UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended
	June 30, ~~2018~~2019
	Or
o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Commission File ~~Number)~~ Number: 001-32410

CELANESE CORPORATION

(Exact Name of Registrant as Specified in its Charter)



Delaware	98-0420726
(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~~ ~~(Address of Principal Executive Offices)~~	~~75039-5421~~ ~~(Zip Code)~~

~~(972)~~

222 W. Las Colinas Blvd., Suite 900N

Irving, TX75039-5421

(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	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share	CE	The New York Stock Exchange
1.125% Senior Notes due 2023	CE /23	The New York Stock Exchange
1.250% Senior Notes due 2025	CE /25	The New York Stock Exchange
2.125% Senior Notes due 2027	CE /27	The New York Stock Exchange

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. Yesþ☑ No o☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yesþ☑ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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~~ þ	~~Accelerated filer~~ o	~~Non-accelerated filer~~ o	~~Smaller reporting company~~ o	~~Emerging growth company~~ o

Large accelerated filerþAccelerated filer ☐Non-accelerated filer ☐Smaller reporting company ☐Emerging growth company ☐

~~(Do not check if a smaller reporting 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. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No þ☑

The number of outstanding shares of the registrant's ~~Series A~~ common stock, $0.0001 par value, as of July ~~13, 2018~~16, 2019 was ~~135,018,148.~~123,740,349.

CELANESE CORPORATION AND SUBSIDIARIES

Form 10-Q

For the Quarterly Period Ended June 30, ~~2018~~2019

TABLE OF CONTENTS



		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	a) Unaudited Interim Consolidated Statements of Operations for the three and six months ended June 30, ~~2018~~2019 and ~~2017~~2018	3
	b) Unaudited Interim Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, ~~2018~~2019 and ~~2017~~2018	4
	c) Unaudited Consolidated Balance Sheets as of June 30, ~~2018~~2019 and December 31, ~~2017~~2018	5
	d) Unaudited Interim Consolidated ~~Statement~~Statements of Equity for the three and six months ended June 30, 2019 and 2018	6
	e) Unaudited Interim Consolidated Statements of Cash Flows for the six months ended June 30, ~~2018~~2019 and ~~2017~~2018	78
	f) Notes to the Unaudited Interim Consolidated Financial Statements	89
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5958
Item 4.	Controls and Procedures	5958

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	6059
Item 1A.	Risk Factors	6059
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	59
Item 6.	Exhibits	60
~~Item 3.~~		~~Defaults Upon Senior Securities~~	60
~~Item 4.~~	~~Mine Safety Disclosures~~	60
~~Item 5.~~	~~Other Information~~	60
~~Item 6.~~	~~Exhibits~~Signatures	61
~~Signatures~~		62

Table of Contents

Item 1. Financial Statements

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017		Three Months Ended June 30,				Six Months Ended June 30,
			As Adjusted (Note 2)				As Adjusted (Note 2)		2019		2018		2019		2018
	(In $ millions, except share and per share data)								(In $ millions, except share and per share data)
Net sales	1,844		1,510		3,695		2,981		1,592		1,844		3,279		3,695
Cost of sales	(1,323	)	(1,145	)	(2,659	)	(2,266	)	(1,169	)	(1,323	)	(2,403	)	(2,659	)
Gross profit	521		365		1,036		715		423		521		876		1,036
Selling, general and administrative expenses	(136	)	(117	)	(283	)	(220	)	(118	)	(136	)	(238	)	(283	)
Amortization of intangible assets	(7	)	(5	)	(13	)	(9	)	(6	)	(7	)	(12	)	(13	)
Research and development expenses	(18	)	(17	)	(36	)	(34	)	(17	)	(18	)	(33	)	(36	)
Other (charges) gains, net	(3	)	(2	)	(3	)	(57	)	(98	)	(3	)	(94	)	(3	)
Foreign exchange gain (loss), net	3		(4	)	2		(4	)	1		3		6		2
Gain (loss) on disposition of businesses and assets, net	(2	)	(2	)	(2	)	(3	)	1		(2	)	1		(2	)
Operating profit (loss)	358		218		701		388		186		358		506		701
Equity in net earnings (loss) of affiliates	56		38		114		85		39		56		89		114
Non-operating pension and other postretirement employee benefit (expense) income	26		22		52		44		17		26		34		52
Interest expense	(32	)	(30	)	(65	)	(59	)	(29	)	(32	)	(60	)	(65	)
Refinancing expense									(4	)	—		(4	)	—
Interest income	—		1		2		1		2		—		3		2
Dividend income - cost investments	34		29		66		58
Dividend income - equity investments									30		34		62		66
Other income (expense), net	—		3		4		4		(2	)	—		(6	)	4
Earnings (loss) from continuing operations before tax	442		281		874		521		239		442		624		874
Income tax (provision) benefit	(97	)	(40	)	(162	)	(96	)	(28	)	(97	)	(74	)	(162	)
Earnings (loss) from continuing operations	345		241		712		425		211		345		550		712
Earnings (loss) from operation of discontinued operations	—		(9	)	(2	)	(9	)	(2	)	—		(3	)	(2	)
Income tax (provision) benefit from discontinued operations	—		1		—		1		1		—		1		—
Earnings (loss) from discontinued operations	—		(8	)	(2	)	(8	)	(1	)	—		(2	)	(2	)
Net earnings (loss)	345		233		710		417		210		345		548		710
Net (earnings) loss attributable to noncontrolling interests	(1	)	(2	)	(3	)	(3	)	(1	)	(1	)	(2	)	(3	)
Net earnings (loss) attributable to Celanese Corporation	344		231		707		414		209		344		546		707
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	344		239		709		422		210		344		548		709
Earnings (loss) from discontinued operations	—		(8	)	(2	)	(8	)	(1	)	—		(2	)	(2	)
Net earnings (loss)	344		231		707		414		209		344		546		707
Earnings (loss) per common share - basic
Continuing operations	2.54		1.73		5.22		3.02		1.68		2.54		4.33		5.22
Discontinued operations	—		(0.06	)	(0.01	)	(0.05	)	(0.01	)	—		(0.01	)	(0.01	)
Net earnings (loss) - basic	2.54		1.67		5.21		2.97		1.67		2.54		4.32		5.21
Earnings (loss) per common share - diluted
Continuing operations	2.52		1.72		5.19		3.01		1.67		2.52		4.31		5.19
Discontinued operations	—		(0.06	)	(0.01	)	(0.05	)	(0.01	)	—		(0.01	)	(0.01	)
Net earnings (loss) - diluted	2.52		1.66		5.18		2.96		1.66		2.52		4.30		5.18
Weighted average shares - basic	135,589,717		138,619,721		135,752,179		139,626,199		125,289,967		135,589,717		126,409,926		135,752,179
Weighted average shares - diluted	136,309,158		139,029,425		136,499,748		140,022,556		125,847,894		136,309,158		127,111,046		136,499,748

See the accompanying notes to the unaudited interim consolidated financial statements.

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (LOSS)


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017		2019		2018		2019		2018
	(In $ millions)								(In $ millions)
Net earnings (loss)	345		233		710		417		210		345		548		710
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on marketable securities	—		1		—		1
Foreign currency translation	(66	)	78		(17	)	106
Foreign currency translation gain (loss)									(11	)	(66	)	(4	)	(17	)
Gain (loss) on cash flow hedges	6		1		5		(1	)	(13	)	6		(16	)	5
Pension and postretirement benefits	—		—		1		5
Pension and postretirement benefits gain (loss)									—		—		—		1
Total other comprehensive income (loss), net of tax	(60	)	80		(11	)	111		(24	)	(60	)	(20	)	(11	)
Total comprehensive income (loss), net of tax	285		313		699		528		186		285		528		699
Comprehensive (income) loss attributable to noncontrolling interests	(1	)	(2	)	(3	)	(3	)	(1	)	(1	)	(2	)	(3	)
Comprehensive income (loss) attributable to Celanese Corporation	284		311		696		525		185		284		526		696

See the accompanying notes to the unaudited interim consolidated financial statements.

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS


	As of June 30, 2018		As of December 31, 2017		As of June 30, 2019		As of December 31, 2018
	(In $ millions, except share data)				(In $ millions, except share data)
ASSETS
Current Assets
Cash and cash equivalents (variable interest entity restricted - 2018: $18; 2017: $19)	708		576
Trade receivables - third party and affiliates (net of allowance for doubtful accounts - 2018: $10; 2017: $9; variable interest entity restricted - 2018: $8; 2017: $5)	1,156		986
Cash and cash equivalents (variable interest entity restricted - 2019: $29; 2018: $24)					491		439
Trade receivables - third party and affiliates (net of allowance for doubtful accounts - 2019: $9; 2018: $10; variable interest entity restricted - 2019: $5; 2018: $6)					971		1,017
Non-trade receivables, net	289		244		332		301
Inventories	917		900		1,011		1,046
Marketable securities, at fair value	32		32		27		31
Other assets	51		54		44		40
Total current assets	3,153		2,792		2,876		2,874
Investments in affiliates	963		976		959		979
Property, plant and equipment (net of accumulated depreciation - 2018: $2,696; 2017: $2,584; variable interest entity restricted - 2018: $676; 2017: $697)	3,724		3,762
Property, plant and equipment (net of accumulated depreciation - 2019: $2,828; 2018: $2,803; variable interest entity restricted - 2019: $641; 2018: $659)					3,642		3,719
Operating lease right-of-use assets					209		—
Deferred income taxes	163		366		90		84
Other assets (variable interest entity restricted - 2018: $6; 2017: $6)	392		338
Other assets (variable interest entity restricted - 2019: $3; 2018: $5)					320		290
Goodwill	1,069		1,003		1,083		1,057
Intangible assets (variable interest entity restricted - 2018: $24; 2017: $25)	325		301
Intangible assets (variable interest entity restricted - 2019: $23; 2018: $23)					327		310
Total assets	9,789		9,538		9,506		9,313
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	366		326		319		561
Trade payables - third party and affiliates	819		807		764		819
Other liabilities	314		354		302		343
Income taxes payable	111		72		23		56
Total current liabilities	1,610		1,559		1,408		1,779
Long-term debt, net of unamortized deferred financing costs	3,228		3,315		3,444		2,970
Deferred income taxes	248		211		265		255
Uncertain tax positions	149		156		171		158
Benefit obligations	557		585		545		564
Operating lease liabilities					192		—
Other liabilities	210		413		227		208
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.01 par value, 100,000,000 shares authorized (2018 and 2017: 0 issued and outstanding)	—		—
Series A common stock, $0.0001 par value, 400,000,000 shares authorized (2018: 168,294,244 issued and 135,018,148 outstanding; 2017: 168,156,969 issued and 135,769,256 outstanding)	—		—
Treasury stock, at cost (2018: 33,276,096 shares; 2017: 32,387,713 shares)	(2,131	)	(2,031	)
Preferred stock, $0.01 par value, 100,000,000 shares authorized (2019 and 2018: 0 issued and outstanding)					—		—
Common stock, $0.0001 par value, 400,000,000 shares authorized (2019: 168,910,831 issued and 123,740,349 outstanding; 2018: 168,418,954 issued and 128,095,849 outstanding)					—		—
Treasury stock, at cost (2019: 45,170,482 shares; 2018: 40,323,105 shares)					(3,347	)	(2,849	)
Additional paid-in capital	208		175		233		233
Retained earnings	5,491		4,920		6,245		5,847
Accumulated other comprehensive income (loss), net	(188	)	(177	)	(267	)	(247	)
Total Celanese Corporation stockholders' equity	3,380		2,887		2,864		2,984
Noncontrolling interests	407		412		390		395
Total equity	3,787		3,299		3,254		3,379
Total liabilities and equity	9,789		9,538		9,506		9,313

See the accompanying notes to the unaudited interim consolidated financial statements.

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY


	Six Months Ended June 30, 2018				Three Months Ended June 30,
	Shares		Amount		2019				2018
	(In $ millions, except share data)				Shares		Amount		Shares		Amount
Series A Common Stock
					(In $ millions, except share data)
Common Stock
Balance as of the beginning of the period	135,769,256		—		126,612,492		—		135,855,710		—
Stock option exercises	—		—		4,108		—		—		—
Purchases of treasury stock	(888,383	)	—		(2,917,864	)	—		(888,383	)	—
Stock awards	137,275		—		41,613		—		50,821		—
Balance as of the end of the period	135,018,148		—		123,740,349		—		135,018,148		—
Treasury Stock
Balance as of the beginning of the period	32,387,713		(2,031	)	42,285,459		(3,048	)	32,387,713		(2,031	)
Purchases of treasury stock, including related fees	888,383		(100	)	2,917,864		(300	)	888,383		(100	)
Issuance of treasury stock under stock plans					(32,841	)	1		—		—
Balance as of the end of the period	33,276,096		(2,131	)	45,170,482		(3,347	)	33,276,096		(2,131	)
Additional Paid-In Capital
Balance as of the beginning of the period			175				224				192
Stock-based compensation, net of tax			33				9				16
Stock option exercises, net of tax							—				—
Balance as of the end of the period			208				233				208
Retained Earnings
Balance as of the beginning of the period			4,920				6,114				5,220
Net earnings (loss) attributable to Celanese Corporation			707				209				344
Series A common stock dividends			(136	)
Common stock dividends							(78	)			(73	)
Balance as of the end of the period			5,491				6,245				5,491
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period			(177	)			(243	)			(128	)
Other comprehensive income (loss), net of tax			(11	)			(24	)			(60	)
Balance as of the end of the period			(188	)			(267	)			(188	)
Total Celanese Corporation stockholders' equity			3,380				2,864				3,380
Noncontrolling Interests
Balance as of the beginning of the period			412				392				412
Net earnings (loss) attributable to noncontrolling interests			3				1				1
(Distributions to) contributions from noncontrolling interests			(8	)			(3	)			(6	)
Balance as of the end of the period			407				390				407
Total equity			3,787				3,254				3,787

See the accompanying notes to the unaudited interim consolidated financial statements.

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF EQUITY



	Six Months Ended June 30,
	2019				2018
	Shares		Amount		Shares		Amount
	(In $ millions, except share data)
Common Stock
Balance as of the beginning of the period	128,095,849		—		135,769,256		—
Stock option exercises	14,045		—		—		—
Purchases of treasury stock	(4,890,155	)	—		(888,383	)	—
Stock awards	520,610		—		137,275		—
Balance as of the end of the period	123,740,349		—		135,018,148		—
Treasury Stock
Balance as of the beginning of the period	40,323,105		(2,849	)	32,387,713		(2,031	)
Purchases of treasury stock, including related fees	4,890,155		(500	)	888,383		(100	)
Issuance of treasury stock under stock plans	(42,778	)	2		—		—
Balance as of the end of the period	45,170,482		(3,347	)	33,276,096		(2,131	)
Additional Paid-In Capital
Balance as of the beginning of the period			233				175
Stock-based compensation, net of tax			1				33
Stock option exercises, net of tax			(1	)			—
Balance as of the end of the period			233				208
Retained Earnings
Balance as of the beginning of the period			5,847				4,920
Net earnings (loss) attributable to Celanese Corporation			546				707
Common stock dividends			(148	)			(136	)
Balance as of the end of the period			6,245				5,491
Accumulated Other Comprehensive Income (Loss), Net
Balance as of the beginning of the period			(247	)			(177	)
Other comprehensive income (loss), net of tax			(20	)			(11	)
Balance as of the end of the period			(267	)			(188	)
Total Celanese Corporation stockholders' equity			2,864				3,380
Noncontrolling Interests
Balance as of the beginning of the period			395				412
Net earnings (loss) attributable to noncontrolling interests			2				3
(Distributions to) contributions from noncontrolling interests			(7	)			(8	)
Balance as of the end of the period			390				407
Total equity			3,254				3,787

See the accompanying notes to the unaudited interim consolidated financial statements.

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2019		2018
	(In $ millions)				(In $ millions)
Operating Activities
Net earnings (loss)	710		417		548		710
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities
Asset impairments					83		—
Depreciation, amortization and accretion	168		149		170		168
Pension and postretirement net periodic benefit cost	(46	)	(40	)	(30	)	(46	)
Pension and postretirement contributions	(24	)	(24	)	(24	)	(24	)
Deferred income taxes, net	55		4		(17	)	55
(Gain) loss on disposition of businesses and assets, net	3		3		1		3
Stock-based compensation	39		19		27		39
Undistributed earnings in unconsolidated affiliates	3		25		22		3
Other, net	10		6		13		10
Operating cash provided by (used in) discontinued operations	(1	)	6		—		(1	)
Changes in operating assets and liabilities
Trade receivables - third party and affiliates, net	(175	)	(133	)	52		(175	)
Inventories	(17	)	11		39		(17	)
Other assets	(39	)	1		(21	)	(39	)
Trade payables - third party and affiliates	36		33		(51	)	36
Other liabilities	6		13		(81	)	6
Net cash provided by (used in) operating activities	728		490		731		728
Investing Activities
Capital expenditures on property, plant and equipment	(165	)	(116	)	(144	)	(165	)
Acquisitions, net of cash acquired	(144	)	(268	)	(91	)	(144	)
Proceeds from sale of businesses and assets, net	9		1		—		9
Other, net	(31	)	(6	)	(8	)	(31	)
Net cash provided by (used in) investing activities	(331	)	(389	)	(243	)	(331	)
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less	40		202		105		40
Proceeds from short-term borrowings	36		104		—		36
Repayments of short-term borrowings	(39	)	(55	)	(12	)	(39	)
Proceeds from long-term debt					499		—
Repayments of long-term debt	(43	)	(58	)	(348	)	(43	)
Purchases of treasury stock, including related fees	(100	)	(300	)	(488	)	(100	)
Stock option exercises	—		1		—		—
Series A common stock dividends	(136	)	(116	)
Common stock dividends					(148	)	(136	)
(Distributions to) contributions from noncontrolling interests	(8	)	(8	)	(7	)	(8	)
Other, net	(6	)	(19	)	(38	)	(6	)
Net cash provided by (used in) financing activities	(256	)	(249	)	(437	)	(256	)
Exchange rate effects on cash and cash equivalents	(9	)	21		1		(9	)
Net increase (decrease) in cash and cash equivalents	132		(127	)	52		132
Cash and cash equivalents as of beginning of period	576		638		439		576
Cash and cash equivalents as of end of period	708		511		491		708

See the accompanying notes to the unaudited interim consolidated financial statements.

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

NOTES TO THE UNAUDITED INTERIM 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 ~~technology~~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 ~~business involves processing~~broad product portfolio serves a diverse set of end-use applications including automotive, chemical ~~raw materials, such as methanol, carbon monoxide~~additives, construction, consumer and ~~ethylene,~~industrial adhesives, consumer and ~~natural products, including wood pulp, into value-added chemicals, thermoplastic polymers~~medical, energy storage, filtration, food and ~~other chemical-based products.~~beverage, paints and coatings, paper and packaging, performance industrial and textiles.

Definitions

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 term "Celanese US" refers to the Company's subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.

Basis of Presentation

The unaudited interim consolidated financial statements for the three and six months endedJune 30, ~~2018~~2019 and ~~2017~~2018 contained in this Quarterly Report were prepared in accordance with accounting principles generally accepted in the United States of America ("US 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 unaudited interim consolidated financial statements and other financial information included in this Quarterly Report, unless otherwise specified, have been presented to separately show the effects of discontinued operations.

In the opinion of management, the accompanying unaudited consolidated balance sheets and related unaudited interim consolidated statements of operations, comprehensive income (loss), cash flows and equity include all adjustments, consisting only of normal recurring items necessary for their fair presentation in conformity with US GAAP. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission ("SEC"). These unaudited interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements as of and for the year ended December 31, ~~2017~~2018, filed on February ~~9, 2018~~7, 2019 with the SEC as part of the Company's Annual Report on Form 10-K.

Operating results for the three and six months endedJune 30, ~~2018~~2019 are not necessarily indicative of the results to be expected for the entire year.

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 Quarterly Report.

For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as noncontrolling interests.

During the three months ended March 31, 2018, the Company settled its dispute concerning the exercise of an option right by a partner in two of the Company's InfraServ equity affiliate investments. As a result of the settlement, the Company's ownership in InfraServ GmbH & Co. Gendorf KG and InfraServ GmbH & Co. Knapsack KG was reduced from 39% and 27%, to 30% and 22%, respectively.

The Company has reclassified certain prior period amounts ~~primarily due to (1) the adoption of ASU 2017-07 (defined below in~~ ~~Note 2) and (2)~~ to conform to the presentation of the Company's current reportable ~~segments (Note 19~~).segments.

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Estimates and Assumptions

The preparation of unaudited interim consolidated financial statements in conformity with US 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 unaudited interim 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.

2. Recent Accounting Pronouncements

The following table provides a brief description of recent Accounting Standard Updates ("ASU") issued by the Financial Accounting Standards Board ("FASB"):



Standard	Description	Effective Date	Effect on the Financial Statements or Other Significant Matters

In August 2018, the FASB issued ASU 2018-14, Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans.	The new guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing disclosures that no longer are considered cost beneficial, clarifying the specific requirements of disclosures and adding disclosure requirements identified as relevant.	January 1, 2020. Early adoption is permitted.	The Company is currently evaluating the impact of adoption on its financial statements and related disclosures.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.	The new guidance allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users.	January 1, 2019.	The Company adopted the new guidance effective January 1, 2019. The adoption of the new guidance did not have a material impact on the Company.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-13.	The new guidance requires financial instruments measured at amortized cost basis to be presented at the net amount expected to be collected through application of the current expected credit losses model. The model requires an estimate of the credit losses expected over the life of an exposure or pool of exposures. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period.	January 1, 2020. Early adoption is permitted.	The Company is currently evaluating the impact of adoption on its financial statements and related disclosures.

~~In August 2017, the FASB issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities.~~	The new guidance improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.	~~January 1, 2019. Early adoption is permitted.~~	~~The Company adopted the new guidance effective January 1, 2018, as part of the FASB's simplification initiative. The adoption of the new guidance did not have a material impact to the Company.~~

~~In March 2017, the FASB issued ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~	~~The new guidance clarifies the presentation and classification of the components of net periodic benefit costs in the consolidated statement of operations.~~	~~January 1, 2018.~~	~~The Company adopted the new guidance effective January 1, 2018, using the retrospective transition method, as part of the FASB's simplification initiative. See~~ ~~Adoption of ASU 2017-07~~ ~~section below for additional information.~~

~~In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory.~~	The new guidance requires the income tax consequences of an intra-entity transfer of assets other than inventory to be recognized when the transfer occurs rather than deferring until an outside sale has occurred.	~~January 1, 2018.~~	~~The Company adopted the new guidance effective January 1, 2018, as part of the FASB's simplification initiative. The adoption of the new guidance did not have a material impact to the Company.~~

~~In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments.~~	~~The new guidance clarifies the presentation and classification of certain cash receipts and cash payments in the statement of cash flows.~~	~~January 1, 2018.~~	~~The Company adopted the new guidance effective January 1, 2018, as part of the FASB's simplification initiative. The adoption of the new guidance did not have a material impact to the Company.~~

In February 2016, the FASB issued ASU 2016-02, Leases. Since that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2016-02.	The new guidance supersedes the lease guidance under FASB Accounting Standards Codification ("ASC") Topic 840, Leases, resulting in the creation of FASB ASC Topic 842, Leases. The guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. Subsequent guidance issued after February 2016 did not change the core principle of ASU 2016-02.	January 1, 2019. ~~Early adoption is permitted.~~	The Company is currently evaluating its population of leases, and is continuing to assess all potential impacts of the standard, but currently believes the most significant impact relates to its accounting for manufacturing and logistics equipment, and real estate operating leases. The Company anticipates recognition of additional assets and corresponding liabilities related to leases upon adoption, but has not yet quantified these at this time. The Company plans to adopt the standard effective January 1, 2019, utilizing the modified retrospective transition method.

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~~Standard~~	~~Description~~	~~Effective Date~~	~~Effect on the Financial Statements or Other Significant Matters~~

~~In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.~~	~~The new guidance updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments.~~	~~January 1, 2018.~~	The Company adopted the new guidance effective January 1, ~~2018,~~2019, using the modified retrospective ~~approach, as part of~~transition method, which did not require the ~~FASB's simplification initiative. The new guidance resulted in a cumulative-effect adjustment of less than $1 million~~Company to ~~January 1, 2018 Retained earnings.~~

~~In May 2014,~~adjust comparative periods. See the ~~FASB issued ASU 2014-09, Revenue from Contracts with Customers. Since that date, the FASB has issued additional ASUs clarifying certain aspects~~Adoption of ASU ~~2014-09.~~	The new guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange2016-02 section below for ~~those goods or services. The new guidance provides alternative methods of adoption. Subsequent guidance issued after May 2014 did not change the core principle of ASU 2014-09.~~	~~January 1, 2018.~~	The Company adopted the new guidance effective January 1, 2018, using the modified retrospective approach, as part of the FASB's simplification initiative. The adoption of the new guidance resulted in less than $1 million impact to the consolidated financial statements and related disclosures (See ~~Note 20~~).additional information.

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Adoption of ASU ~~2017-07~~2016-02, Leases

ASU 2017-07 requires an entity to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside a subtotal of Operating profit (loss). The new guidance represents a change in accounting principle. The Company adopted ASU ~~2017-07 on~~2016-02 as of January 1, ~~2018~~2019, using the modified retrospective approach. Prior period amounts have not been adjusted. In addition, the Company elected the following practical expedients:

the package of practical expedients permitted under the transition ~~method.~~ guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification;

the land easements practical expedient, which allowed the Company to carry forward the accounting treatment for land easements on existing agreements;

the short-term lease practical expedient, which allowed the Company to exclude short-term leases from recognition in the unaudited consolidated balance sheets; and

the bifurcation of lease and non-lease components practical expedient, which did not require the Company to bifurcate lease and non-lease components for all classes of assets.

The adoption of this accounting standard resulted in ~~a change in certain previously reported amounts,~~the recording of Operating lease right-of-use ("ROU") assets and Operating lease liabilities of $223 million and $240 million, respectively, as ~~follows:~~

Three Months Ended June 30, 2017
As previously reported Adoption of ASU 2017-07 As Adjusted
(In $ millions)
Cost of sales (1,143 ) (2 ) (1,145 )
Selling, general and administrative expenses (96 ) (21 ) (117 )
Other (charges) gains, net (3 ) 1
(2 )
Operating profit (loss) 240
(22 ) 218
Non-operating pension and other postretirement employee benefit (expense) income —
22
22

Six Months Ended June 30, 2017
As previously reported Adoption of ASU 2017-07 As Adjusted
(In $ millions)
Cost of sales (2,262 ) (4 ) (2,266 )
Selling, general and administrative expenses (179 ) (41 ) (220 )
Other (charges) gains, net (58 ) 1
(57 )
Operating profit (loss) 432
(44 ) 388
Non-operating pension and other postretirement employee benefit (expense) income —
44
44

of January 1, 2019. The difference between the operating lease assets and liabilities was recorded as an adjustment to Other liabilities, primarily related to deferred rent (lease incentives). The adoption of ~~this accounting standard~~ASU 2016-02 had no impact on ~~the previously reported Earnings (loss) from continuing operations or Net earnings (loss)~~Retained earnings.

See Note 16 for ~~this period.~~additional information.

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3. Acquisitions, Dispositions and Plant Closures

~~Acquisitions~~

~~Omni Plastics~~

On February 1, 2018, using cash on hand and borrowings under the Company's senior unsecured revolving credit facility, the Company acquired 100% of the ownership interests of Omni Plastics, L.L.C. and its subsidiaries ("Omni Plastics"). Omni Plastics specializes in custom compounding of various engineered thermoplastic materials. The acquisition further strengthens the Company's global asset base by adding compounding capacity in the Americas. The acquisition was accounted for as a business combination and the acquired operations are included in the Engineered Materials segment.

Pro forma financial information since the respective acquisition date has not been provided as the acquisition did not have a material impact on the Company's financial information. 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 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 were determined based on Level 3 inputsincluding 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 is 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 final fair value of the net assets acquired may result in adjustments to the 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 Omni Plastics acquisition is as follows:~~



	~~As of~~ ~~February 1, 2018~~
	~~(In $ millions)~~
~~Cash and cash equivalents~~	2
~~Trade receivables - third party and affiliates~~	12
~~Inventories~~	13
~~Property, plant and equipment, net~~	19
~~Intangible assets (Note 7~~)	35
~~Goodwill~~⁽¹⁾(~~Note 7~~)	84
~~Other assets~~	1
~~Total fair value of assets acquired~~	~~166~~

~~Trade payables - third party and affiliates~~	(8	)
~~Total debt~~	~~(12~~	)
~~Total fair value of liabilities assumed~~	~~(20~~	)
~~Net assets acquired~~	~~146~~


⁽¹⁾	~~Goodwill consists of expected revenue and operating synergies resulting from the acquisition, all of which is deductible for income tax purposes.~~

The amount of pro forma Net earnings (loss) of Omni Plastics included in the Company's unaudited interim consolidated statement of operations was less than 1% (unaudited) of its consolidated Net earnings (loss) had the acquisition occurred as of the beginning of 2018. The amount of Omni Plastics' Net earnings (loss) consolidated by the Company since the acquisition date was not material.

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~~Acetate Tow Joint Venture~~

In June 2017, Celanese, through various subsidiaries, entered into an agreement with affiliates of The Blackstone Group L.P. (the "Blackstone Entities") to form a joint venture which would combine substantially all of the operations of the Company's cellulose derivatives business and the operations of the Rhodia Acetow cellulose acetate business formerly operated by Solvay S.A. and acquired by the Blackstone Entities in June 2017. The parties were subsequently unable to reach an agreement with the European Commission on acceptable conditions to allow the proposed joint venture to proceed. The demands by the European Commission eliminated the advantages at the heart of the transaction. As a result, on March 19, 2018, the Company and the Blackstone Entities abandoned their agreement to form the proposed joint venture.

~~Nilit Plastics~~

In May 2017, using cash on hand and borrowings under the Company's senior unsecured revolving credit facility, the Company acquired the nylon compounding division of Nilit Group ("Nilit"), an independent producer of high performance nylon resins, fibers and compounds. Celanese acquired the nylon compounding product portfolio, customer agreements and manufacturing, technology and commercial facilities. The acquisition of Nilit increases the Company's global engineered materials product platforms, extends the operational model, technical and industry solutions capabilities and expands project pipelines. 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 on preliminary information. During the measurement period, the Company made certain adjustments to its purchase price allocation to adjust taxes and working capital, which resulted in a $2 million reduction to goodwill initially recorded.

Plant Closures

Ocotlán, Mexico

On June ~~6, 2018,~~28, 2019, the Company announced ~~the consolidation of~~it will consolidate its global acetate manufacturing ~~operations by initiating~~capabilities with the closure of its acetate ~~tow~~flake manufacturing ~~unit~~operations in Ocotlán, ~~Mexico in 2018. The acetate flake unit will remain operational and is unaffected by these actions.~~Mexico. The Ocotlán, Mexico operations are included in the Company's Acetate Tow segment.

The exit ~~costs~~ and shutdown costs related to ~~the~~this closure ~~of the Ocotlán, Mexico acetate tow manufacturing unit (Note 14~~) are as follows:



	Three Months Ended June 30, ~~2018~~2019
	(In $ millions)
~~Restructuring~~Asset impairments⁽¹⁾	83
Restructuring⁽¹⁾	1
Accelerated depreciation expense	3
~~Loss on disposition of assets, net~~	1
Total	585

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⁽¹⁾	Included in Other (charges) gains, net in the ~~unaudited interim~~ consolidated statement of ~~operations.~~operations (Note 18).

The Company expects to incur additional exit and shutdown costs of approximately ~~$16~~$20 million, primarily related to employee termination benefits and accelerated depreciation, through the ~~remainder~~first quarter of ~~2018.~~2020.

4. Ventures and Variable Interest Entities

Consolidated Variable Interest Entities

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. The methanol unit utilizes natural gas in the US Gulf Coast region as a feedstock and benefits from the existing infrastructure at the Company's Clear Lake facility. Both Mitsui and the Company supply their own natural gas to Fairway in exchange for methanol tolling under a cost-plus off-take arrangement.

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The Company determined that Fairway is a variable interest entity ("VIE") in which the Company is the primary beneficiary. Under the terms of the joint venture agreements, the Company provides site services and day-to-day operations for the methanol facility. In addition, the joint venture agreements provide that the Company indemnifies Mitsui for environmental obligations that exceed a specified threshold, as well as an equity option between the partners. 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 ~~Intermediates~~Chain segment.

The carrying amount of the assets and liabilities associated with Fairway included in the unaudited consolidated balance sheets are as follows:


	As of June 30, 2018	As of December 31, 2017	As of June 30, 2019	As of December 31, 2018
	(In $ millions)		(In $ millions)
Cash and cash equivalents	18	19	29	24
Trade receivables, net - third party and affiliate	15	9
Property, plant and equipment (net of accumulated depreciation - 2018: $110; 2017: $90)	676	697
Intangible assets (net of accumulated amortization - 2018: $3; 2017: $2)	24	25
Trade receivables, net - third party and affiliates			10	11
Property, plant and equipment (net of accumulated depreciation - 2019: $151; 2018: $130)			641	659
Intangible assets (net of accumulated amortization - 2019: $4; 2018: $3)			23	23
Other assets	6	6	3	5
Total assets⁽¹⁾	739	756	706	722

Trade payables	9	16	11	16
Other liabilities⁽²⁾	5	4	3	4
Total debt	5	5	4	5
Deferred income taxes	3	3	4	3
Total liabilities	22	28	22	28

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⁽¹⁾	Assets can only be used to settle the obligations of Fairway.


⁽²⁾	Primarily represents amounts owed by Fairway to the Company for reimbursement of expenditures.

Nonconsolidated Variable Interest Entities

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 ~~capital~~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 June 30, ~~2018,~~2019, relates primarily to the recovery of capital expenditures for certain property, plant and equipment.

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The carrying amount of the assets and liabilities associated with the obligations to nonconsolidated VIEs, as well as the maximum exposure to loss relating to these nonconsolidated VIEs are as follows:


	As of June 30, 2018	As of December 31, 2017	As of June 30, 2019	As of December 31, 2018
	(In $ millions)		(In $ millions)
Property, plant and equipment, net	48	53	37	42

Trade payables	36	25	28	27
Current installments of long-term debt	14	18	15	14
Long-term debt	68	76	50	58
Total liabilities	118	119	93	99

Maximum exposure to loss	160	164	124	134

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The difference between the total liabilities associated with obligations to nonconsolidated VIEs and the maximum exposure to loss primarily represents take-or-pay obligations for services included in the Company's unconditional purchase obligations (Note 1819).

5. Marketable Securities ~~at Fair Value~~

The Company's nonqualified trusts hold available-for-sale securities for funding requirements of the Company's nonqualified pension ~~plans (Note 11~~)plans. Available-for-sale securities as ~~follows:~~

As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Amortized cost 32
32
Gross unrealized gain —
—
Gross unrealized loss —
—
Fair value 32
32
of June 30, 2019 and December 31, 2018 were $27 million and $31 million, respectively, and were recorded at amortized cost, which approximates fair value.

6. Inventories



	As of June 30, 2019	As of December 31, 2018
	(In $ millions)
Finished goods	688	697
Work-in-process	73	70
Raw materials and supplies	250	279
Total	1,011	1,046

As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Finished goods 597
591
Work-in-process 60
57
Raw materials and supplies 260
252
Total 917
900

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7. Goodwill and Intangible Assets, Net

Goodwill

Engineered
Materials
Acetate Tow
Industrial
Specialties

Acetyl
Intermediates
Total
(In $ millions)
As of December 31, 2017 643
149
40
171
1,003
Acquisitions (Note 3)
84
—
—
—
84
Exchange rate changes (13 ) —
—
(5 ) (18 )
As of June 30, 2018⁽¹⁾
714
149
40
166
1,069



	Engineered Materials			Acetate Tow	Acetyl Chain		Total
	(In $ millions)
As of December 31, 2018	707			148	202		1,057
Acquisitions	29		⁽¹⁾	—	—		29
Exchange rate changes	(2	)		—	(1	)	(3	)
As of June 30, 2019⁽²⁾	734			148	201		1,083

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⁽¹⁾	Represents goodwill related to the acquisition of Next Polymers Ltd.


⁽²⁾	There were $0 million of accumulated impairment losses as of June 30, ~~2018~~2019.

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Intangible Assets, Net

Finite-lived intangible assets are as follows:


	Licenses			Customer- Related Intangible Assets		Developed Technology		Covenants Not to Compete and Other		Total			Licenses		Customer- Related Intangible Assets		Developed Technology		Covenants Not to Compete and Other		Total
	(In $ millions)												(In $ millions)
Gross Asset Value
As of December 31, 2017	38			640		45		54		777
Acquisitions (Note 3)	—			32		—		3		35		⁽¹⁾
Renewals	6		⁽²⁾	—		—		—		6
As of December 31, 2018													42		651		44		56		793
Acquisitions													—		25		—		—		25		⁽¹⁾
Exchange rate changes	(1	)		(13	)	—		—		(14	)		—		(2	)	—		—		(2	)
As of June 30, 2018	43			659		45		57		804
As of June 30, 2019													42		674		44		56		816
Accumulated Amortization
As of December 31, 2017	(33	)		(496	)	(30	)	(32	)	(591	)
As of December 31, 2018													(33	)	(495	)	(32	)	(35	)	(595	)
Amortization	(1	)		(8	)	(2	)	(2	)	(13	)		(1	)	(8	)	(2	)	(1	)	(12	)
Exchange rate changes	1			12		(1	)	—		12			—		2		—		—		2
As of June 30, 2018	(33	)		(492	)	(33	)	(34	)	(592	)
As of June 30, 2019													(34	)	(501	)	(34	)	(36	)	(605	)
Net book value	10			167		12		23		212			8		173		10		20		211

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⁽¹⁾	Represents intangible assets acquired related to ~~Omni Plastics (Note 3~~)Next Polymers Ltd. with a weighted average amortization period of ~~11 years.~~


⁽²⁾	~~During the three months ended June 30, 2018, the Company extended an exclusive acetyls research and development technology agreement license, which will be amortized over a period of 5~~13 years.

Indefinite-lived intangible assets are as follows:



	Trademarks and Trade Names
	(In $ millions)
As of December 31, ~~2017~~2018	~~115~~112
Acquisitions (~~Note 3~~)	—4
Accumulated impairment losses	—
Exchange rate changes	(2—	)
As of June 30, ~~2018~~2019	~~113~~116

15For the six months ended June 30, 2019, the Company did not renew or extend any intangible assets.

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Estimated amortization expense for the succeeding five fiscal years is as follows:



	(In $ millions)
2020	22
2021	21
2022	19
2023	17
2024	15

(In $ millions)
2019 22
2020 20
2021 19
2022 17
2023 14

~~8. Current Other Liabilities~~

As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Asset retirement obligations 3
19
Benefit obligations (Note 11)
30
30
Customer rebates (Note 20)
52
65
Derivatives (Note 16)
6
3
Environmental (Note 12)
18
14
Insurance 5
5
Interest 24
17
Restructuring (Note 14)
7
5
Salaries and benefits 93
113
Sales and use tax/foreign withholding tax payable 34
16
Other 42
67
Total 314
354

~~9. Noncurrent Other Liabilities~~

As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Asset retirement obligations 14
7
Deferred proceeds 46
47
Deferred revenue (Note 20)
6
6
Environmental (Note 12)
53
59
Income taxes payable —
197
Insurance 43
43
Other 48
54
Total 210
413

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8. Current Other Liabilities



	As of June 30, 2019	As of December 31, 2018
	(In $ millions)
Asset retirement obligations	7	3
Benefit obligations (Note 11)	30	30
Customer rebates (Note 21)	47	76
Derivatives (Note 17)	3	7
Environmental (Note 12)	16	20
Insurance	4	4
Interest	26	21
Operating leases (Note 16)	31	—
Restructuring (Note 14)	15	4
Salaries and benefits	69	119
Sales and use tax/foreign withholding tax payable	17	22
Other	37	37
Total	302	343

9. Noncurrent Other Liabilities



	As of June 30, 2019	As of December 31, 2018
	(In $ millions)
Asset retirement obligations	14	13
Deferred proceeds	44	44
Deferred revenue (Note 21)	7	7
Derivatives (Note 17)	42	11
Environmental (Note 12)	49	49
Insurance	41	37
Other	30	47
Total	227	208

10. Debt


	As of June 30, 2018	As of December 31, 2017	As of June 30, 2019	As of December 31, 2018
	(In $ millions)		(In $ millions)
Short-Term Borrowings and Current Installments of Long-Term Debt - Third Party and Affiliates
Current installments of long-term debt	68	63	26	367
Short-term borrowings, including amounts due to affiliates⁽¹⁾	96	86	68	77
Revolving credit facility⁽²⁾	125	97	148	40
Accounts receivable securitization facility⁽³⁾	77	80	77	77
Total	366	326	319	561

______________________________


⁽¹⁾	The weighted average interest rate was ~~3.5%~~2.9% and ~~3.4%~~3.2% as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.


⁽²⁾	The weighted average interest rate was ~~3.5%~~1.3% and ~~4.1%~~6.0% as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.


⁽³⁾	The weighted average interest rate was ~~2.8%~~3.3% and ~~2.1%~~3.1% as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.

As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Long-Term Debt
Senior unsecured term loan due 2021⁽¹⁾
481
494
Senior unsecured notes due 2019, interest rate of 3.250% 349
360
Senior unsecured notes due 2021, interest rate of 5.875% 400
400
Senior unsecured notes due 2022, interest rate of 4.625% 500
500
Senior unsecured notes due 2023, interest rate of 1.125% 872
897
Senior unsecured notes due 2025, interest rate of 1.250% 349
359
Pollution control and industrial revenue bonds due at various dates through 2030, interest rates ranging from 4.05% to 5.00% 169
169
Nilit bank loans due at various dates through 2026⁽²⁾
11
11
Obligations under capital leases due at various dates through 2054 182
208
Subtotal 3,313
3,398
Unamortized debt issuance costs⁽³⁾
(17 ) (20 )
Current installments of long-term debt (68 ) (63 )
Total 3,228
3,315

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	As of June 30, 2019		As of December 31, 2018
	(In $ millions)
Long-Term Debt
Senior unsecured notes due 2019, interest rate of 3.250%	—		343
Senior unsecured notes due 2021, interest rate of 5.875%	400		400
Senior unsecured notes due 2022, interest rate of 4.625%	500		500
Senior unsecured notes due 2023, interest rate of 1.125%	852		857
Senior unsecured notes due 2024, interest rate of 3.500%	499		—
Senior unsecured notes due 2025, interest rate of 1.250%	341		343
Senior unsecured notes due 2027, interest rate of 2.125%	565		568
Pollution control and industrial revenue bonds due at various dates through 2030, interest rates ranging from 4.05% to 5.00%	167		167
Nilit bank loans due at various dates through 2026⁽¹⁾	10		10
Obligations under finance leases due at various dates through 2054	156		167
Subtotal	3,490		3,355
Unamortized debt issuance costs⁽²⁾	(20	)	(18	)
Current installments of long-term debt	(26	)	(367	)
Total	3,444		2,970

______________________________


⁽¹⁾	~~The margin for borrowings under the senior unsecured term loan due 2021 was 1.5% above LIBOR at current Company credit ratings.~~


⁽²⁾	The weighted average interest rate was 1.3% and 1.3% as of June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively.


⁽³⁾⁽²⁾	Related to the Company's long-term debt, excluding obligations under ~~capital~~finance leases.

Senior Credit Facilities

~~In July 2016,~~On January 7, 2019, Celanese, Celanese US and certain ~~subsidiaries~~subsidiary borrowers entered into a new senior credit agreement ~~("Credit~~(the "Credit Agreement") consisting of a ~~$500 million senior unsecured term loan and a $1.0~~$1.25 billion senior unsecured revolving credit facility (with a letter of credit sublimit), ~~each~~ maturing in ~~2021.~~2024. The Credit Agreement is guaranteed by Celanese, Celanese US and substantially all of its domestic subsidiaries ~~(the "Subsidiary~~("the Subsidiary Guarantors").

~~Table of Contents~~

The Company's debt balances and amounts available for borrowing under its senior unsecured revolving credit facility are as follows:



	As of June 30, ~~2018~~ 2019
	(In $ millions)
Revolving Credit Facility
Borrowings outstanding⁽¹⁾	~~125~~148
Letters of credit issued	—
Available for borrowing⁽²⁾	~~875~~1,102

______________________________


⁽¹⁾	The Company borrowed ~~$535~~$869 million and repaid ~~$507~~$763 million under its senior unsecured revolving credit facility during the six months ended June 30, ~~2018.~~2019.


⁽²⁾	The margin for borrowings under the senior unsecured revolving credit facility was ~~1.5%~~1.25% above LIBOR or EURIBOR at current Company credit ratings.

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 US and are guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors. Celanese US 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

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"make-whole" premium as specified in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date.

On May 8, 2019, Celanese US completed an offering of $500 million in principal amount of 3.500% senior unsecured notes due May 8, 2024 (the "3.500% Notes") in a public offering registered under the Securities Act. The 3.500% Notes were issued at a discount to par at a price of 99.895%, which is being amortized to Interest expense in the unaudited interim consolidated statement of operations over the term of the 3.500% Notes. Net proceeds from the sale of the 3.500% Notes were used to redeem in full the 3.250% senior unsecured notes due October 15, 2019 (the "3.250 Notes"), to repay $156 million of outstanding borrowings under the senior unsecured revolving credit facility and for general corporate purposes. In connection with the issuance of the 3.500% Notes, the Company entered into a cross-currency swap to effectively convert its fixed-rate US dollar denominated debt under the 3.500% Notes, including annual interest payments and the payment of principal at maturity, to fixed-rate Euro denominated debt. See Note 17 for additional information.

Accounts Receivable Securitization Facility

The Company has a US accounts receivable securitization facility involving receivables of certain of its domestic subsidiaries of the Company transferred to a wholly-owned, "bankruptcy remote" special purpose subsidiary of the Company ("SPE"). The ~~securitization~~ facility, which permits cash borrowings and letters of credit, ~~expires in~~was amended on July ~~2019.~~8, 2019 to extend the maturity date to July 6, 2020 and modify certain events of default, limitations on concentrations of obligors and certain of the components used to calculate the SPE reserves. All of the SPE's assets have been pledged to the administrative agent in support of the SPE's obligations under the facility.

The Company's debt balances and amounts available for borrowing under its securitization facility are as follows:



	As of June 30, ~~2018~~ 2019
	(In $ millions)
Accounts Receivable Securitization Facility
Borrowings outstanding⁽¹⁾	77
Letters of credit issued	29
Available for borrowing	145
Total borrowing base	~~120~~111

Maximum borrowing base⁽²⁾⁽¹⁾	120

______________________________


⁽¹⁾	~~The Company borrowed $25 million and repaid $28 million during the six months ended June 30, 2018.~~


⁽²⁾	Outstanding accounts receivable transferred to the SPE was ~~$176~~$188 million.

~~Table of Contents~~

Other Financing Arrangements

~~During the three months ended~~In June ~~30,~~ 2018, the Company entered into a factoring agreement with a global financial institution to sell certain accounts receivable on a non-recourse basis. 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, 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 ~~$40~~$134 million and $117 million of accounts receivable as of June 30, 2019 and December 31, 2018,. respectively.

Covenants

The Company's 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 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 June 30, ~~2018~~2019.

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11. Benefit Obligations

The components of net periodic benefit cost are as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	Pension Benefits		Post-retirement Benefits	Pension Benefits		Post-retirement Benefits	Pension Benefits		Post-retirement Benefits	Pension Benefits		Post-retirement Benefits
	(In $ millions)
Service cost	2		—	3		—	4		—	5		—
Interest cost	29		1	26		1	58		1	52		1
Expected return on plan assets	(47	)	—	(53	)	—	(93	)	—	(105	)	—
Special termination benefit	—		—	1		—	—		—	1		—
Total	(16	)	1	(23	)	1	(31	)	1	(47	)	1

Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
Pension
Benefits Post-retirement
Benefits Pension
Benefits Post-retirement
Benefits Pension
Benefits Post-retirement
Benefits Pension
Benefits Post-retirement
Benefits
(In $ millions)
Service cost 3
—
2
—
5
—
4
—
Interest cost 26
1
26
1
52
1
53
1
Expected return on plan assets (53 ) —
(49 ) —
(105 ) —
(98 ) —
Amortization of prior service cost (credit), net —
—
—
(1 ) —
—
—
(1 )
Special termination benefit 1
—
1
—
1
—
1
—
Total (23 ) 1
(20 ) —
(47 ) 1
(40 ) —

Benefit obligation funding is as follows:


	As of June 30, 2018	Total Expected 2018	As of June 30, 2019	Total Expected 2019
	(In $ millions)		(In $ millions)
Cash contributions to defined benefit pension plans	12	23	11	22
Benefit payments to nonqualified pension plans	11	21	11	21
Benefit payments to other postretirement benefit plans	1	5	2	5
Cash contributions to German multiemployer defined benefit pension plans⁽¹⁾	4	8	4	9

______________________________


⁽¹⁾	The Company makes contributions based on specified percentages of employee contributions.

The Company's estimates of its US defined benefit pension plan contributions reflect the provisions of the Pension Protection Act of 2006.

~~Table of Contents~~

12. Environmental

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 ~~reserves~~liabilities are as follows:



	As of June 30, 2019	As of December 31, 2018
	(In $ millions)
Demerger obligations (Note 19)	25	26
Divestiture obligations (Note 19)	13	16
Active sites	14	14
US Superfund sites	11	11
Other environmental remediation liabilities	2	2
Total	65	69

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As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Demerger obligations (Note 18)
26
28
Divestiture obligations (Note 18)
17
17
Active sites 15
15
US Superfund sites 11
11
Other environmental remediation reserves 2
2
Total 71
73

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 US 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 1819)). Certain of these sites, at which the Company maintains continuing involvement, were and continue to be designated as discontinued ~~operations when closed.~~operations. 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.

US Superfund Sites

In the US, the Company may be subject to substantial claims brought by US 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 US 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 US 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, as appropriate, a liability for site cleanup. Such liabilities include all costs that are probable and can be reasonably estimated. 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.

~~Table of Contents~~

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. Work on the RI/FS is ~~ongoing, with a goal to complete it in 2018.~~ongoing.

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. 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. On June 30, 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. The Company is vigorously defending these matters and currently believes that its ultimate allocable share of the cleanup costs with respect to the Lower Passaic River Site, estimated at less than 1%, will not be material to the Company's results of operations, cash flows or financial position.

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13. Stockholders' 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 ~~Series A common stock, par value $0.0001 per share ("~~Common ~~Stock"),~~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.

The Company's Board of Directors approved increases in the Company's Common Stock cash dividend rates as follows:



	Increase	Quarterly Common Stock Cash Dividend	Annual Common Stock Cash Dividend	Effective Date
	(In percentages)	(In $ per share)
April 2018	17	0.54	2.16	May 2018
April 2019	15	0.62	2.48	May 2019

Increase
Quarterly Common
Stock Cash Dividend

Annual Common
Stock Cash Dividend
Effective Date
(In percentages) (In $ per share)
April 2017 28 0.46 1.84 May 2017
April 2018 17 0.54 2.16 May 2018

The Company's certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Series B common stock, par value $0.0001 per share, none of which are issued or outstanding as of June 30, 2018 and December 31, 2017.

The Company declared a quarterly cash dividend of ~~$0.54~~$0.62 per share on its Common Stock on July ~~16, 2018,~~15, 2019, amounting to ~~$73~~$77 million. The cash dividend will be paid on August ~~6, 2018~~5, 2019 to holders of record as of July ~~27, 2018.~~26, 2019.

Treasury Stock


	Six Months Ended June 30,				Total From February 2008 Through June 30, 2018		Six Months Ended June 30,				Total From February 2008 Through June 30, 2019
	2018		2017		Total From February 2008 Through June 30, 2018		2019		2018		Total From February 2008 Through June 30, 2019
Shares repurchased	888,383		3,412,858		40,667,402		4,890,155		888,383		52,602,866
Average purchase price per share	$	112.56	$	88.88	$	59.88	$	102.25	$	112.56	$	69.44
Shares repurchased (in $ millions)	$	100	$	303	$	2,435	$	500	$	100	$	3,653
Aggregate Board of Directors repurchase authorizations during the period (in $ millions)⁽¹⁾	$	—	$	—	$	3,866	$	1,500	$	—	$	5,366

______________________________


⁽¹⁾	These authorizations give management discretion in determining the timing and conditions under which shares may be repurchased. This repurchase program began in February 2008 and does not have an expiration date.

~~Table of Contents~~

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 stockholders' equity.

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Other Comprehensive Income (Loss), Net



	Three Months Ended June 30,
	2019					2018
	Gross Amount		Income Tax (Provision) Benefit	Net Amount		Gross Amount		Income Tax (Provision) Benefit	Net Amount
	(In $ millions)
Foreign currency translation gain (loss)	(12	)	1	(11	)	(72	)	6	(66	)
Gain (loss) on cash flow hedges	(19	)	6	(13	)	6		—	6
Pension and postretirement benefits gain (loss)	—		—	—		—		—	—
Total	(31	)	7	(24	)	(66	)	6	(60	)

Three Months Ended June 30,
2018 2017

Gross
Amount

Income
Tax
(Provision)
Benefit

Net
Amount

Gross
Amount

Income
Tax
(Provision)
Benefit
Net
Amount
(In $ millions)
Unrealized gain (loss) on marketable securities —
—
—
1
—
1
Foreign currency translation (72 ) 6
(66 ) 71
7
78
Gain (loss) on cash flow hedges 6
—
6
1
—
1
Pension and postretirement benefits —
—
—
—
—
—
Total (66 ) 6
(60 ) 73
7
80



	Six Months Ended June 30,
	2019						2018
	Gross Amount		Income Tax (Provision) Benefit		Net Amount		Gross Amount		Income Tax (Provision) Benefit	Net Amount
	(In $ millions)
Foreign currency translation gain (loss)	1		(5	)	(4	)	(27	)	10	(17	)
Gain (loss) on cash flow hedges	(22	)	6		(16	)	4		1	5
Pension and postretirement benefits gain (loss)	—		—		—		1		—	1
Total	(21	)	1		(20	)	(22	)	11	(11	)

Six Months Ended June 30,
2018 2017
Gross
Amount Income
Tax
(Provision)
Benefit Net
Amount Gross
Amount Income
Tax
(Provision)
Benefit Net
Amount
(In $ millions)
Unrealized gain (loss) on marketable securities —
—
—
1
—
1
Foreign currency translation (27 ) 10
(17 ) 99
7
106
Gain (loss) on cash flow hedges 4
1
5
(1 ) —
(1 )
Pension and postretirement benefits 1
—
1
5
—
5
Total (22 ) 11
(11 ) 104
7
111

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 11)		Accumulated Other Comprehensive Income (Loss), Net
	(In $ millions)
As of December 31, 2018	(236	)	(8	)	(3	)	(247	)
Other comprehensive income (loss) before reclassifications	1		(18	)	—		(17	)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(4	)	—		(4	)
Income tax (provision) benefit	(5	)	6		—		1
As of June 30, 2019	(240	)	(24	)	(3	)	(267	)

Foreign
Currency
Translation

Gain (Loss)
on Cash
Flow
Hedges
(Note 16)

Pension
and
Postretirement
Benefits
(Note 11)

Accumulated
Other
Comprehensive
Income
(Loss), Net
(In $ millions)
As of December 31, 2017 (176 ) 2
(3 ) (177 )
Other comprehensive income (loss) before reclassifications (27 ) 5
1
(21 )
Amounts reclassified from accumulated other comprehensive income (loss) —
(1 )
—

(1 )
Income tax (provision) benefit 10
1
—
11
As of June 30, 2018 (193 ) 7
(2 ) (188 )

~~Table of Contents~~

14. Other (Charges) Gains, Net



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
	(In $ millions)
Restructuring	(15	)	(3	)	(14	)	(3	)
Asset impairments	(83	)	—		(83	)	—
Plant/office closures	—		—		(1	)	—
Commercial disputes	—		—		4		—
Total	(98	)	(3	)	(94	)	(3	)

During the three months ended June 30, 2019, the Company recorded an $83 million long-lived asset impairment loss related to the closure of its acetate flake manufacturing operations in Ocotlán, Mexico (Note 3). The long-lived asset impairment loss was

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Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
(In $ millions)
Restructuring (3 ) (1 ) (3 ) (3 )
InfraServ ownership change —
(4 ) —
(4 )
Plant/office closures —
3
—
(50 )
Total (3 ) (2 ) (3 ) (57 )

measured at the date of impairment to write-off the related property, plant and equipment and was included in the Company's Acetate Tow segment.

During the six months ended June 30, ~~2018 and 2017,~~2019, the Company recorded $3a $15 million gain within commercial disputes related to a settlement from a previous acquisition that was included within the Engineered Materials segment. The Company also recorded an $11 million loss within commercial disputes related to a settlement by the Company's captive insurer with a former third-party customer, which was included within the Other Activities segment.

During the six months ended June 30, 2019 and June 30, 2018, the Company recorded $14 million and $3 million, respectively, of employee termination benefits primarily related to ~~the Company's ongoing efforts to align its businesses around its core value drivers.~~Company-wide business optimization projects.

During the six months ended June 30, 2017, the Company provided notice of termination of a contract with a key raw materials supplier at its ethanol production unit in Nanjing, China. As a result, the Company recorded an estimated $50 million of plant/office closure costs primarily consisting of a $24 million contract termination charge and an $18 million reduction to its non-income tax receivable. The Nanjing, China ethanol production unit is included in the Company's Acetyl Intermediates segment.

The changes in the restructuring ~~reserves~~liability by business segment are as follows:



	Engineered Materials		Acetate Tow		Acetyl Chain		Other	Total
	(In $ millions)
Employee Termination Benefits
As of December 31, 2018	—		2		2		—	4
Additions	8		1		1		5	15
Cash payments	(1	)	(2	)	—		—	(3	)
Other changes	—		—		(1	)	—	(1	)
Exchange rate changes	—		—		—		—	—
As of June 30, 2019	7		1		2		5	15

Engineered
Materials
Acetate Tow
Industrial
Specialties

Acetyl
Intermediates
Other Total
(In $ millions)
Employee Termination Benefits
As of December 31, 2017 1
—
—
1
1
3
Additions —
1
2
—
—
3
Cash payments (1 ) —
—
—
—
(1 )
Other changes —
—
—
—
—
—
Exchange rate changes —
—
—
—
—
—
As of June 30, 2018 —
1
2
1
1
5
Other Plant/Office Closures
As of December 31, 2017 —
—
—
2
—
2
Additions —
—
—
—
—
—
Cash payments —
—
—
—
—
—
Other changes —
—
—
—
—
—
Exchange rate changes —
—
—
—
—
—
As of June 30, 2018 —
—
—
2
—
2
Total —
1
2
3
1
7

15. Income Taxes



	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
	(In percentages)
Effective income tax rate	12	22	12	19

Three Months Ended
June 30, Six Months Ended
June 30,
2018 2017 2018 2017
(In percentages)
Effective income tax rate 22 14 19 18

The ~~higher~~lower effective income tax rate for the three and six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017 is~~2018 was primarily due to ~~increases~~2019 reductions in the valuation ~~allowances~~allowance on foreign tax credits that resulted from greater forecasted utilization of credits prior to the expiration of their carryforward period. During the three and six months ended June 30, 2018, and prior to the receipt of any regulatory guidance from the Treasury related to ~~foreign tax credit carryforwards partially offset by the release~~various provisions of ~~valuation allowances on net deferred tax assets in Singapore, reduction of the US statutory tax rate due to new tax legislation, commonly referred to as~~ the Tax Cuts and Jobs Act ~~(the "TCJA") and reduced losses not providing tax benefits in certain jurisdictions.~~

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~~In December 2017, the TCJA was enacted and was effective January 1, 2018. ASC 740,~~ ~~Accounting for Income Taxes~~, requires companies to recognize the effects of tax law changes in the period of enactment. This overhaul of the US tax law made a number of substantial changes, including the reduction of the corporate tax rate from 35% to 21%, establishing a dividends received deduction for dividends paid by foreign subsidiaries to the US, elimination or limitation of certain deductions (interest, domestic production activities and executive compensation), imposing a mandatory tax on previously unrepatriated earnings accumulated offshore since 1986 and establishing global minimum income tax and base erosion tax provisions related to offshore activities and affiliated party payments.

~~Due to the timing of the new tax law and the substantial changes it brings, the SEC issued Staff Accounting Bulletin No. 118~~ ("~~SAB 118"~~TCJA"), which provides registrants a measurement period to report the impact of the new US tax law. During the measurement period, provisional amounts for the effects of the law are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is not available, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one year following enactment of the TCJA.

~~For year-end 2017,~~ the Company recorded ~~provisional amounts for impacts of the new tax law including: the deemed repatriation tax~~additional valuation allowances on ~~post 1986 accumulated earnings and profits, the deferred tax rate change effect of the new law, gross~~prior year foreign tax credit carryforwards and related valuation allowances to offset foreign tax credit carryforwards. Certain items or estimates that result in impacts of the TCJA being provisional include: detailed foreign earnings calculations for 2017 and 2018, projected foreign cash balances for certain foreign subsidiaries and finalized computations of foreign tax credit availability. Finally, the Company considers it likely that further technical guidance regarding certain components of the new provisions included in the TCJA, as well as clarity regarding state income tax conformity to current federal tax code, may be issued. During the three months ended June 30, 2018, the Company recorded increases to provisional amounts for valuation allowances on foreign tax credits of $56 million. The changes in provisional amounts are primarily due to ~~refined estimates~~uncertainty regarding the treatment of ~~foreign source~~future income and ~~expense apportionment during the credit carryforward period and refined estimates of foreign tax~~ credits generated ~~during~~under the ~~carryforward period. The Company will continue to refine provisional amounts for the impacts~~global low-taxed intangible income ("GILTI") provisions, which were enacted as part of ~~the TCJA as more refined information and further guidance become available.~~TCJA.

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 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,~~Due to the TCJA and uncertainty as to future sources of general limitation foreign source income to allow for the utilization of these credits, the Company recorded a valuation allowance on a substantial portion of its foreign tax credits upon the enactment of the TCJA in December 2017. The Company is currently evaluating tax planning strategies ~~to enable use of~~that would utilize the Company's foreign tax credit ~~carryforwards~~carryforwards. Implementation of these strategies in future periods could reduce the level of valuation allowance that ~~may decrease~~is needed, thereby decreasing the Company's effective tax ~~rate in future periods~~rate.

On March 6, 2019, the US Department of Treasury issued proposed regulations clarifying the deduction for GILTI and Foreign-Derived Intangible Income ("FDII"), which were enacted as part of the ~~valuation allowance~~TCJA. The Company currently does not expect these regulations to have a material impact on tax expense upon final adoption and will evaluate the impact of final guidance once it is ~~reversed.~~released.

~~During~~On June 14, 2019, the ~~six months ended June 30, 2018,~~US Department of Treasury released proposed and final regulations clarifying the ~~Company's uncertain~~GILTI inclusion and temporary and proposed regulations clarifying the dividends received deduction for foreign dividends paid to the US that were

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enacted as part of the TCJA. The Company currently does not expect these regulations to have a material impact on tax ~~positions decreased $7 million, primarily due to favorable technical clarifications in Germany~~expense and ~~foreign currency exchange fluctuations, partially offset by an increase in US positions.~~will evaluate the impact of further guidance as it is released.

In connection with the Company's US federal income tax audit for 2009 and 2010, the Company ~~has received $192 million of proposed pre-tax adjustments related~~entered into a closing agreement during the three months ended March 31, 2019, which did not impact any previously recorded amounts based on settlement discussions prior to ~~various intercompany charges.~~ the formal closing agreement.

In January 2018, the Company received proposed pre-tax adjustments for its 2011 and 2012 audit cycle in the amount of $198 million. In the event the Company is wholly unsuccessful in its defense and absent expected offsetting adjustments from foreign tax authorities, the proposed adjustments would result in the consumption of approximately ~~$136~~$69 million of prior foreign tax credit carryforwards, which are substantially offset with a valuation allowance due to uncertain recoverability. The Company believes these proposed adjustments to be without merit and is vigorously defending its position.

16. 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 unaudited 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 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. 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 ~~initiated~~lease agreements with non-lease components which are not bifurcated.

Most leases include one or more options to renew, with renewal terms that can extend the ~~appeal process for~~lease term from one to 30 years. The exercise of a lease renewal option typically occurs at the ~~2009 and 2010 examination years. As negotiations progress,~~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 ~~evaluate its position and will record~~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 ~~anticipated impacts accordingly.~~ material residual value guarantees or material restrictive covenants.

The ~~Company does not currently anticipate a material impact from the appeals process~~components of lease expense are as follows:



	Three Months Ended June 30,	Six Months Ended June 30,	Statement of Operations Classification
	2019
	(In $ millions)
Lease Cost
Operating lease cost	10	20	Cost of sales / Selling, general and administrative expenses
Short-term lease cost	5	10	Cost of sales / Selling, general and administrative expenses
Variable lease cost	2	4	Cost of sales / Selling, general and administrative expenses
Finance lease cost
Amortization of leased assets	4	9	Cost of sales
Interest on lease liabilities	5	10	Interest expense
Sublease income	—	—	Other income (expense), net
Total net lease cost	26	53

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Supplemental unaudited consolidated balance sheet information related to leases is as follows:



	As of June 30, 2019	Balance Sheet Classification
	(In $ millions)
Leases
Assets
Operating lease assets	209	Operating lease ROU assets
Finance lease assets	94	Property, plant and equipment, net
Total leased assets	303

Liabilities
Current
Operating	31	Current Other liabilities
Finance	24	Short-term borrowings and current installments of long-term debt
Noncurrent
Operating	192	Operating lease liabilities
Finance	132	Long-term debt
Total lease liabilities	379



	As of June 30, 2019
Weighted-Average Remaining Lease Term (years)
Operating leases	15.0
Finance leases	7.1

Weighted-Average Discount Rate
Operating leases	2.7	%
Finance leases	11.7	%

Supplemental unaudited interim consolidated cash flow information related to leases is as follows:



	Six Months Ended June 30, 2019
	(In $ millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	20
Operating cash flows from finance leases	10
Financing cash flows from finance leases	11

ROU assets obtained in exchange for finance lease liabilities	—
ROU assets obtained in exchange for operating lease liabilities	5

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Maturities of lease liabilities are as follows:



	As of June 30, 2019
	Operating Leases		Finance Leases
	(In $ millions)
2019	19		22
2020	34		41
2021	26		40
2022	23		32
2023	20		23
Later years	150		88
Sublease income	—		—
Total lease payments	272		246
Less amounts representing interest	(49	)	(90	)
Total lease obligations	223		156

As of June 30, 2019, there were no additional operating or financing lease commitments that have not yet commenced.

Disclosures related to periods prior to adoption of ASU 2016-02

Operating lease rent expense was approximately $96 million for the ~~2009~~year ended December 31, 2018. Future minimum lease payments under non-cancelable rental and ~~2010 examination years.~~lease agreements which had initial or remaining terms in excess of one year are as follows:



	As of December 31, 2018
	Operating Leases	Capital Leases
	(In $ millions)
2019	43	42
2020	34	42
2021	25	40
2022	23	32
2023	21	23
Later years	130	88
Sublease income	—	—
Minimum lease commitments	276	267
Less amounts representing interest		(100	)
Present value of net minimum lease obligations		167

~~16.~~17. Derivative Financial Instruments

Derivatives Designated As Hedges

Net Investment Hedges

The Company uses derivative instruments, such as foreign currency forwards, and non-derivative financial instruments, such as foreign currency denominated debt, 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 derivative and non-derivative financial instruments is included in foreign currency translation within

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Accumulated other comprehensive income (loss), net in the unaudited consolidated balance sheets. Gains and losses are reclassified to earnings in the period the hedged investment is sold or liquidated.

The total notional amount of foreign currency denominated debt and cross-currency swaps designated as net investment hedges are as follows:



	As of June 30, 2019	As of December 31, 2018
	(In € millions)
Total	1,378	1,550

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Cash Flow Hedges

The total notional amount of the forward-starting interest rate swap designated as a ~~net investment~~cash flow hedge ~~of net investments in foreign operations are~~is as follows:



	As of June 30, 2019	As of December 31, 2018
	(In $ millions)
Total	400	400

As of
June 30,
2018 As of
December 31,
2017
(In € millions)
Total 1,050
1,050

Derivatives Not Designated As Hedges

Foreign Currency Forwards and Swaps

Gross notional values of the foreign currency forwards and swaps not designated as hedges are as follows:



	As of June 30, 2019	As of December 31, 2018
	(In $ millions)
Total	711	1,071

As of
June 30,
2018 As of
December 31,
2017
(In $ millions)
Total 876
740

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)				Gain (Loss) Recognized in Other Comprehensive Income (Loss)			Gain (Loss) Recognized in Earnings (Loss)
	Three Months Ended June 30,						Statement of Operations Classification	Three Months Ended June 30,					Statement of Operations Classification
	2018	2017		2018	2017		Statement of Operations Classification	2019		2018	2019	2018	Statement of Operations Classification
	(In $ millions)							(In $ millions)
Designated as Cash Flow Hedges
Commodity swaps	6	2		1	1		Cost of sales	(2	)	6	2	1	Cost of sales
Interest rate swaps								(15	)	—	—	—	Interest expense
Foreign currency forwards	1	(1	)	—	—		Cost of sales	—		1	—	—	Cost of sales
Total	7	1		1	1			(17	)	7	2	1

Designated as Net Investment Hedges
Foreign currency denominated debt (Note 10)	70	(56	)	—	—		N/A	(13	)	70	—	—	N/A
Cross-currency swaps (Note 10)								(6	)	—	—	—	N/A
Total	70	(56	)	—	—			(19	)	70	—	—

Not Designated as Hedges
Foreign currency forwards and swaps	—	—		21	(3	)	Foreign exchange gain (loss), net; Other income (expense), net	—		—	3	21	Foreign exchange gain (loss), net; Other income (expense), net
Total	—	—		21	(3	)		—		—	3	21

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	Gain (Loss) Recognized in Other Comprehensive Income (Loss)			Gain (Loss) Recognized in Earnings (Loss)
	Six Months Ended June 30,					Statement of Operations Classification
	2019		2018	2019	2018	Statement of Operations Classification
	(In $ millions)
Designated as Cash Flow Hedges
Commodity swaps	8		4	4	1	Cost of sales
Interest rate swaps	(26	)	—	—	—	Interest expense
Foreign currency forwards	—		1	—	—	Cost of sales
Total	(18	)	5	4	1

Designated as Net Investment Hedges
Foreign currency denominated debt (Note 10)	26		35	—	—	N/A
Cross-currency swaps (Note 10)	(6	)	—	—	—	N/A
Total	20		35	—	—

Not Designated as Hedges
Foreign currency forwards and swaps	—		—	—	17	Foreign exchange gain (loss), net; Other income (expense), net
Total	—		—	—	17

Gain (Loss) Recognized in Other Comprehensive Income (Loss) Gain (Loss) Recognized in Earnings (Loss)
Six Months Ended June 30, Statement of Operations Classification
2018 2017 2018 2017
(In $ millions)
Designated as Cash Flow Hedges
Commodity swaps 4
1
1
2
Cost of sales
Foreign currency forwards 1
(1 ) —
—
Cost of sales
Total 5
—
1
2

Designated as Net Investment Hedges
Foreign currency denominated debt (Note 10)
35
(69 ) —
—
N/A
Total 35
(69 ) —
—

Not Designated as Hedges
Foreign currency forwards and swaps —
—
17
(2 ) Foreign exchange gain (loss), net; Other income (expense), net
Total —
—
17
(2 )

See Note 1718 for ~~further~~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 unaudited consolidated balance sheets is as follows:


	As of June 30, 2018	As of December 31, 2017	As of June 30, 2019	As of December 31, 2018
	(In $ millions)		(In $ millions)
Derivative Assets
Gross amount recognized	24	13	11	11
Gross amount offset in the consolidated balance sheets	8	4	3	2
Net amount presented in the consolidated balance sheets	16	9	8	9
Gross amount not offset in the consolidated balance sheets	5	3	1	3
Net amount	11	6	7	6


	As of June 30, 2018	As of December 31, 2017	As of June 30, 2019	As of December 31, 2018
	(In $ millions)		(In $ millions)
Derivative Liabilities
Gross amount recognized	14	7	48	20
Gross amount offset in the consolidated balance sheets	8	4	3	2
Net amount presented in the consolidated balance sheets	6	3	45	18
Gross amount not offset in the consolidated balance sheets	5	3	1	3
Net amount	1	—	44	15

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~~17.~~18. Fair Value Measurements

The Company's financial assets and liabilities are measured at fair value on a recurring basis as follows:

Derivatives. Derivative financial instruments ~~including~~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 ~~spot~~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)		Total		Balance Sheet Classification
	(In $ millions)
As of June 30, 2019
Derivatives Designated as Cash Flow Hedges
Commodity swaps	—	5		5		Current Other assets
Commodity swaps	—	1		1		Noncurrent Other assets
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	2		2		Current Other assets
Total assets	—	8		8
Derivatives Designated as Cash Flow Hedges
Interest rate swaps	—	(36	)	(36	)	Noncurrent Other liabilities
Derivatives Designated as Net Investment Hedges
Cross-currency swaps	—	(1	)	(1	)	Current Other liabilities
Cross-currency swaps	—	(6	)	(6	)	Noncurrent Other liabilities
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	(2	)	(2	)	Current Other liabilities
Total liabilities	—	(45	)	(45	)
As of December 31, 2018
Derivatives Designated as Cash Flow Hedges
Commodity swaps	—	1		1		Current Other assets
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	8		8		Current Other assets
Total assets	—	9		9
Derivatives Designated as Cash Flow Hedges
Commodity swaps	—	(1	)	(1	)	Noncurrent Other liabilities
Interest rate swaps	—	(10	)	(10	)	Noncurrent Other liabilities
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps	—	(7	)	(7	)	Current Other liabilities
Total liabilities	—	(18	)	(18	)

Fair Value Measurement

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)
Total Balance Sheet Classification
(In $ millions)
As of June 30, 2018
Derivatives Designated as Cash Flow Hedges
Commodity swaps —
5
5
Current Other assets
Commodity swaps —
2
2
Noncurrent Other assets
Derivatives Not Designated as Hedges

Foreign currency forwards and swaps —
9
9
Current Other assets
Total assets —
16
16

Derivatives Not Designated as Hedges
Foreign currency forwards and swaps —
(6 ) (6 ) Current Other liabilities
Total liabilities —
(6 ) (6 )
As of December 31, 2017
Derivatives Designated as Cash Flow Hedges
Commodity swaps —
2
2
Current Other assets
Commodity swaps —
2
2
Noncurrent Other assets
Derivatives Not Designated as Hedges
Foreign currency forwards and swaps —
5
5
Current Other assets
Total assets —
9
9

Derivatives Not Designated as Hedges
Foreign currency forwards and swaps —
(3 ) (3 ) Current Other liabilities
Total liabilities —
(3 ) (3 )

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Carrying values and fair values of financial instruments that are not carried at fair value are as follows:


		Fair Value Measurement				Fair Value Measurement
	Carrying Amount	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)	Total	Carrying Amount	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)	Total
	(In $ millions)				(In $ millions)
As of June 30, 2018
Cost investments	165	—	—	—
As of June 30, 2019
Equity investments without readily determinable fair values					170	—	—	—
Insurance contracts in nonqualified trusts	42	42	—	42	35	35	—	35
Long-term debt, including current installments of long-term debt	3,313	3,198	182	3,380	3,490	3,493	156	3,649
As of December 31, 2017
Cost investments	159	—	—	—
As of December 31, 2018
Equity investments without readily determinable fair values					164	—	—	—
Insurance contracts in nonqualified trusts	42	42	—	42	37	37	—	37
Long-term debt, including current installments of long-term debt	3,398	3,299	208	3,507	3,355	3,204	167	3,371

In general, the ~~cost~~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 ~~capital~~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 June 30, ~~2018,~~2019, and December 31, ~~2017,~~2018, the fair values of cash and cash equivalents, receivables, 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.

~~18.~~19. Commitments and Contingencies

Commitments

Guarantees

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. 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 12).

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 June 30, ~~2018~~2019, are ~~$83~~$90 million. ~~Most~~Though the Company is significantly under its

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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.

~~Table of Contents~~

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 ~~Possible Loss for 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 12).

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 ~~$122~~$116 million as of June 30, ~~2018.~~2019. 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 Possible Loss for~~ 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 June 30, ~~2018,~~2019, the Company had unconditional purchase obligations of ~~$1.6~~$1.2 billion, which extend through 2036.

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, ~~commercial~~ 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 legacy stockholders, 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 ~~will~~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 opened a competition law investigation involving certain subsidiaries of the Company with respect to certain ethylene purchases. The Company is cooperating with the European Commission. Because the investigation is on-going, and the many uncertainties and variables involved, the Company is unable at this time to determine the outcome of this investigation and whether, and in what amount, any potential fines would be assessed.

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~~19.~~20. Segment Information

Effective January 1, 2018, the Company reorganized its operating and reportable segments to align with recent structural and management reporting changes. The change reflects the movement of its food ingredients business from the Consumer Specialties reportable segment into the Engineered Materials reportable segment. The former Consumer Specialties reportable segment was renamed the Acetate Tow segment, and the former Advanced Engineered Materials reportable segment was renamed the Engineered Materials segment. This reorganization better reflects how the Company manages its food ingredients' related products commercially. Engineered Materials and food ingredients are both project-based models which focus on delivering customized solutions and are led by the same senior management team.



	Engineered Materials		Acetate Tow		Acetyl Chain		Other Activities		Eliminations			Consolidated
	(In $ millions)
	Three Months Ended June 30, 2019
Net sales	593		164		865		—		(30	)	⁽¹⁾	1,592
Other (charges) gains, net (Note 14)	(8	)	(84	)	(1	)	(5	)	—			(98	)
Operating profit (loss)	103		(44	)	188		(61	)	—			186
Equity in net earnings (loss) of affiliates	36		—		1		2		—			39
Depreciation and amortization	31		11		38		4		—			84
Capital expenditures	21		11		35		7		—			74		⁽²⁾
	Three Months Ended June 30, 2018
Net sales	664		162		1,049		—		(31	)	⁽¹⁾	1,844
Other (charges) gains, net (Note 14)	—		(1	)	(2	)	—		—			(3	)
Operating profit (loss)	114		39		273		(68	)	—			358
Equity in net earnings (loss) of affiliates	53		—		2		1		—			56
Depreciation and amortization	33		13		36		4		—			86
Capital expenditures	26		10		49		3		—			88		⁽²⁾

Engineered
Materials
Acetate Tow
Industrial
Specialties

Acetyl
Intermediates

Other
Activities
Eliminations Consolidated
(In $ millions)
Three Months Ended June 30, 2018
Net sales 664
162
288
⁽¹⁾
861
⁽²⁾
—
(131 ) 1,844

Other (charges) gains, net (Note 14)
—
(1 ) (2 ) —
—
—
(3 )
Operating profit (loss) 114
39
22
251
(68 ) —
358

Equity in net earnings (loss) of affiliates 53
—
—
2
1
—
56

Depreciation and amortization 33
13
10
26
4
—
86

Capital expenditures 26
10
5
44
3
—
88
⁽³⁾

Three Months Ended June 30, 2017 - As Adjusted (Note 2)

Net sales 546
163
262
⁽¹⁾
649
⁽²⁾
—
(110 ) 1,510

Other (charges) gains, net (Note 14)
(2 ) (1 ) —
3
(2 ) —
(2 )
Operating profit (loss) 105
41
26
109
(63 ) —
218

Equity in net earnings (loss) of affiliates 38
—
—
2
(2 ) —
38

Depreciation and amortization 27
10
10
26
2
—
75

Capital expenditures 14
7
6
28
3
—
58
⁽³⁾

______________________________


⁽¹⁾	Includes intersegment sales ~~of $1 million and $1 million for~~primarily related to the ~~three months ended June 30, 2018 and~~ ~~2017, respectively.~~ Acetyl Chain.


⁽²⁾	~~Includes intersegment sales of $130 million and $109 million for the three months ended June 30, 2018 and~~ ~~2017, respectively.~~


⁽³⁾	Includes an increase in accrued capital expenditures of $9 million and $4$9 million for the three months ended June 30, ~~2018~~2019 and ~~2017~~2018, respectively.

3031

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	Engineered Materials		Acetate Tow		Industrial Specialties			Acetyl Intermediates			Other Activities		Eliminations		Consolidated			Engineered Materials	Acetate Tow		Acetyl Chain		Other Activities		Eliminations			Consolidated
	(In $ millions)																	(In $ millions)
	Six Months Ended June 30, 2018																	Six Months Ended June 30, 2019
Net sales	1,329		330		562		⁽¹⁾	1,732		⁽²⁾	—		(258	)	3,695			1,256	330		1,754		—		(61	)	⁽¹⁾	3,279
Other (charges) gains, net (Note 14)	—		(1	)	(2	)		—			—		—		(3	)		7	(84	)	(1	)	(16	)	—			(94	)
Operating profit (loss)	241		85		45			482			(151	)	(1	)	701			247	(4	)	390		(127	)	—			506
Equity in net earnings (loss) of affiliates	107		—		—			3			4		—		114			82	—		2		5		—			89
Depreciation and amortization	65		23		19			52			6		—		165			63	21		76		7		—			167
Capital expenditures	47		10		9			74			5		—		145		⁽³⁾	37	19		61		11		—			128		⁽²⁾
																		As of June 30, 2019
	As of June 30, 2018
Goodwill and intangible assets, net	993		154		45			202			—		—		1,394			1,020	153		237		—		—			1,410
Total assets	4,029		1,071		850			2,688			1,151		—		9,789			3,589	973		3,503		1,441		—			9,506

	Six Months Ended June 30, 2017 - As Adjusted (Note 2)																	Six Months Ended June 30, 2018
Net sales	1,060		354		507		⁽¹⁾	1,268		⁽²⁾	—		(208	)	2,981			1,329	330		2,100		—		(64	)	⁽¹⁾	3,695
Other (charges) gains, net (Note 14)	(2	)	(2	)	—			(50	)		(3	)	—		(57	)		—	(1	)	(2	)	—		—			(3	)
Operating profit (loss)	209		103		51			136			(111	)	—		388			241	85		526		(151	)	—			701
Equity in net earnings (loss) of affiliates	81		—		—			3			1		—		85			107	—		3		4		—			114
Depreciation and amortization	52		20		18			52			4		—		146			65	23		71		6		—			165
Capital expenditures	24		13		10			48			4		—		99		⁽³⁾	47	10		83		5		—			145		⁽²⁾
																		As of December 31, 2018
	As of December 31, 2017
Goodwill and intangible assets, net	902		154		46			202			—		—		1,304			974	153		240		—		—			1,367
Total assets	3,866		1,163		861			2,657			991		—		9,538			4,012	1,032		3,471		798		—			9,313

______________________________


⁽¹⁾	Includes intersegment sales primarily related to the Acetyl Chain.


⁽²⁾	Includes a decrease in accrued capital expenditures of $3$16 million and $2$20 million for the six months ended June 30, ~~2018~~2019 and ~~2017, respectively.~~


⁽²⁾	~~Includes intersegment sales of $255 million and $206 million for the six months ended June 30,~~ 2018 ~~and~~ ~~2017~~, respectively.


⁽³⁾	~~Includes a decrease in accrued capital expenditures of $20 million and $17 million for the six months ended~~ ~~June 30, 2018~~ ~~and~~ ~~2017, respectively.~~

~~20.~~21. Revenue Recognition

~~Accounting Policies~~

~~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 incurred are recorded in Cost of sales. The Company has elected to exclude from Net sales any value add, sales and other taxes

~~Table of Contents~~

which it collects concurrent with revenue-producing activities. These accounting policy elections are consistent with the manner in which the Company historically recorded shipping and handling fees and taxes.

~~The adoption of ASU 2014-09 (Note 2~~) resulted in an immaterial impact to the individual financial statement line items of the Company's unaudited interim consolidated statement of operations during the three and six months ended June 30, 2018.

~~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 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 unaudited consolidated balance sheets (~~Note 8). This methodology is consistent with the manner in which the Company historically estimated and recorded volume-based rebates.~~

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 June 30, ~~2018,~~2019, the Company had ~~$873~~$712 million of remaining performance obligations related to take-or-pay contracts. The Company expects to recognize approximately ~~$149~~$154 million of its remaining performance obligations as Net sales in ~~2018, $235~~2019, $203 million in ~~2019, an additional $182~~2020, $151 million in ~~2020~~2021 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 unaudited consolidated balance sheets (Note 9).

The Company does not have any material contract assets as of June 30, ~~2018.~~2019.

Disaggregated Revenue

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.

Table of Contents

Within the Acetate Tow business segment, the Company's primary product is acetate tow, which is managed through contracts with a few major tobacco companies and accounts for a significant amount of filters used in cigarette production worldwide.

The Company manages its ~~Industrial Specialties and~~ Acetyl ~~Intermediates~~Chain business ~~segments~~segment by leveraging its ability to sell chemicals externally to end-use markets or downstream to its emulsion polymers ~~business (within its Industrial Specialties segment).~~business. Decisions to sell externally and geographically or downstream and along the ~~acetyl chain~~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.

~~Table of Contents~~

Further disaggregation of Net sales by business segment and geographic destination is as follows:


	Three Months Ended June 30,	Six Months Ended June 30,	Three Months Ended June 30,		Six Months Ended June 30,
	2018		2019	2018	2019	2018
	(In $ millions)		(In $ millions)
Engineered Materials
North America	191	370	180	191	376	370
Europe and Africa	331	668	269	331	571	668
Asia-Pacific	126	258	126	126	274	258
South America	16	33	18	16	35	33
Total	664	1,329	593	664	1,256	1,329

Acetate Tow
North America	33	68	33	33	67	68
Europe and Africa	48	118	67	48	130	118
Asia-Pacific	68	119	56	68	116	119
South America	13	25	8	13	17	25
Total	162	330	164	162	330	330

Industrial Specialties
Acetyl Chain
North America	93	181	278	285	564	575
Europe and Africa	138	274	282	339	576	656
Asia-Pacific	52	96	252	362	508	740
South America	4	8	23	32	45	65
Total⁽¹⁾	287	559	835	1,018	1,693	2,036

Acetyl Intermediates
North America	192	394
Europe and Africa	201	382
Asia-Pacific	310	644
South America	28	57
Total⁽²⁾	731	1,477

______________________________


⁽¹⁾	Excludes intersegment sales of $1$30 million and $3$31 million for the three months ended June 30, 2019 and 2018, respectively. Excludes intersegment sales of $61 million and $64 million for the six months ended June 30, ~~2018, respectively.~~


⁽²⁾	~~Excludes intersegment sales of $130 million~~2019 and ~~$255 million for the three and six months ended June 30,~~ 2018, respectively.

~~Table of Contents~~

~~21.~~22. Earnings (Loss) Per Share



	Three Months Ended June 30,			Six Months Ended June 30,
	2019		2018	2019		2018
	(In $ millions, except share data)
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	210		344	548		709
Earnings (loss) from discontinued operations	(1	)	—	(2	)	(2	)
Net earnings (loss)	209		344	546		707

Weighted average shares - basic	125,289,967		135,589,717	126,409,926		135,752,179
Incremental shares attributable to equity awards	557,927		719,441	701,120		747,569
Weighted average shares - diluted	125,847,894		136,309,158	127,111,046		136,499,748

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Three Months Ended
June 30, Six Months Ended
June 30,
2018 2017 2018 2017
(In $ millions, except share data)
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations 344
239
709
422
Earnings (loss) from discontinued operations —
(8 ) (2 ) (8 )
Net earnings (loss) 344
231
707
414

Weighted average shares - basic 135,589,717
138,619,721
135,752,179
139,626,199
Incremental shares attributable to equity awards 719,441
409,704

747,569
396,357
Weighted average shares - diluted 136,309,158
139,029,425
136,499,748
140,022,556

During the three and six months ended June 30, ~~2018~~2019 and ~~2017,~~2018, there were no anti-dilutive equity awards excluded from the computation of diluted net earnings per share.

~~22.~~23. Consolidating Guarantor Financial Information

The Senior Notes were issued by Celanese US ("Issuer") and are guaranteed by Celanese Corporation ("Parent Guarantor") and the Subsidiary Guarantors (Note 10). The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor. The Parent Guarantor and Subsidiary Guarantors have guaranteed the Notes fully and unconditionally and jointly and severally.

For cash management purposes, the Company transfers cash between 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. 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 Company's outstanding debt, Common Stock dividends and Common Stock repurchases. The unaudited interim consolidating statements of cash flows for the six months ended June 30, ~~2018~~2019 and ~~2017~~2018 present such intercompany financing activities, contributions and dividends consistent with how such activity would be presented in a stand-alone statement of cash flows.

The Company has not presented separate financial information and other disclosures for each of its Subsidiary Guarantors because it believes such financial information and other disclosures would not provide investors with any additional information that would be material in evaluating the sufficiency of the guarantees.

The unaudited interim consolidating financial statements for the Parent Guarantor, the Issuer, the Subsidiary Guarantors and the non-guarantors are as follows:

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CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF OPERATIONS


	Three Months Ended June 30, 2018											Three Months Ended June 30, 2019
	Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)											(In $ millions)
Net sales	—	—		586		1,566		(308	)	1,844		—	—		586		1,298		(292	)	1,592
Cost of sales	—	—		(457	)	(1,171	)	305		(1,323	)	—	—		(443	)	(1,020	)	294		(1,169	)
Gross profit	—	—		129		395		(3	)	521		—	—		143		278		2		423
Selling, general and administrative expenses	—	—		(51	)	(85	)	—		(136	)	—	—		(39	)	(79	)	—		(118	)
Amortization of intangible assets	—	—		(1	)	(6	)	—		(7	)	—	—		(2	)	(4	)	—		(6	)
Research and development expenses	—	—		(7	)	(11	)	—		(18	)	—	—		(7	)	(10	)	—		(17	)
Other (charges) gains, net	—	—		—		(3	)	—		(3	)	—	—		(5	)	(93	)	—		(98	)
Foreign exchange gain (loss), net	—	—		—		3		—		3		—	—		—		1		—		1
Gain (loss) on disposition of businesses and assets, net	—	—		(3	)	1		—		(2	)	—	—		(2	)	3		—		1
Operating profit (loss)	—	—		67		294		(3	)	358		—	—		88		96		2		186
Equity in net earnings (loss) of affiliates	344	341		312		53		(994	)	56		209	210		122		34		(536	)	39
Non-operating pension and other postretirement employee benefit (expense) income	—	—		24		2		—		26		—	—		16		1		—		17
Interest expense	—	(5	)	(31	)	(8	)	12		(32	)	—	(9	)	(35	)	(13	)	28		(29	)
Refinancing expense												—	(4	)	—		—		—		(4	)
Interest income	—	10		2		2		(14	)	—		—	18		11		1		(28	)	2
Dividend income - cost investments	—	—		—		32		2		34
Dividend income - equity investments												—	—		—		30		—		30
Other income (expense), net	—	(1	)	—		1		—		—		—	(4	)	—		2		—		(2	)
Earnings (loss) from continuing operations before tax	344	345		374		376		(997	)	442		209	211		202		151		(534	)	239
Income tax (provision) benefit	—	(1	)	(69	)	(28	)	1		(97	)	—	(2	)	(23	)	(3	)	—		(28	)
Earnings (loss) from continuing operations	344	344		305		348		(996	)	345		209	209		179		148		(534	)	211
Earnings (loss) from operation of discontinued operations	—	—		(1	)	1		—		—		—	—		(2	)	—		—		(2	)
Income tax (provision) benefit from discontinued operations	—	—		—		—		—		—		—	—		1		—		—		1
Earnings (loss) from discontinued operations	—	—		(1	)	1		—		—		—	—		(1	)	—		—		(1	)
Net earnings (loss)	344	344		304		349		(996	)	345		209	209		178		148		(534	)	210
Net (earnings) loss attributable to noncontrolling interests	—	—		—		(1	)	—		(1	)	—	—		—		(1	)	—		(1	)
Net earnings (loss) attributable to Celanese Corporation	344	344		304		348		(996	)	344		209	209		178		147		(534	)	209

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CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF OPERATIONS


	Three Months Ended June 30, 2017 - As Adjusted (Note 2)											Three Months Ended June 30, 2018
	Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)											(In $ millions)
Net sales	—	—		563		1,222		(275	)	1,510		—	—		586		1,566		(308	)	1,844
Cost of sales	—	—		(459	)	(966	)	280		(1,145	)	—	—		(457	)	(1,171	)	305		(1,323	)
Gross profit	—	—		104		256		5		365		—	—		129		395		(3	)	521
Selling, general and administrative expenses	—	—		(44	)	(73	)	—		(117	)	—	—		(51	)	(85	)	—		(136	)
Amortization of intangible assets	—	—		(1	)	(4	)	—		(5	)	—	—		(1	)	(6	)	—		(7	)
Research and development expenses	—	—		(7	)	(10	)	—		(17	)	—	—		(7	)	(11	)	—		(18	)
Other (charges) gains, net	—	—		(1	)	(1	)	—		(2	)	—	—		—		(3	)	—		(3	)
Foreign exchange gain (loss), net	—	—		—		(4	)	—		(4	)	—	—		—		3		—		3
Gain (loss) on disposition of businesses and assets, net	—	—		(2	)	—		—		(2	)	—	—		(3	)	1		—		(2	)
Operating profit (loss)	—	—		49		164		5		218		—	—		67		294		(3	)	358
Equity in net earnings (loss) of affiliates	231	233		163		34		(623	)	38		344	341		312		53		(994	)	56
Non-operating pension and other postretirement employee benefit (expense) income	—	—		20		2		—		22		—	—		24		2		—		26
Interest expense	—	(6	)	(24	)	(8	)	8		(30	)	—	(5	)	(31	)	(8	)	12		(32	)
Interest income	—	6		1		2		(8	)	1		—	10		2		2		(14	)	—
Dividend income - cost investments	—	—		—		30		(1	)	29
Dividend income - equity investments												—	—		—		32		2		34
Other income (expense), net	—	(1	)	1		3		—		3		—	(1	)	—		1		—		—
Earnings (loss) from continuing operations before tax	231	232		210		227		(619	)	281		344	345		374		376		(997	)	442
Income tax (provision) benefit	—	(1	)	(8	)	(34	)	3		(40	)	—	(1	)	(69	)	(28	)	1		(97	)
Earnings (loss) from continuing operations	231	231		202		193		(616	)	241		344	344		305		348		(996	)	345
Earnings (loss) from operation of discontinued operations	—	—		—		(9	)	—		(9	)	—	—		(1	)	1		—		—
Income tax (provision) benefit from discontinued operations	—	—		—		1		—		1		—	—		—		—		—		—
Earnings (loss) from discontinued operations	—	—		—		(8	)	—		(8	)	—	—		(1	)	1		—		—
Net earnings (loss)	231	231		202		185		(616	)	233		344	344		304		349		(996	)	345
Net (earnings) loss attributable to noncontrolling interests	—	—		—		(2	)	—		(2	)	—	—		—		(1	)	—		(1	)
Net earnings (loss) attributable to Celanese Corporation	231	231		202		183		(616	)	231		344	344		304		348		(996	)	344

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF OPERATIONS


	Six Months Ended June 30, 2018											Six Months Ended June 30, 2019
	Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)											(In $ millions)
Net sales	—	—		1,168		3,138		(611	)	3,695		—	—		1,210		2,671		(602	)	3,279
Cost of sales	—	—		(905	)	(2,365	)	611		(2,659	)	—	—		(901	)	(2,097	)	595		(2,403	)
Gross profit	—	—		263		773		—		1,036		—	—		309		574		(7	)	876
Selling, general and administrative expenses	—	—		(110	)	(173	)	—		(283	)	—	—		(79	)	(159	)	—		(238	)
Amortization of intangible assets	—	—		(2	)	(11	)	—		(13	)	—	—		(4	)	(8	)	—		(12	)
Research and development expenses	—	—		(15	)	(21	)	—		(36	)	—	—		(13	)	(20	)	—		(33	)
Other (charges) gains, net	—	—		—		(3	)	—		(3	)	—	—		(5	)	(89	)	—		(94	)
Foreign exchange gain (loss), net	—	—		—		2		—		2		—	—		—		6		—		6
Gain (loss) on disposition of businesses and assets, net	—	—		(5	)	3		—		(2	)	—	—		(4	)	5		—		1
Operating profit (loss)	—	—		131		570		—		701		—	—		204		309		(7	)	506
Equity in net earnings (loss) of affiliates	707	701		586		106		(1,986	)	114		546	547		339		77		(1,420	)	89
Non-operating pension and other postretirement employee benefit (expense) income	—	—		47		5		—		52		—	—		31		3		—		34
Interest expense	—	(10	)	(60	)	(17	)	22		(65	)	—	(19	)	(66	)	(20	)	45		(60	)
Refinancing expense												—	(4	)	—		—		—		(4	)
Interest income	—	18		4		4		(24	)	2		—	31		13		4		(45	)	3
Dividend income - cost investments	—	—		—		64		2		66
Dividend income - equity investments												—	—		—		62		—		62
Other income (expense), net	—	—		—		4		—		4		—	(3	)	—		(3	)	—		(6	)
Earnings (loss) from continuing operations before tax	707	709		708		736		(1,986	)	874		546	552		521		432		(1,427	)	624
Income tax (provision) benefit	—	(2	)	(105	)	(55	)	—		(162	)	—	(6	)	(30	)	(39	)	1		(74	)
Earnings (loss) from continuing operations	707	707		603		681		(1,986	)	712		546	546		491		393		(1,426	)	550
Earnings (loss) from operation of discontinued operations	—	—		(1	)	(1	)	—		(2	)	—	—		(3	)	—		—		(3	)
Income tax (provision) benefit from discontinued operations	—	—		—		—		—		—		—	—		1		—		—		1
Earnings (loss) from discontinued operations	—	—		(1	)	(1	)	—		(2	)	—	—		(2	)	—		—		(2	)
Net earnings (loss)	707	707		602		680		(1,986	)	710		546	546		489		393		(1,426	)	548
Net (earnings) loss attributable to noncontrolling interests	—	—		—		(3	)	—		(3	)	—	—		—		(2	)	—		(2	)
Net earnings (loss) attributable to Celanese Corporation	707	707		602		677		(1,986	)	707		546	546		489		391		(1,426	)	546

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF OPERATIONS


	Six Months Ended June 30, 2017 - As Adjusted (Note 2)											Six Months Ended June 30, 2018
	Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor	Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)											(In $ millions)
Net sales	—	—		1,152		2,399		(570	)	2,981		—	—		1,168		3,138		(611	)	3,695
Cost of sales	—	—		(904	)	(1,932	)	570		(2,266	)	—	—		(905	)	(2,365	)	611		(2,659	)
Gross profit	—	—		248		467		—		715		—	—		263		773		—		1,036
Selling, general and administrative expenses	—	—		(78	)	(142	)	—		(220	)	—	—		(110	)	(173	)	—		(283	)
Amortization of intangible assets	—	—		(2	)	(7	)	—		(9	)	—	—		(2	)	(11	)	—		(13	)
Research and development expenses	—	—		(14	)	(20	)	—		(34	)	—	—		(15	)	(21	)	—		(36	)
Other (charges) gains, net	—	—		(7	)	(50	)	—		(57	)	—	—		—		(3	)	—		(3	)
Foreign exchange gain (loss), net	—	—		—		(4	)	—		(4	)	—	—		—		2		—		2
Gain (loss) on disposition of businesses and assets, net	—	—		(4	)	1		—		(3	)	—	—		(5	)	3		—		(2	)
Operating profit (loss)	—	—		143		245		—		388		—	—		131		570		—		701
Equity in net earnings (loss) of affiliates	414	407		264		77		(1,077	)	85		707	701		586		106		(1,986	)	114
Non-operating pension and other postretirement employee benefit (expense) income	—	—		40		4		—		44		—	—		47		5		—		52
Interest expense	—	(12	)	(47	)	(15	)	15		(59	)	—	(10	)	(60	)	(17	)	22		(65	)
Interest income	—	12		2		2		(15	)	1		—	18		4		4		(24	)	2
Dividend income - cost investments	—	—		—		59		(1	)	58
Dividend income - equity investments												—	—		—		64		2		66
Other income (expense), net	—	(1	)	1		4		—		4		—	—		—		4		—		4
Earnings (loss) from continuing operations before tax	414	406		403		376		(1,078	)	521		707	709		708		736		(1,986	)	874
Income tax (provision) benefit	—	8		(71	)	(33	)	—		(96	)	—	(2	)	(105	)	(55	)	—		(162	)
Earnings (loss) from continuing operations	414	414		332		343		(1,078	)	425		707	707		603		681		(1,986	)	712
Earnings (loss) from operation of discontinued operations	—	—		—		(9	)	—		(9	)	—	—		(1	)	(1	)	—		(2	)
Income tax (provision) benefit from discontinued operations	—	—		—		1		—		1		—	—		—		—		—		—
Earnings (loss) from discontinued operations	—	—		—		(8	)	—		(8	)	—	—		(1	)	(1	)	—		(2	)
Net earnings (loss)	414	414		332		335		(1,078	)	417		707	707		602		680		(1,986	)	710
Net (earnings) loss attributable to noncontrolling interests	—	—		—		(3	)	—		(3	)	—	—		—		(3	)	—		(3	)
Net earnings (loss) attributable to Celanese Corporation	414	414		332		332		(1,078	)	414		707	707		602		677		(1,986	)	707

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Three Months Ended June 30, 2018												Three Months Ended June 30, 2019
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)												(In $ millions)
Net earnings (loss)	344		344		304		349		(996	)	345		209		209		178		148		(534	)	210
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on marketable securities	—		—		5		13		(18	)	—
Foreign currency translation	(66	)	(66	)	(109	)	(132	)	307		(66	)
Foreign currency translation gain (loss)													(11	)	(11	)	2		4		5		(11	)
Gain (loss) on cash flow hedges	6		6		5		6		(17	)	6		(13	)	(13	)	(3	)	(3	)	19		(13	)
Total other comprehensive income (loss), net of tax	(60	)	(60	)	(99	)	(113	)	272		(60	)	(24	)	(24	)	(1	)	1		24		(24	)
Total comprehensive income (loss), net of tax	284		284		205		236		(724	)	285		185		185		177		149		(510	)	186
Comprehensive (income) loss attributable to noncontrolling interests	—		—		—		(1	)	—		(1	)	—		—		—		(1	)	—		(1	)
Comprehensive income (loss) attributable to Celanese Corporation	284		284		205		235		(724	)	284		185		185		177		148		(510	)	185


	Three Months Ended June 30, 2017									Three Months Ended June 30, 2018
	Parent Guarantor	Issuer	Subsidiary Guarantors	Non- Guarantors		Eliminations		Consolidated		Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)									(In $ millions)
Net earnings (loss)	231	231	202	185		(616	)	233		344		344		304		349		(996	)	345
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on marketable securities	1	1	1	1		(3	)	1		—		—		5		13		(18	)	—
Foreign currency translation	78	78	96	119		(293	)	78
Foreign currency translation gain (loss)										(66	)	(66	)	(109	)	(132	)	307		(66	)
Gain (loss) on cash flow hedges	1	1	1	1		(3	)	1		6		6		5		6		(17	)	6
Total other comprehensive income (loss), net of tax	80	80	98	121		(299	)	80		(60	)	(60	)	(99	)	(113	)	272		(60	)
Total comprehensive income (loss), net of tax	311	311	300	306		(915	)	313		284		284		205		236		(724	)	285
Comprehensive (income) loss attributable to noncontrolling interests	—	—	—	(2	)	—		(2	)	—		—		—		(1	)	—		(1	)
Comprehensive income (loss) attributable to Celanese Corporation	311	311	300	304		(915	)	311		284		284		205		235		(724	)	284

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Six Months Ended June 30, 2018												Six Months Ended June 30, 2019
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)												(In $ millions)
Net earnings (loss)	707		707		602		680		(1,986	)	710		546		546		489		393		(1,426	)	548
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on marketable securities	—		—		5		13		(18	)	—
Foreign currency translation	(17	)	(17	)	(46	)	(58	)	121		(17	)
Foreign currency translation gain (loss)													(4	)	(4	)	(16	)	(20	)	40		(4	)
Gain (loss) on cash flow hedges	5		5		4		5		(14	)	5		(16	)	(16	)	3		5		8		(16	)
Pension and postretirement benefits	1		1		1		1		(3	)	1
Total other comprehensive income (loss), net of tax	(11	)	(11	)	(36	)	(39	)	86		(11	)	(20	)	(20	)	(13	)	(15	)	48		(20	)
Total comprehensive income (loss), net of tax	696		696		566		641		(1,900	)	699		526		526		476		378		(1,378	)	528
Comprehensive (income) loss attributable to noncontrolling interests	—		—		—		(3	)	—		(3	)	—		—		—		(2	)	—		(2	)
Comprehensive income (loss) attributable to Celanese Corporation	696		696		566		638		(1,900	)	696		526		526		476		376		(1,378	)	526


	Six Months Ended June 30, 2017												Six Months Ended June 30, 2018
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)												(In $ millions)
Net earnings (loss)	414		414		332		335		(1,078	)	417		707		707		602		680		(1,986	)	710
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on marketable securities	1		1		1		1		(3	)	1		—		—		5		13		(18	)	—
Foreign currency translation	106		106		126		158		(390	)	106
Foreign currency translation gain (loss)													(17	)	(17	)	(46	)	(58	)	121		(17	)
Gain (loss) on cash flow hedges	(1	)	(1	)	(1	)	(1	)	3		(1	)	5		5		4		5		(14	)	5
Pension and postretirement benefits	5		5		4		6		(15	)	5
Pension and postretirement benefits gain (loss)													1		1		1		1		(3	)	1
Total other comprehensive income (loss), net of tax	111		111		130		164		(405	)	111		(11	)	(11	)	(36	)	(39	)	86		(11	)
Total comprehensive income (loss), net of tax	525		525		462		499		(1,483	)	528		696		696		566		641		(1,900	)	699
Comprehensive (income) loss attributable to noncontrolling interests	—		—		—		(3	)	—		(3	)	—		—		—		(3	)	—		(3	)
Comprehensive income (loss) attributable to Celanese Corporation	525		525		462		496		(1,483	)	525		696		696		566		638		(1,900	)	696

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATING BALANCE SHEET


	As of June 30, 2018							As of June 30, 2019
	Parent Guarantor	Issuer	Subsidiary Guarantors	Non- Guarantors	Eliminations		Consolidated	Parent Guarantor	Issuer	Subsidiary Guarantors	Non- Guarantors	Eliminations		Consolidated
	(In $ millions)							(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents	2	—	93	613	—		708	—	—	51	440	—		491
Trade receivables - third party and affiliates	—	—	125	1,180	(149	)	1,156	—	—	100	991	(120	)	971
Non-trade receivables, net	37	506	452	416	(1,122	)	289	40	1,025	1,631	611	(2,975	)	332
Inventories, net	—	—	259	710	(52	)	917	—	—	327	739	(55	)	1,011
Marketable securities, at fair value	—	—	32	—	—		32	—	—	27	—	—		27
Other assets	—	50	16	75	(90	)	51	—	28	23	39	(46	)	44
Total current assets	39	556	977	2,994	(1,413	)	3,153	40	1,053	2,159	2,820	(3,196	)	2,876
Investments in affiliates	3,341	4,510	4,329	844	(12,061	)	963	3,760	4,937	4,126	832	(12,696	)	959
Property, plant and equipment, net	—	—	1,200	2,524	—		3,724	—	—	1,349	2,293	—		3,642
Operating lease right-of-use assets								—	—	55	154	—		209
Deferred income taxes	—	13	—	172	(22	)	163	—	—	—	92	(2	)	90
Other assets	—	1,565	240	192	(1,605	)	392	—	1,658	176	452	(1,966	)	320
Goodwill	—	—	314	755	—		1,069	—	—	399	684	—		1,083
Intangible assets, net	—	—	103	222	—		325	—	—	129	198	—		327
Total assets	3,380	6,644	7,163	7,703	(15,101	)	9,789	3,800	7,648	8,393	7,525	(17,860	)	9,506
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	—	169	163	286	(252	)	366	910	197	819	752	(2,359	)	319
Trade payables - third party and affiliates	—	—	327	641	(149	)	819	25	1	270	588	(120	)	764
Other liabilities	—	74	267	445	(472	)	314	—	41	151	268	(158	)	302
Income taxes payable	—	—	488	113	(490	)	111	—	—	500	28	(505	)	23
Total current liabilities	—	243	1,245	1,485	(1,363	)	1,610	935	239	1,740	1,636	(3,142	)	1,408
Noncurrent Liabilities
Long-term debt	—	3,060	1,525	213	(1,570	)	3,228	—	3,590	1,678	114	(1,938	)	3,444
Deferred income taxes	—	—	67	203	(22	)	248	—	15	85	167	(2	)	265
Uncertain tax positions	—	—	9	142	(2	)	149	1	2	5	163	—		171
Benefit obligations	—	—	269	288	—		557	—	—	242	303	—		545
Operating lease liabilities								—	—	44	148	—		192
Other liabilities	—	—	105	147	(42	)	210	—	42	98	125	(38	)	227
Total noncurrent liabilities	—	3,060	1,975	993	(1,636	)	4,392	1	3,649	2,152	1,020	(1,978	)	4,844
Total Celanese Corporation stockholders' equity	3,380	3,341	3,943	4,818	(12,102	)	3,380	2,864	3,760	4,501	4,479	(12,740	)	2,864
Noncontrolling interests	—	—	—	407	—		407	—	—	—	390	—		390
Total equity	3,380	3,341	3,943	5,225	(12,102	)	3,787	2,864	3,760	4,501	4,869	(12,740	)	3,254
Total liabilities and equity	3,380	6,644	7,163	7,703	(15,101	)	9,789	3,800	7,648	8,393	7,525	(17,860	)	9,506

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATING BALANCE SHEET



	As of December 31, 2018
	Parent Guarantor	Issuer	Subsidiary Guarantors	Non- Guarantors	Eliminations		Consolidated
	(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents	—	—	30	409	—		439
Trade receivables - third party and affiliates	—	—	96	1,040	(119	)	1,017
Non-trade receivables, net	40	551	797	697	(1,784	)	301
Inventories, net	—	—	329	765	(48	)	1,046
Marketable securities, at fair value	—	—	31	—	—		31
Other assets	—	24	10	37	(31	)	40
Total current assets	40	575	1,293	2,948	(1,982	)	2,874
Investments in affiliates	3,503	4,820	4,678	855	(12,877	)	979
Property, plant and equipment, net	—	—	1,289	2,430	—		3,719
Deferred income taxes	—	—	—	86	(2	)	84
Other assets	—	1,658	142	461	(1,971	)	290
Goodwill	—	—	399	658	—		1,057
Intangible assets, net	—	—	132	178	—		310
Total assets	3,543	7,053	7,933	7,616	(16,832	)	9,313
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	544	333	465	258	(1,039	)	561
Trade payables - third party and affiliates	13	1	342	583	(120	)	819
Other liabilities	1	87	267	258	(270	)	343
Income taxes payable	—	—	475	88	(507	)	56
Total current liabilities	558	421	1,549	1,187	(1,936	)	1,779
Noncurrent Liabilities
Long-term debt	—	3,104	1,679	127	(1,940	)	2,970
Deferred income taxes	—	15	85	157	(2	)	255
Uncertain tax positions	—	—	6	152	—		158
Benefit obligations	—	—	250	314	—		564
Other liabilities	1	10	99	138	(40	)	208
Total noncurrent liabilities	1	3,129	2,119	888	(1,982	)	4,155
Total Celanese Corporation stockholders' equity	2,984	3,503	4,265	5,146	(12,914	)	2,984
Noncontrolling interests	—	—	—	395	—		395
Total equity	2,984	3,503	4,265	5,541	(12,914	)	3,379
Total liabilities and equity	3,543	7,053	7,933	7,616	(16,832	)	9,313

As of December 31, 2017

Parent
Guarantor
Issuer
Subsidiary
Guarantors

Non-
Guarantors
Eliminations Consolidated
(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents —
—
230
346
—
576
Trade receivables - third party and affiliates —
—
89
988
(91 ) 986
Non-trade receivables, net 38
482
279
385
(940 ) 244
Inventories, net —
—
277
672
(49 ) 900
Marketable securities, at fair value —
—
32
—
—
32
Other assets —
60
12
93
(111 ) 54
Total current assets 38
542
919
2,484
(1,191 ) 2,792
Investments in affiliates 2,850
4,283
3,916
861
(10,934 ) 976
Property, plant and equipment, net —
—
1,145
2,617
—
3,762
Deferred income taxes —
6
206
158
(4 ) 366
Other assets —
1,295
171
165
(1,293 ) 338
Goodwill —
—
314
689
—
1,003
Intangible assets, net —
—
48
253
—
301
Total assets 2,888
6,126
6,719
7,227
(13,422 ) 9,538
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates —
76
148
369
(267 ) 326
Trade payables - third party and affiliates —
1
300
598
(92 ) 807
Other liabilities —
71
302
273
(292 ) 354
Income taxes payable —
—
471
92
(491 ) 72
Total current liabilities —
148
1,221
1,332
(1,142 ) 1,559
Noncurrent Liabilities
Long-term debt —
3,128
1,254
233
(1,300 ) 3,315
Deferred income taxes —
—
—
215
(4 ) 211
Uncertain tax positions —
—
1
157
(2 ) 156
Benefit obligations —
—
277
308
—
585
Other liabilities —
—
255
158
—
413
Total noncurrent liabilities —
3,128
1,787
1,071
(1,306 ) 4,680
Total Celanese Corporation stockholders' equity 2,888
2,850
3,711
4,412
(10,974 ) 2,887
Noncontrolling interests —
—
—
412
—
412
Total equity 2,888
2,850
3,711
4,824
(10,974 ) 3,299
Total liabilities and equity 2,888
6,126
6,719
7,227
(13,422 ) 9,538

Table of Contents

CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF CASH FLOWS


	Six Months Ended June 30, 2018												Six Months Ended June 30, 2019
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated		Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)												(In $ millions)
Net cash provided by (used in) operating activities	238		432		115		630		(687	)	728		636		(31	)	1,052		635		(1,561	)	731
Investing Activities
Capital expenditures on property, plant and equipment	—		—		(109	)	(56	)	—		(165	)	—		—		(83	)	(61	)	—		(144	)
Acquisitions, net of cash acquired	—		—		(144	)	—		—		(144	)	—		—		(31	)	(60	)	—		(91	)
Proceeds from sale of businesses and assets, net	—		—		—		9		—		9
Return of capital from subsidiary	—		—		218		—		(218	)	—		—		—		7		—		(7	)	—
Contributions to subsidiary	—		—		(16	)	—		16		—
Intercompany loan receipts (disbursements)	—		(272	)	(10	)	—		282		—		—		—		(653	)	—		653		—
Other, net	—		—		(7	)	(24	)	—		(31	)	—		—		2		(10	)	—		(8	)
Net cash provided by (used in) investing activities	—		(272	)	(68	)	(71	)	80		(331	)	—		—		(758	)	(131	)	646		(243	)
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less	—		90		11		(51	)	(10	)	40		—		149		3		(4	)	(43	)	105
Proceeds from short-term borrowings	—		—		—		36		—		36		—		—		—		610		(610	)	—
Repayments of short-term borrowings	—		—		—		(39	)	—		(39	)	—		—		—		(12	)	—		(12	)
Proceeds from long-term debt	—		—		272		—		(272	)	—		—		499		—		—		—		499
Repayments of long-term debt	—		(12	)	(13	)	(18	)	—		(43	)	—		(335	)	(1	)	(12	)	—		(348	)
Purchases of treasury stock, including related fees	(100	)	—		—		—		—		(100	)	(488	)	—		—		—		—		(488	)
Dividends to parent	—		(238	)	(449	)	—		687		—		—		(272	)	(251	)	(1,038	)	1,561		—
Contributions from parent	—		—		—		16		(16	)	—
Series A common stock dividends	(136	)	—		—		—		—		(136	)
Common stock dividends													(148	)	—		—		—		—		(148	)
Return of capital to parent	—		—		—		(218	)	218		—		—		—		—		(7	)	7		—
(Distributions to) contributions from noncontrolling interests	—		—		—		(8	)	—		(8	)	—		—		—		(7	)	—		(7	)
Other, net	—		—		(5	)	(1	)	—		(6	)	—		(10	)	(24	)	(4	)	—		(38	)
Net cash provided by (used in) financing activities	(236	)	(160	)	(184	)	(283	)	607		(256	)	(636	)	31		(273	)	(474	)	915		(437	)
Exchange rate effects on cash and cash equivalents	—		—		—		(9	)	—		(9	)	—		—		—		1		—		1
Net increase (decrease) in cash and cash equivalents	2		—		(137	)	267		—		132		—		—		21		31		—		52
Cash and cash equivalents as of beginning of period	—		—		230		346		—		576		—		—		30		409		—		439
Cash and cash equivalents as of end of period	2		—		93		613		—		708		—		—		51		440		—		491

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CELANESE CORPORATION AND SUBSIDIARIES

UNAUDITED INTERIM CONSOLIDATING STATEMENT OF CASH FLOWS



	Six Months Ended June 30, 2018
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations		Consolidated
	(In $ millions)
Net cash provided by (used in) operating activities	238		432		115		630		(687	)	728
Investing Activities
Capital expenditures on property, plant and equipment	—		—		(109	)	(56	)	—		(165	)
Acquisitions, net of cash acquired	—		—		(144	)	—		—		(144	)
Proceeds from sale of businesses and assets, net	—		—		—		9		—		9
Return of capital from subsidiary	—		—		218		—		(218	)	—
Contributions to subsidiary	—		—		(16	)	—		16		—
Intercompany loan receipts (disbursements)	—		(272	)	(10	)	—		282		—
Other, net	—		—		(7	)	(24	)	—		(31	)
Net cash provided by (used in) investing activities	—		(272	)	(68	)	(71	)	80		(331	)
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less	—		90		11		(51	)	(10	)	40
Proceeds from short-term borrowings	—		—		—		36		—		36
Repayments of short-term borrowings	—		—		—		(39	)	—		(39	)
Proceeds from long-term debt	—		—		272		—		(272	)	—
Repayments of long-term debt	—		(12	)	(13	)	(18	)	—		(43	)
Purchases of treasury stock, including related fees	(100	)	—		—		—		—		(100	)
Dividends to parent	—		(238	)	(449	)	—		687		—
Contributions from parent	—		—		—		16		(16	)	—
Common stock dividends	(136	)	—		—		—		—		(136	)
Return of capital to parent	—		—		—		(218	)	218		—
(Distributions to) contributions from noncontrolling interests	—		—		—		(8	)	—		(8	)
Other, net	—		—		(5	)	(1	)	—		(6	)
Net cash provided by (used in) financing activities	(236	)	(160	)	(184	)	(283	)	607		(256	)
Exchange rate effects on cash and cash equivalents	—		—		—		(9	)	—		(9	)
Net increase (decrease) in cash and cash equivalents	2		—		(137	)	267		—		132
Cash and cash equivalents as of beginning of period	—		—		230		346		—		576
Cash and cash equivalents as of end of period	2		—		93		613		—		708

Six Months Ended June 30, 2017

Parent
Guarantor
Issuer
Subsidiary
Guarantors

Non-
Guarantors
Eliminations Consolidated
(In $ millions)
Net cash provided by (used in) operating activities 415
342
351
283
(901 ) 490
Investing Activities
Capital expenditures on property, plant and equipment —
—
(82 ) (34 ) —
(116 )
Acquisitions, net of cash acquired —
(11 ) (12 ) (264 ) 19
(268 )
Proceeds from sale of businesses and assets, net —
—
—
20
(19 ) 1
Return of capital from subsidiary —
—
9
—
(9 ) —
Contributions to subsidiary —
—
—
—
—
—
Intercompany loan receipts (disbursements) —
(74 ) (11 ) —
85
—
Other, net —
—
(1 ) (5 ) —
(6 )
Net cash provided by (used in) investing activities —
(85 ) (97 ) (283 ) 76
(389 )
Financing Activities
Net change in short-term borrowings with maturities of 3 months or less —
161
2
50
(11 ) 202
Proceeds from short-term borrowings —
—
—
104
—
104
Repayments of short-term borrowings —
—
—
(55 ) —
(55 )
Proceeds from long-term debt —
—
74
—
(74 ) —
Repayments of long-term debt —
—
(1 ) (57 ) —
(58 )
Purchases of treasury stock, including related fees (300 ) —
—
—
—
(300 )
Dividends to parent —
(415 ) (306 ) (180 ) 901
—
Stock option exercises 1
—
—
—
—
1
Series A common stock dividends (116 ) —
—
—
—
(116 )
Return of capital to parent —
—
—
(9 ) 9
—
(Distributions to) contributions from noncontrolling interests —
—
—
(8 ) —
(8 )
Other, net —
—
(17 ) (2 ) —
(19 )
Net cash provided by (used in) financing activities (415 ) (254 ) (248 ) (157 ) 825
(249 )
Exchange rate effects on cash and cash equivalents —
—
—
21
—
21
Net increase (decrease) in cash and cash equivalents —
3
6
(136 ) —
(127 )
Cash and cash equivalents as of beginning of period —
—
51
587
—
638
Cash and cash equivalents as of end of period —
3
57
451
—
511

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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, ~~2017~~2018 filed on February ~~9, 2018~~7, 2019 with the Securities and Exchange Commission ("SEC") as part of the Company's Annual Reporting on Form 10-K ("~~2017~~2018 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 ~~2017~~2018 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.

Risk Factors

See Part I - Item 1A. Risk Factors of our ~~2017~~2018 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;

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;

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market acceptance of our technology;

the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to us;

changes in tariffs, 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 ~~tax legislation in the US, commonly referred to as~~ the Tax Cuts and Jobs Act (the "TCJA") enacted in December 2017;

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, 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 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 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. Should one or more of these risks or uncertainties materialize, 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 ~~technology~~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 well as a leading global producer of high performance engineered polymers that are used in a variety of high-value applications.~~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 ~~paints and coatings, textiles,~~ automotive, ~~applications, consumer and medical applications, performance industrial applications, filtration applications, paper and packaging,~~ chemical additives, construction, consumer and industrial adhesives, consumer and medical, energy storage, filtration, food and beverage, ~~applications.~~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 in 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 ~~shared principles and objectives,~~differentiated business models and a clear focus on growth and value creation. Known for operational excellence, reliability and execution of our business strategies, we ~~deliver value to~~partner with our customers around the globe ~~with~~to deliver best-in-class technologies and solutions.

Effective January 1, 2018, we adopted Accounting Standards Update 2017-07, which clarifies the presentation and classification of the components of net periodic benefit costs in the unaudited interim consolidated statements of operations. See ~~Note 2 - Recent Accounting Pronouncements~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

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~~Also effective January 1, 2018, we reorganized our operating and reportable segments to align with recent structural and management reporting changes. See~~ ~~Note 19 - Segment Information~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

Results of Operations

Financial Highlights


	Three Months Ended June 30,						Six Months Ended June 30,
	2018		2017		Change		2018			2017		Change		Three Months Ended June 30,						Six Months Ended June 30,
			(As Adjusted) (Note 2)							(As Adjusted) (Note 2)				2019		2018		Change		2019		2018		Change
	(unaudited)													(unaudited)
	(In $ millions, except percentages)													(In $ millions, except percentages)
Statement of Operations Data
Net sales	1,844		1,510		334		3,695			2,981		714		1,592		1,844		(252	)	3,279		3,695		(416	)
Gross profit	521		365		156		1,036			715		321		423		521		(98	)	876		1,036		(160	)
Selling, general and administrative ("SG&A") expenses	(136	)	(117	)	(19	)	(283	)		(220	)	(63	)	(118	)	(136	)	18		(238	)	(283	)	45
Other (charges) gains, net	(3	)	(2	)	(1	)	(3	)		(57	)	54		(98	)	(3	)	(95	)	(94	)	(3	)	(91	)
Operating profit (loss)	358		218		140		701			388		313		186		358		(172	)	506		701		(195	)
Equity in net earnings (loss) of affiliates	56		38		18		114			85		29		39		56		(17	)	89		114		(25	)
Non-operating pension and other postretirement employee benefit (expense) income	26		22		4		52		��	44		8		17		26		(9	)	34		52		(18	)
Interest expense	(32	)	(30	)	(2	)	(65	)		(59	)	(6	)	(29	)	(32	)	3		(60	)	(65	)	5
Dividend income - cost investments	34		29		5		66			58		8
Dividend income - equity investments														30		34		(4	)	62		66		(4	)
Earnings (loss) from continuing operations before tax	442		281		161		874			521		353		239		442		(203	)	624		874		(250	)
Earnings (loss) from continuing operations	345		241		104		712			425		287		211		345		(134	)	550		712		(162	)
Earnings (loss) from discontinued operations	—		(8	)	8		(2	)		(8	)	6		(1	)	—		(1	)	(2	)	(2	)	—
Net earnings (loss)	345		233		112		710			417		293		210		345		(135	)	548		710		(162	)
Net earnings (loss) attributable to Celanese Corporation	344		231		113		707			414		293		209		344		(135	)	546		707		(161	)
Other Data
Depreciation and amortization	86		75		11		165			146		19		84		86		(2	)	167		165		2
SG&A expenses as a percentage of Net sales	7.4	%	7.7	%			7.7	%		7.4	%			7.4	%	7.4	%			7.3	%	7.7	%
Operating margin⁽¹⁾	19.4	%	14.4	%			19.0	%		13.0	%			11.7	%	19.4	%			15.4	%	19.0	%
Other (charges) gains, net
Restructuring	(3	)	(1	)	(2	)	(3	)		(3	)	—		(15	)	(3	)	(12	)	(14	)	(3	)	(11	)
InfraServ ownership change	—		(4	)	4		—			(4	)	4
Asset impairments														(83	)	—		(83	)	(83	)	—		(83	)
Plant/office closures	—		3		(3	)	—			(50	)	50		—		—		—		(1	)	—		(1	)
Commercial disputes														—		—		—		4		—		4
Total Other (charges) gains, net	(3	)	(2	)	(1	)	(3	)		(57	)	54		(98	)	(3	)	(95	)	(94	)	(3	)	(91	)

______________________________


⁽¹⁾	Defined as Operating profit (loss) divided by Net sales.

Table of Contents


	As of June 30, 2018	As of December 31, 2017	As of June 30, 2019	As of December 31, 2018
	(unaudited)		(unaudited)
	(In $ millions)		(In $ millions)
Balance Sheet Data
Cash and cash equivalents	708	576	491	439

Short-term borrowings and current installments of long-term debt - third party and affiliates	366	326	319	561
Long-term debt, net of unamortized deferred financing costs	3,228	3,315	3,444	2,970
Total debt	3,594	3,641	3,763	3,531

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:

Three Months Ended June 30, ~~2018~~2019 Compared to Three Months Ended June 30, ~~2017~~2018


	Volume	Price		Currency	Other		Total		Volume		Price		Currency		Other	Total
	(unaudited)								(unaudited)
	(In percentages)								(In percentages)
Engineered Materials	11	7		4	—		22		(8	)	—		(3	)	—	(11	)
Acetate Tow	1	(2	)	—	—		(1	)	1		1		(1	)	—	1
Industrial Specialties	—	5		5	—		10
Acetyl Intermediates	8	22		4	(1	)	33
Acetyl Chain									(1	)	(14	)	(3	)	—	(18	)
Total Company	7	13		4	(2	)	22		(3	)	(8	)	(3	)	—	(14	)

Six Months Ended June 30, ~~2018~~2019 Compared to Six Months Ended June 30, ~~2017~~2018


	Volume		Price		Currency	Other		Total		Volume		Price		Currency		Other	Total
	(unaudited)									(unaudited)
	(In percentages)									(In percentages)
Engineered Materials	15		5		5	—		25		(7	)	4		(2	)	—	(5	)
Acetate Tow	(5	)	(3	)	1	—		(7	)	—		1		(1	)	—	—
Industrial Specialties	(1	)	6		6	—		11
Acetyl Intermediates	5		27		5	—		37
Acetyl Chain										(3	)	(10	)	(3	)	—	(16	)
Total Company	7		14		5	(2	)	24		(4	)	(4	)	(3	)	—	(11	)

Consolidated Results

Three Months Ended June 30, ~~2018~~2019 Compared to Three Months Ended June 30, ~~2017~~2018

Net sales ~~increased $334~~decreased $252 million, or ~~22%~~14%, for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower pricing ~~across most~~in our Acetyl Chain segment;

lower volume in our Engineered Materials and Acetyl Chain segments, primarily due to slower global economic conditions; and

an unfavorable currency impact in our Acetyl Chain and Engineered Materials segments.

Operating profit decreased $172 million, or 48%, for the three months ended June 30, 2019 compared to the same period in 2018, primarily due to:

lower Net sales in our Acetyl Chain and Engineered Materials segments; and

Table of ~~our segments;~~Contents

•

~~higher volume~~an unfavorable impact of $95 million to Other (charges) gains, net. During the three months ended June 30, 2019, we recorded an $83 million long-lived asset impairment loss in our ~~Engineered Materials~~Acetate Tow segment ~~primarily~~ related to the closure of our ~~base business driven by new project launches and pipeline growth, and Net sales generated from acquisitions.~~acetate flake manufacturing operations in Ocotlán, Mexico. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information;

~~higher volume in~~partially offset by:

lower raw material costs within our Acetyl ~~Intermediates segment, primarily due to higher demand for acetic acid and solvents; and~~Chain segment.

~~Table~~Equity in net earnings (loss) of ~~Contents~~

~~a favorable currency impact across most of our segments resulting from a strong Euro relative to the US dollar.~~

~~Operating profit increased $140~~affiliates decreased $17 million ~~or 64%,~~ for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher Net sales;~~

~~partially offset by:~~

~~higher raw material costs across most~~a decrease in equity investment in earnings of $10 million from our ~~segments;~~

~~higher spending~~Ibn Sina strategic affiliate as a result of ~~$24 million and $23 million in our Acetyl Intermediates and Engineered Materials segments, respectively; and~~

~~higher functional spending and incentive compensation costs of $16 million.~~plant turnaround activity.

Our effective income tax rate for the three months ended June 30, ~~2018~~2019 was ~~22%~~12% compared to ~~14%~~22% for the same period in ~~2017.~~2018. The ~~higher~~lower effective income tax rate for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017 is~~2018 was primarily due to ~~increases~~2019 reductions in the valuation ~~allowances related to~~allowance on foreign tax ~~credit carryforwards partially offset by the release~~credits that resulted from greater forecasted utilization of ~~valuation allowances on net deferred tax assets in Singapore, reduction of the US statutory tax rate due~~credits prior to the ~~TCJA and reduced losses not providing tax benefits in certain jurisdictions.~~expiration of their carryforward period.

See Note 15 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.

Six Months Ended June 30, ~~2018~~2019 Compared to Six Months Ended June 30, ~~2017~~2018

Net sales ~~increased $714~~decreased $416 million, or ~~24%~~11%, for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower pricing in our Acetyl Chain segment;

lower volume across most of our ~~segments;~~segments, primarily due to slower global economic conditions; and

~~a favorable~~an unfavorable currency impact ~~across all of~~within our ~~segments resulting from a strong Euro relative to the US dollar;~~Acetyl Chain and Engineered Materials segments;

•

~~higher volume in our Engineered Materials segment, primarily related to our base business driven by new project launches and pipeline growth, and Net sales generated from acquisitions. See~~ ~~Note 3 - Acquisitions, Dispositions and Plant Closures~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

partially offset by:

higher pricing in our Engineered Materials segment.

Operating profit ~~increased $313~~decreased $195 million, or ~~81%~~28%, for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower Net ~~sales; and~~

•

a favorable impact of $50 million to Other (charges) gains, net. During the six months ended June 30, 2017, we provided notice of termination of a contract with a key raw materials supplier at our ethanol production unit in Nanjing, China. As a result, we recorded a $24 million contract termination charge and an $18 million reduction to our non-income tax receivable, which did not recur in the current year. See ~~Note 14 - Other (Charges) Gains, Net~~ ~~in the accompanying unaudited interim consolidated financial statements for further information;~~

~~partially offset by:~~

~~higher raw material costs~~sales across most of our segments; and

~~higher spending~~an unfavorable impact of ~~$44~~$91 million ~~and $24~~to Other (charges) gains, net. During the six months ended June 30, 2019, we recorded an $83 million long-lived asset impairment loss in our ~~Engineered Materials and~~Acetate Tow segment related to the closure of our acetate flake manufacturing operations in Ocotlán, Mexico;

partially offset by:

lower raw material costs within our Acetyl ~~Intermediates segments, respectively;~~Chain segment.

Equity in net earnings (loss) of affiliates decreased $25 million for the six months ended June 30, 2019 compared to the same period in 2018, primarily due to:

a decrease in equity investment in earnings of $14 million from our Polyplastics Co., Ltd. ("Polyplastics") strategic affiliate as a result of softer market conditions in China; and

~~higher functional and project spending, and incentive compensation costs~~a decrease in equity investment in earnings of ~~$46 million.~~$11 million from our Ibn Sina strategic affiliate as a result of plant turnaround activity.

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Our effective income tax rate for the six months ended June 30, 2019 was 12% compared to 19% for the same period in 2018. The lower effective income tax rate for the six months ended June 30, 2019 compared to the same period in 2018 was primarily due to 2019 reductions in the valuation allowance on foreign tax credits that resulted from greater forecasted utilization of credits prior to the expiration of their carryforward period.

Business Segments

Engineered Materials


	Three Months Ended June 30,				Change		% Change		Six Months Ended June 30,				Change	% Change		Three Months Ended June 30,						Change		% Change			Six Months Ended June 30,					Change		% Change
	2018		2017			2018			2017			2019	Change	% Change		2018					2019			% Change		2018						Change		% Change
	(unaudited)															(unaudited)
	(In $ millions, except percentages)															(In $ millions, except percentages)
Net sales	664		546		Change	118	% Change		21.6	%	1,329		1,060	269			25.4	%	593			Change	664		(71	)		(10.7	)%		1,256		1,329		(73	)	(5.5	)%
Net Sales Variance
Volume	11	%							15	%						(8	)%										(7	)%
Price	7	%							5	%						—	%										4	%
Currency	4	%							5	%						(3	)%										(2	)%
Other	—	%							—	%						—	%										—	%
Other (charges) gains, net	—		(2	)	2		(100.0	)%	—		(2	)	2	(100.0	)%	(8	)		—			(8	)	(100.0	)%		7			—		7		100.0	%
Operating profit (loss)	114		105		9		8.6	%	241		209		32	15.3	%	103			114			(11	)	(9.6	)%		247			241		6		2.5	%
Operating margin	17.2	%	19.2	%					18.1	%	19.7	%				17.4	%		17.2	%							19.7	%		18.1	%
Equity in net earnings (loss) of affiliates	53		38		15		39.5	%	107		81		26	32.1	%	36			53			(17	)	(32.1	)%		82			107		(25	)	(23.4	)%
Depreciation and amortization	33		27		6		22.2	%	65		52		13	25.0	%	31			33			(2	)	(6.1	)%		63			65		(2	)	(3.1	)%

Our Engineered Materials segment includes our engineered materials business, our food ingredients business and certain strategic affiliates. Our 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 our strategic affiliates, our engineered materials business is a leading participant in the global specialty polymers industry. Our food ingredients business is 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.

The pricing of products bywithin the Engineered Materials segment is primarily based on the value of the material we produce and is ~~largely~~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.

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018 ~~Compared to~~ ~~Three Months Ended June 30, 2017~~

Net sales ~~increased~~decreased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower volume within our base business driven by ~~new project launches~~slower global economic conditions and ~~pipeline growth, and Net sales generated from acquisitions;~~

~~higher pricing for most of our products due to~~ customer ~~mix;~~destocking; and

~~a favorable~~an unfavorable currency impact resulting from a ~~strong~~weaker Euro relative to the US dollar.

Operating profit ~~increased~~decreased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower Net sales; and


•	an unfavorable impact of $8 million to Other (charges) gains, net. During the three months ended June 30, 2019, we recorded $8 million in employee termination benefits, primarily related to business optimization projects. See Note 14 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information;

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partially offset by:

~~higher~~lower spending of ~~$23~~$5 million, primarily related to ~~our acquisitions~~productivity initiatives and lower energy costs of ~~Omni Plastics, L.L.C. ("Omni Plastics") and the nylon compounding division of Nilit Group ("Nilit"), as these acquired businesses incur ongoing spending;~~

~~higher energy and raw material costs, primarily for methanol; and~~

~~higher depreciation and amortization expense, primarily related~~$4 million due to ~~our acquired businesses.~~

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lower pricing.

Equity in net earnings (loss) of affiliates ~~increased~~decreased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~an increase~~a decrease in equity investment in earnings of $8$10 million from our Ibn Sina strategic affiliate as a result of ~~an increase~~plant turnaround activity; and

a decrease in our indirect economic ownership from 25% to 32.5% due to the startup of its polyoxymethylene ("POM") production facility in Saudi Arabia during the three months ended December 31, 2017 and an increase in methyl tertiary-butyl ether pricing. Equityequity investment in earnings ~~also increased by $4~~of $5 million from our Polyplastics ~~Co., Ltd. ("PPC")~~ strategic ~~affiliate~~affiliates as a result of ~~higher POM pricing.~~softer market conditions in China.

Six Months Ended June 30, ~~2018~~2019 Compared to Six Months Ended June 30, ~~2017~~2018

Net sales ~~increased~~decreased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower volume within our base business driven by ~~new project launches~~slower global economic conditions and ~~pipeline growth,~~customer destocking; and ~~Net sales generated~~

an unfavorable currency impact resulting from ~~acquisitions;~~a weaker Euro relative to the US dollar;

partially offset by:

higher pricing for most of our products, primarily due to ~~customer mix;~~pricing efforts to align with rising raw material and

~~a favorable currency impact resulting from a strong Euro relative to the US dollar.~~ distribution costs, as well as product mix.

Operating profit increased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~a favorable pricing impact within Net sales;

~~partially offset by:~~

~~higher~~lower spending of ~~$44~~$4 million, primarily related to ~~our acquisitions~~productivity initiatives and lower energy costs of ~~Nilit~~$4 million due to lower pricing; and ~~Omni Plastics, as these acquired businesses incur ongoing spending, as well as increased distribution costs;~~

a favorable impact of $7 million to Other (charges) gains, net. During the six months ended June 30, 2019, we recorded a $15 million gain related to a settlement of a commercial dispute from a previous acquisition, partially offset by $8 million in employee termination benefits, primarily related to business optimization projects;

largely offset by:

an unfavorable volume and currency impact within Net sales; and

higher raw material costs, primarily for ~~methanol, and freight costs; and~~

~~higher depreciation and amortization expense, primarily related to our acquired businesses.~~polymers.

Equity in net earnings (loss) of affiliates ~~increased~~decreased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~an increase~~a decrease in equity investment in earnings of ~~$17~~$14 million from our Polyplastics strategic affiliate as a result of softer market conditions in China; and

a decrease in equity investment in earnings of $11 million from our Ibn Sina strategic affiliate ~~primarily~~ as a result of an increase in our indirect economic ownership from 25% to 32.5% due to the startup of its POM production facility in Saudi Arabia during the three months ended December 31, 2017 and $3 million from our PPC strategic affiliate as a result of higher POM pricing.plant turnaround activity.

On February 1, 2018, we completed the acquisition of 100% of the ownership interests of Omni Plastics. Omni Plastics specializes in custom compounding of various engineered thermoplastic materials. The acquisition further strengthens our global asset base by adding compounding capacity in the Americas. See ~~Note 3 - Acquisitions, Dispositions and Plant Closures~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

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Acetate Tow


	Three Months Ended June 30,				Change			% Change		Six Months Ended June 30,				Change		% Change		Three Months Ended June 30,						Change		% Change			Six Months Ended June 30,					Change		% Change
	2018		2017				2018			2017			2019	Change		% Change		2018					2019			% Change		2018						Change		% Change
	(unaudited)																	(unaudited)
	(In $ millions, except percentages)																	(In $ millions, except percentages)
Net sales	162		163		Change		(1	% Change	)	(0.6	)%	330		354		(24	)		(6.8	)%	164			Change	162		2			1.2	%		330		330		—	—	%
Net Sales Variance
Volume	1	%								(5	)%							1	%										—	%
Price	(2	)%								(3	)%							1	%										1	%
Currency	—	%								1	%							(1	)%										(1	)%
Other	—	%								—	%							—	%										—	%
Other (charges) gains, net	(1	)	(1	)	—			—	%	(1	)	(2	)	1		(50.0	)%	(84	)		(1	)		(83	)	(8,300.0	)%		(84	)		(1	)	(83	)	(8,300.0	)%
Operating profit (loss)	39		41		(2	)		(4.9	)%	85		103		(18	)	(17.5	)%	(44	)		39			(83	)	(212.8	)%		(4	)		85		(89	)	(104.7	)%
Operating margin	24.1	%	25.2	%						25.8	%	29.1	%					(26.8	)%		24.1	%							(1.2	)%		25.8	%
Dividend income - cost investments	33		28		5			17.9	%	65		57		8		14.0	%
Dividend income - equity investments																		29			33			(4	)	(12.1	)%		61			65		(4	)	(6.2	)%
Depreciation and amortization	13		10		3			30.0	%	23		20		3		15.0	%	11			13			(2	)	(15.4	)%		21			23		(2	)	(8.7	)%

Our Acetate Tow segment serves consumer-driven applications. We are a leading global producer and supplier of acetate tow and acetate flake, primarily used in filter products applications.

The pricing of products within the Acetate Tow segment is sensitive to demand and is primarily based on the value of the material we produce. Many sales in ~~these businesses~~this business are conducted under contracts with pricing for one or more years. As a result, margins may expand or contract in response to changes in raw material costs over these similar periods, and we may be unable to adjust pricing also due to other factors, such as the intense level of competition in the industry.

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018 ~~Compared to~~ ~~Three Months Ended June 30, 2017~~

Net sales ~~decreased~~remained flat for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017 primarily due to:~~

~~lower acetate tow pricing due to lower global industry utilization.~~2018.

Operating ~~profit decreased~~loss increased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~lower Net sales.~~

On June 6, 2018, we announced the consolidation of our global acetate manufacturing operations by initiating the closure of our acetate tow manufacturing unit in Ocotlán, Mexico in 2018. The acetate flake unit will remain operational and is unaffected by these actions. No significant exit and shutdown costs were incurred for

•

an unfavorable impact of $83 million to Other (charges) gains, net. During the three months ended June 30, 2019, we recorded an $83 million long-lived asset impairment loss related to the closure of our acetate flake manufacturing operations in Ocotlán, Mexico. We expect to incur additional exit and shutdown costs of approximately $20 million, primarily related to employee termination benefits and accelerated depreciation, through the first quarter of 2020. See Note 3 - Acquisitions, Dispositions and Plant Closures in the accompanying unaudited interim consolidated financial statements for further information.

Six Months Ended June 30, ~~2018. We expect~~2019 Compared to ~~incur additional exit and shutdown costs of approximately $16 million, primarily related to accelerated depreciation, through the remainder of 2018. See~~ ~~Note 3 - Acquisitions, Dispositions and Plant Closures~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

Six Months Ended June 30, 2018 ~~Compared to~~ ~~Six Months Ended June 30, 2017~~

Net sales ~~decreased~~remained flat for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017 primarily due to:~~

~~lower acetate tow volume and pricing due to lower global industry utilization.~~2018.

Operating ~~profit decreased~~loss increased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~lower Net sales;~~an unfavorable impact of $83 million to Other (charges) gains, net. During the six months ended June 30, 2019, we recorded an $83 million long-lived asset impairment loss related to the closure of our acetate flake manufacturing operations in Ocotlán, Mexico.

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In June 2017, Celanese, through various subsidiaries, entered into an agreement with affiliates of The Blackstone Group L.P. (the "Blackstone Entities") to form a joint venture which would combine substantially all of the operations of our cellulose derivatives business and the operations of the Rhodia Acetow cellulose acetate business formerly operated by Solvay S.A. and acquired by the Blackstone Entities in June 2017. The parties were subsequently unable to reach an agreement with the European Commission on acceptable conditions to allow the proposed joint venture to proceed. The demands by the European Commission eliminated the advantages at the heart of the transaction. As a result, on March 19, 2018, we and the Blackstone Entities abandoned our agreement to form the proposed joint venture. See ~~Note 3 - Acquisitions, Dispositions and Plant Closures~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

~~Industrial Specialties~~Acetyl Chain


	Three Months Ended June 30,				Change			% Change		Six Months Ended June 30,				Change		% Change		Three Months Ended June 30,						Change		% Change			Six Months Ended June 30,					Change		% Change
	2018		2017				2018			2017			2019	Change		% Change		2018					2019			% Change		2018						Change		% Change
	(unaudited)																	(unaudited)
	(In $ millions, except percentages)																	(In $ millions, except percentages)
Net sales	288		262		Change		26	% Change		9.9	%	562		507		55			10.8	%	865			Change	1,049		(184	)		(17.5	)%		1,754		2,100		(346	)	(16.5	)%
Net Sales Variance
Volume	—	%								(1	)%							(1	)%										(3	)%
Price	5	%								6	%							(14	)%										(10	)%
Currency	5	%								6	%							(3	)%										(3	)%
Other	—	%								—	%							—	%										—	%
Other (charges) gains, net	(2	)	—		(2	)		100.0	%	(2	)	—		(2	)	100.0	%	(1	)		(2	)		1		50.0	%		(1	)		(2	)	1		50.0	%
Operating profit (loss)	22		26		(4	)		(15.4	)%	45		51		(6	)	(11.8	)%	188			273			(85	)	(31.1	)%		390			526		(136	)	(25.9	)%
Operating margin	7.6	%	9.9	%						8.0	%	10.1	%					21.7	%		26.0	%							22.2	%		25.0	%
Depreciation and amortization	10		10		—			—	%	19		18		1		5.6	%	38			36			2		5.6	%		76			71		5		7.0	%

Our ~~Industrial Specialties~~Acetyl Chain segment includes ~~our~~the integrated chain of intermediate chemistry, emulsion polymers and ethylene vinyl acetate ("EVA") polymers businesses. Our intermediate chemistry business produces and supplies acetyl products, including acetic acid, vinyl acetate monomer ("VAM"), 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. 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 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. Our EVA polymers products are used in many applications, including flexible packaging films, lamination film products, hot melt adhesives, automotive parts and carpeting.

~~Pricing~~The pricing of ~~our~~ products within ~~Industrial Specialties is influenced by changes in~~ the cost of raw materials. Therefore, in general, there is a direct correlation between the cost of raw materials and our Net sales for most Industrial Specialties products. This impact to pricing typically lags changes in raw material costs over months or quarters.

~~Three Months Ended June 30, 2018~~ ~~Compared to Three Months Ended June 30, 2017~~

~~Net sales increased for the three months ended June 30, 2018 compared to the same period in 2017 primarily due to:~~

~~higher pricing in our emulsion polymers business due to higher raw material costs for vinyl acetate monomer ("VAM") in Europe and Asia; and~~

~~a favorable currency impact resulting from a strong Euro relative to the US dollar.~~

~~Operating profit decreased for the three months ended June 30, 2018 compared to the same period in 2017 primarily due to:~~

~~higher raw material costs of $12 million, primarily VAM;~~

~~largely offset by:~~

~~higher Net sales.~~

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~~Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017~~

~~Net sales increased for the six months ended June 30, 2018 compared to the same period in 2017 primarily due to:~~

~~higher pricing in our emulsion polymers business due to higher raw material costs for VAM across all regions; and~~

~~a favorable currency impact resulting from a strong Euro relative to the US dollar.~~

~~Operating profit decreased for the six months ended June 30, 2018 compared to the same period in 2017 primarily due to:~~

~~higher raw material costs of $29 million, primarily VAM;~~

~~largely offset by:~~

~~higher Net sales.~~

Acetyl ~~Intermediates~~

Three Months Ended June 30, Change % Change Six Months Ended June 30, Change % Change
2018 2017 2018 2017
(unaudited)
(In $ millions, except percentages)
Net sales 861
649
212
32.7 % 1,732
1,268
464
36.6 %
Net Sales Variance
Volume 8 % 5 %
Price 22 % 27 %
Currency 4 % 5 %
Other (1 )% — %
Other (charges) gains, net —
3
(3 ) (100.0 )% —
(50 ) 50
(100.0 )%
Operating profit (loss) 251
109
142
130.3 % 482
136
346
254.4 %
Operating margin 29.2 % 16.8 %
27.8 % 10.7 %
Equity in net earnings (loss) of affiliates 2
2
—
— % 3
3
—
— %
Depreciation and amortization 26
26
—
— % 52
52
—
— %

Our Acetyl Intermediates segment includes our intermediate chemistry business which 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 medicines. This business segment also produces organic solvents and intermediates for pharmaceutical, agricultural and chemical products.

~~Pricing of acetic acid, VAM and other acetyl products~~Chain is influenced by industry utilization rates and changes in the cost of raw materials. Therefore, in general, there is a directional correlation between these factors and our Net sales for most ~~intermediate chemistry~~Acetyl Chain products. This impact to pricing typically lags changes in raw material costs over months or quarters.

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018 ~~Compared to~~ ~~Three Months Ended June 30, 2017~~

Net sales ~~increased~~decreased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher pricing due to higher industry utilization rates, which positively impacted~~lower pricing for most of our ~~products;~~

~~higher volume for acetic acid and solvents, which represents approximately two-thirds of the increase in volume,~~products, primarily due to ~~higher~~reduced customer demand in ~~Asia;~~Asia and an overall deflationary environment for raw materials;

~~a favorable~~an unfavorable currency impact resulting from a ~~strong~~weaker Euro relative to the US ~~dollar.~~dollar; and

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lower volume, primarily for acetic acid, due to reduced customer demand in Asia, mostly offset by higher volume for VAM due to expansion in North America.

Operating profit ~~increased~~decreased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower Net sales;

partially offset by:

~~higher~~lower raw material ~~and distribution~~ costs ~~primarily~~ for acetic acid, ethylene and ~~methanol; and~~methanol, which combined represents approximately three-fourths of the decrease.

~~higher spending~~

Table of ~~$24 million, primarily due to a duty exception in the free trade agreement between Europe and Mexico recognized during the three months ended~~Contents

Six Months Ended June 30, ~~2017, which did not recur in the current year.~~

2019 Compared to Six Months Ended June 30, 2018 ~~Compared to~~ ~~Six Months Ended June 30, 2017~~

Net sales ~~increased during~~decreased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher pricing due to higher industry utilization rates, which positively impacted~~lower pricing for most of our ~~products;~~products, primarily due to reduced customer demand in Asia and an overall deflationary environment for raw materials;

~~higher~~an unfavorable currency impact resulting from a weaker Euro relative to the US dollar; and

lower volume for acetic acid, which represents all of the ~~increase~~decrease in volume, ~~primarily~~ due to ~~higher demand in China; and~~

~~a favorable currency impact resulting from a strong Euro relative to the US dollar.~~slower global economic conditions.

Operating profit ~~increased during~~decreased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher~~lower Net sales; ~~and~~

•

partially offset by:

~~higher~~lower raw material ~~and distribution~~ costs, primarily for ethylene, methanol and acetic ~~acid; and~~

~~higher spending~~acid, which combined represents approximately three-fourths of ~~$24 million, primarily due to a duty exception in~~ the ~~free trade agreement between Europe and Mexico recognized during the six months ended June 30, 2017, which did not recur in the current year.~~decrease.

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Other Activities


	Three Months Ended June 30,				Change			% Change			Six Months Ended June 30,					Change			% Change
	2018		2017				2018				2017			Three Months Ended June 30,					% Change			Change			% Change		Six Months Ended June 30,				Change			% Change
			(As Adjusted) (Note 2)		Change										(As Adjusted) (Note 2)							Change				2019		2018					2019				2018
	(unaudited)																				(unaudited)
	(In $ millions, except percentages)																				(In $ millions, except percentages)
Other (charges) gains, net	—		(2	)	2			% Change	(100.0	)%		—		(3	)	Change		3			(100.0	)%	(5	)	% Change	—		(5	)	(100.0	Change	)%		% Change	(16	)		—			(16	)	(100.0	)%
Operating profit (loss)	(68	)	(63	)	(5	)		7.9	%		(151	)	(111	)		(40	)		36.0	%	(61	)		(68	)	7		10.3	%	(127	)		(151	)		24			15.9	%
Equity in net earnings (loss) of affiliates	1		(2	)	3			(150.0	)%		4		1			3			300.0	%	2			1		1		100.0	%	5			4			1			25.0	%
Non-operating pension and other postretirement employee benefit (expense) income	26		22		4			18.2	%		52		44			8			18.2	%	17			26		(9	)	(34.6	)%	34			52			(18	)		(34.6	)%
Dividend income - equity investments																					1			1		—		—	%	1			1			—			—	%
Depreciation and amortization	4		2		2			100.0	%		6		4			2			50.0	%	4			4		—		—	%	7			6			1			16.7	%

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. Other Activities also includes the ~~interest~~components of net periodic benefit cost (interest cost, expected return on assets and net actuarial gains and ~~losses components of our net periodic benefit cost~~losses) for our defined benefit pension plans and other postretirement plans ~~which are~~ not allocated to our business segments.

Three Months Ended June 30, ~~2018~~2019 Compared to Three Months Ended June 30, ~~2017~~2018

Operating loss ~~increased~~decreased for the three months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher functional spending and~~lower incentive compensation costs of ~~$16~~$14 million;

~~largely~~partially offset by:

~~a favorable currency impact of $7 million resulting from a strong Euro relative to the US dollar; and~~

•

~~a favorable~~an unfavorable impact of $5 million to Other (charges) gains, net. A partner in our InfraServ equity affiliate investments exercised an option right to purchase additional ownership interests in the InfraServ entities from us. The purchase of these interests reduced our ownership interests in InfraServ GmbH & Co. Gendorf KG and InfraServ GmbH & Co. Knapsack KG (the "InfraServ Ownership Change"). Accordingly, duringDuring the three months ended June 30, ~~2017,~~2019 we ~~reduced the carrying value of these investments by $4~~recorded $5 million ~~which did not recur~~ in ~~the current year.~~employee termination benefits, primarily related to business optimization projects. See Note 114 - ~~Description of the Company and Basis of Presentation~~Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information.

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Non-operating pension and other postretirement employee benefit income decreased for the three months ended June 30, 2019 compared to the same period in 2018, primarily due to:

lower expected return on plan assets.

Six Months Ended June 30, ~~2018~~2019 Compared to Six Months Ended June 30, ~~2017~~2018

Operating loss ~~increased~~decreased for the six months ended June 30, ~~2018~~2019 compared to the same period in ~~2017~~2018, primarily due to:

~~higher functional~~lower incentive compensation costs and project spending of ~~$24~~$30 million; and

a favorable currency impact of $5 million ~~primarily related~~resulting from a weaker Euro relative to ~~ongoing merger, acquisition and integration related costs; and~~

~~higher incentive compensation cost of $22 million.~~the US dollar;

partially offset by:

•

an unfavorable impact of $16 million to Other (charges) gains, net. During the six months ended June 30, 2019 we recorded an $11 million loss related to a settlement by our captive insurer with a former third-party customer. In addition, during the six months ended June 30, 2019 we recorded $5 million in employee termination benefits, primarily related to business optimization projects. See Note 14 - Other (Charges) Gains, Net in the accompanying unaudited interim consolidated financial statements for further information.

~~a favorable impact~~Non-operating pension and other postretirement employee benefit income decreased for the six months ended June 30, 2019 compared to ~~Other (charges) gains, net~~the same period in 2018, primarily due ~~to the InfraServ Ownership Change.~~to:

lower expected return on plan assets.

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Liquidity and Capital Resources

Our primary source of liquidity is cash generated from operations, available cash and cash equivalents and dividends from our portfolio of strategic investments. In addition, as of June 30, ~~2018,~~2019, we have ~~$875 million~~$1.1 billion available for borrowing under our senior unsecured revolving credit facility and ~~$14~~$5 million available under our accounts receivable securitization facility to assist, if required, in meeting our working capital needs and other contractual obligations.

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.

Total cash outflows for capital expenditures are expected to be in the range of ~~$325~~$350 million to ~~$350~~$400 million in ~~2018~~2019, primarily due to additional investments in growth opportunities in our Engineered Materials and Acetyl ~~Intermediates~~Chain segments.

On a stand-alone basis, Celanese and its immediate 100% owned subsidiary, Celanese US, have no material assets other than the stock of their subsidiaries and 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 US in order to meet their obligations, including their obligations under senior credit facilities and senior notes and to pay dividends on our ~~Series A common~~Common stock, par value $0.0001 per share ("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.

Cash Flows

Cash and cash equivalents increased ~~$132~~$52 million to ~~$708~~$491 million as of June 30, ~~2018~~2019 compared to December 31, ~~2017.~~2018. As of June 30, ~~2018, $572~~2019, $394 million of the ~~$708~~$491 million of cash and cash equivalents was held by our foreign subsidiaries. ~~Under the TCJA, we have incurred a charge associated with the repatriation of previously unremitted foreign earnings, including foreign held cash.~~ These funds are largely accessible, if needed in the US to fund operations. Under the TCJA, we have incurred a charge associated with the deemed repatriation of previously unremitted foreign earnings, including foreign held cash. See Note 15 - Income Taxes in the accompanying unaudited interim consolidated financial statements for further information.

Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities increased ~~$238~~$3 million to ~~$728~~$731 million for the six months ended June 30, ~~2018~~2019 compared to ~~$490~~$728 million for the same period in ~~2017.~~2018. Net cash provided by operating activities for the six months ended June 30, ~~2018~~2019 increased, primarily due to:

~~an increase in net earnings;~~

~~partially offset by:~~

~~unfavorable~~favorable trade working capital of ~~$67~~$196 million, primarily due to ~~an increase~~timing of trade receivable collections;

largely offset by:

a decrease in ~~trade receivables as a result of an increase in Net sales in our Acetyl Intermediates segment.~~net earnings.

Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities decreased ~~$58~~$88 million to ~~$331~~$243 million for the six months ended June 30, ~~2018~~2019 compared to ~~$389~~$331 million for the same period in ~~2017,~~2018, primarily due to:

~~a net cash outflow of $268 million related to the acquisition of Nilit in May 2017, which did not recur this year;~~

~~partially offset by:~~

a net cash outflow of $144 million related to the acquisition of Omni Plastics, L.L.C. and its subsidiaries in February ~~2018;~~2018, which did not recur this year; and

~~an increase of $49 million in capital expenditures related to growth opportunities in our Engineered Materials and Acetyl Intermediates segments.~~

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higher capital expenditures during the six months ended June 30, 2018, primarily due to plant expansions within our Acetyl Chain segment in the prior year;

partially offset by:

a net cash outflow of $91 million, primarily related to the acquisition of Next Polymers Ltd. in January 2019.

Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities ~~of $256~~increased $181 million to $437 million for the six months ended June 30, ~~2018 was flat as~~2019 compared to ~~June 30, 2017~~$256 million for the same period in 2018, primarily due to:

~~a decrease in net borrowings on short-term debt~~an increase of $214 million, primarily as a result of higher borrowings under our revolving credit facility and accounts receivable securitization facility during the six months ended June 30, 2017 in connection with the acquisition of Nilit and related to the timing of share repurchases of our Common Stock;

~~largely offset by:~~

~~a decrease of $200~~$388 million in share repurchases of our Common Stock during the six months ended June 30, ~~2018.~~2019;

partially offset by:

an increase in net proceeds from long-term debt of $194 million, primarily due to the issuance of $500 million in principal amount of the 3.500% senior unsecured notes due May 8, 2024 (the "3.500% Notes"), partially offset by the redemption of the 3.250% senior unsecured notes (the "3.250% Notes") during the six months ended June 30, 2019, as discussed below; and

an increase in net borrowings on short-term debt of $56 million, primarily as a result of higher borrowings under our revolving credit facility during the six months ended June 30, 2019 related to the timing of share repurchases of our Common Stock.

Debt and Other Obligations

On May 8, 2019, Celanese US completed an offering of $500 million in principal amount of the 3.500% Notes in a public offering registered under the Securities Act. The 3.500% Notes were issued at a discount to par at a price of 99.895%, which is being amortized to Interest expense in the unaudited interim consolidated statement of operations over the term of the 3.500% Notes. Net proceeds from the sale of the 3.500% Notes were used to redeem in full the 3.250% Notes, to repay $156 million of outstanding borrowings under the senior unsecured revolving credit facility and for general corporate purposes. In connection with the issuance of the 3.500% Notes, we entered into a cross-currency swap to effectively convert our fixed-rate US dollar denominated debt under the 3.500% Notes, including annual interest payments and the payment of principal at maturity, to fixed-rate Euro denominated debt.

On January 7, 2019, Celanese, Celanese US and certain subsidiary borrowers entered into a new senior credit agreement (the "Credit Agreement") consisting of a $1.25 billion senior unsecured revolving credit facility (with a letter of credit sublimit), maturing in 2024. The Credit Agreement is guaranteed by Celanese, Celanese US and substantially all of its domestic subsidiaries.

There have been no material changes to our debt or other obligations described in our ~~2017~~2018 Form 10-K other than those disclosed above and in Note 10 - Debt in the accompanying unaudited interim consolidated financial statements.

Other Financing Arrangements

~~During~~Our US accounts receivable securitization facility was amended on July 8, 2019 to extend the ~~three months ended~~maturity date to July 6, 2020.

In June ~~30,~~ 2018, we entered into a factoring agreement with a global financial institution to sell certain accounts receivable on a non-recourse basis. 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. We have 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. We de-recognized ~~$40~~$134 million and $117 million of accounts receivable as of June 30, 2019 and December 31, 2018,. respectively.

Share Capital

We declared a quarterly cash dividend of ~~$0.54~~$0.62 per share on our Common Stock on July ~~16, 2018,~~15, 2019, amounting to ~~$73~~$77 million. The cash dividend will be paid on August ~~6, 2018~~5, 2019 to holders of record as of July ~~27, 2018.~~26, 2019.

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There have been no material changes to our share capital described in our ~~2017~~2018 Form 10-K other than those disclosed ~~above and~~ in Note 13 - Stockholders' Equity in the accompanying unaudited interim consolidated financial statements.

Contractual Obligations

Except as otherwise described in this report, there have been no material revisions outside the ordinary course of business to our contractual obligations as described in our ~~2017~~2018 Form 10-K.

Off-Balance Sheet Arrangements

We have not entered into any material off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our unaudited interim consolidated financial statements are based on the selection and application of significant accounting policies. The preparation of unaudited interim consolidated financial statements in conformity with US 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 unaudited interim consolidated financial statements and the reported amounts of ~~Net~~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 describe our significant accounting policies in Note 2 - Summary of Accounting Policies, of the Notes to the Consolidated Financial Statements included in our ~~2017~~2018 Form 10-K. We discuss our critical accounting policies and estimates in MD&A in our ~~2017~~2018 Form 10-K.

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Recent Accounting Pronouncements

See Note 2 - Recent Accounting Pronouncements in the accompanying unaudited interim consolidated financial statements included in this Quarterly Report for information regarding recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk for the Company has not changed materially from the foreign exchange, interest rate and commodity risks disclosed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk in our ~~2017~~2018 Form 10-K. See also Note 1617 - Derivative Financial Instruments in the accompanying unaudited interim consolidated financial statements for further discussion of our market risk management and the related impact on the Company's financial position and results of operations.

Item 4. Controls and Procedures

Disclosure 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 report. Based on that evaluation, as of June 30, ~~2018,~~2019, 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

~~On February 1, 2018, we acquired 100% of the ownership interests of Omni Plastics, L.L.C. and its subsidiaries. See~~ ~~Note 3 - Acquisitions, Dispositions and Plant Closures~~ ~~in the accompanying unaudited interim consolidated financial statements for further information.~~

During the period covered by this report, 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.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in ~~a number of~~ 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 stockholders, 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 12 - Environmental and Note 1819 - Commitments and Contingencies in the accompanying unaudited interim consolidated financial statements for a discussion of material environmental matters and material commitments and contingencies related to legal and regulatory proceedings. There have been no significant developments in the "Legal Proceedings" described in our ~~2017~~2018 Form 10-K other than those disclosed in Note 12 - Environmental and Note 1819 - Commitments and Contingencies in the accompanying unaudited interim consolidated financial statements. See Part I - Item 1A. Risk Factors of our ~~2017~~2018 Form 10-K for certain risk factors relating to these legal proceedings.

Item 1A. Risk Factors

There have been no material changes to the risk factors under Part I, Item 1A of our ~~2017~~2018 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases of our Common Stock during the three months ended June 30, ~~2018~~2019 are as follows:

Period
Total Number
of Shares
Purchased⁽¹⁾

Average
Price Paid
per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Program

Approximate Dollar
Value of Shares
Remaining that may be
Purchased Under the Program⁽²⁾
(unaudited)
April 1-30, 2018 749
$ 110.98
—
$ 1,531,000,000
May 1-31, 2018 614,725
$ 110.78
613,845
$ 1,463,000,000
June 1-30, 2018 278,757
$ 116.53
274,538
$ 1,431,000,000
Total 894,231
888,383



Period	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares Remaining that may be Purchased Under the Program⁽²⁾
	(unaudited)
April 1-30, 2019	104,724	$	108.14	104,724	$	2,002,000,000
May 1-31, 2019	2,529,150	$	102.34	2,529,150	$	1,743,000,000
June 1-30, 2019	283,990	$	105.12	283,990	$	1,713,000,000
Total	2,917,864			2,917,864

______________________________


⁽¹⁾	~~Includes 749, 880 and 4,219 shares for April,~~ May ~~and June 2018, respectively, related to~~include shares withheld from employees to cover their withholding requirements for personal income taxes related to the vesting of restricted ~~stock units.~~stock.


⁽²⁾	~~Our~~As of June 30, 2019, our Board of Directors has authorized the repurchase of ~~$3.9~~$5.4 billion of our Common Stock since February 2008. On April 18, 2019, our Board of Directors approved a $1.5 billion increase in our Common Stock repurchase authorization.

See Note 13 - Stockholders' Equity in the accompanying unaudited interim consolidated financial statements for further information.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits⁽¹⁾



Exhibit Number
Exhibit Number		Description

3.1		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).

3.1(a)		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).

~~3.2~~3.1(b)		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).

3.1(c)		Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of Celanese Corporation dated 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).

3.2(a)		Fifth Amended and Restated By-laws, amended effective July 16, 2018 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 18, 2018).

~~10.1‡~~3.2(b)		~~Celanese Corporation 2018 Global Incentive Plan, dated as of April 23, 2018~~Sixth Amended and Restated By-laws, amended effective July 15, 2019 (incorporated by reference to Exhibit ~~10.1~~3.1 to the Current Report on Form 8-K filed with the SEC on July 18, 2019).

4.1		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).

10.1*‡		Form of 2019 Time-Based Restricted Stock Unit Award Agreement (for non-employee directors).

10.2*‡		Offer Letter, dated April ~~20, 2018).~~5, 2019, between Celanese Corporation and Lori Ryerkerk.

31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance ~~Document.~~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*		XBRL Taxonomy Extension Schema Document.

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.


*	Filed herewith.


†	~~The schedules to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a copy of any schedule to the SEC upon request.~~


‡	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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SIGNATURES

Pursuant to the requirements 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:	/s/ ~~MARK C. ROHR~~LORI J. RYERKERK
		~~Mark C. Rohr~~
		~~Chairman of the Board of Directors and~~Lori J. Ryerkerk
		Chief Executive Officer and President

		Date:	July ~~20, 2018~~23, 2019



By:	/s/ SCOTT A. RICHARDSON
	Scott A. Richardson
	Senior Vice President and
	Chief Financial Officer

	Date:	July ~~20, 2018~~23, 2019

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	Three Months Ended June 30, 2017
	As previously reported		Adoption of ASU 2017-07		As Adjusted
	(In $ millions)
Cost of sales	(1,143	)	(2	)	(1,145	)
Selling, general and administrative expenses	(96	)	(21	)	(117	)
Other (charges) gains, net	(3	)	1		(2	)
Operating profit (loss)	240		(22	)	218
Non-operating pension and other postretirement employee benefit (expense) income	—		22		22



	Foreign Currency Translation		Gain (Loss) on Cash Flow Hedges (Note 16)		Pension and Postretirement Benefits (Note 11)		Accumulated Other Comprehensive Income (Loss), Net
	(In $ millions)
As of December 31, 2017	(176	)	2		(3	)	(177	)
Other comprehensive income (loss) before reclassifications	(27	)	5		1		(21	)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(1	)	—		(1	)
Income tax (provision) benefit	10		1		—		11
As of June 30, 2018	(193	)	7		(2	)	(188	)