our management uses for its planning and budgeting processes and to monitor and evaluate financial and operating results. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to be an alternative to net earnings as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, adjusted EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements nor does it represent the amount used in our debt covenants. Adjusted earnings per share is defined as net earnings available to common shareholders adjusted for special and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. expenses divided by the number of common shares outstanding as of the end of the period. Diluted adjusted earnings per share is defined as net earnings available to common shareholders adjusted for special and one-time expenses divided by the number of common shares outstanding as of the end of the previously reported period and assuming conversion of all preferred shares into common stock and dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. from the exercise of options under the treasury stock method under FAS 128. We believe that the presentation of all of the non-U.S. GAAP information 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 conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with non-U.S. GAAP information, investors are provided with a more meaningful understanding of our ongoing operating performance. This non-U.S. GAAP information is not intended to be considered in isolation or as a substitute for U.S. GAAP financial information. 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 fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. to management. Quarterly results should not be taken as an indication of the results of operations to be reported to be spoken of; to be mentioned, whether favorably or unfavorably. See also: Report for any subsequent period or for the full fiscal year. |
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