http://www.morningstar.com/earnings/54524979-celanese-corp-ce-q2-2013.aspx

Celanese Corp CE
Q2 2013 Earnings Call Transcript

Transcript Call Date 07/19/2013

Operator: Good day, ladies and gentlemen, and welcome to the Celanese Corporation Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instruction will be given at that time. As a reminder, this conference is being recorded.

I would like to introduce our host for today, Mr. Jon Puckett. Sir, please go ahead.

Jon Puckett - VP of IR: Thank you, Karen. Welcome to the Celanese Corporation second quarter 2013 conference call. My name is Jon Puckett, Vice President of Investor Relations. With me today are Mark Rohr, Chairman and Chief Executive Officer and Steven Sterin, Senior Vice President and Chief Financial Officer.

The Celanese Corporation second quarter 2013 earnings release was distributed via Business Wire yesterday after market close. The slides for the call and our prepared comments for the quarter were also posted on our website www.celanese.com in the Investor Relations section. All of these items have been submitted to the SEC in a current report on Form 8-K.

As a reminder, some of the matters discussed today and included in our presentations may include forward-looking statements concerning, for example, Celanese Corporation's future objectives and results. Please note the cautionary language contained in the posted slides.

Also, some of the matters discussed and presented include references to non-GAAP financial measures. Explanations of these measures and reconciliations to the comparable GAAP measures are included on our website www.celanese.com in the Investor Relations sections as applicable.

This morning we'll begin with introductory comments from Mark Rohr, and then field your questions.

I'd now like to turn the call over to Mark.

Mark C. Rohr - Chairman and CEO: Thanks Jon, and welcome everyone. Since our prepared remarks were released last night, I'll keep my comments brief and open the line for your questions. For the quarter, we reported adjusted earnings of $1.12 per share, which is consistent with expectations of muted seasonality in our end markets and relatively consistent performance.

Coming into the quarter we didn't anticipate favorable tailwinds from the global economy which is why we focused on Celanese specific initiatives to drive growth and I believe our results demonstrate the success we're having with these initiatives. Second quarter segment income margin expanded sequentially to 22.3% for Advanced Engineered Materials, Industrial Specialties and Consumer Specialties. We are very pleased with these results which showcase our success in delivering value to through innovation and marketing.

Segment income margin in Acetyl Intermediates was lower in Q2 than Q1 due to Celanese and customer turnarounds challenges as well as raw material supply issues at one of plants. These items alone reduced Acetyl Intermediates earnings by about $15 million in the second quarter. We generated very healthy operating cash flow of $229 million and adjusted free cash flow of $154 million positioned us well to pursue our growth initiatives and our balanced capital deployment strategy.

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