Celanese Corp (CE) FY 2021 MD&A

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

In this Annual Report on Form 10-K ("Annual Report"), the term "Celanese" refers to Celanese Corporation, a Delaware corporation, and not its subsidiaries. The terms the "Company," "we," "our" and "us," refer to Celanese and its subsidiaries on a consolidated basis. The term "Celanese U.S." refers to the Company's subsidiary, Celanese US Holdings LLC, a Delaware limited liability company, and not its subsidiaries.

The following discussion should be read in conjunction with the accompanying consolidated financial statements and notes to the consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Investors are cautioned that the forward-looking statements contained in this section and other parts of this Annual 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.

Forward-Looking Statements

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") and other parts of this Annual 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. See "Special Note Regarding Forward-Looking Statements" at the beginning of this Annual Report for further discussion.

COVID-19 Update

The COVID-19 pandemic and the various responses thereto, including government-imposed quarantines, stay-at-home restrictions, travel restrictions and other public health and safety measures, continue to evolve. Our employees' health and well-being continue to be of vital importance and we continue to monitor the pandemic in the areas where we have employees and operations. We implemented government recommended protocols and best practices related to social distancing and hygiene. We implemented careful return-to-office efforts in accordance with government regulations and recommended protocols.

After declining during 2020, consumer demand for most applications has increased and rebounded to pre-COVID-19 levels in many regions of the world, which has positively impacted our results of operations. Where we temporarily reduced run rates in prior quarters, our plants are now operating at more normalized levels, although, like many companies, we have experienced a tightening labor market, with increased competitiveness and higher costs for the pool of talent critical for specialty manufacturing and other operations.

Due to potential impacts of COVID-19 resurgences and variants, some uncertainty remains in the pandemic's future duration and scope. The extent to which resurgences or other variants of COVID-19 may adversely impact demand for our products, availability and price of raw materials and the labor supply, and therefore our business, financial condition and results of operations, will depend on numerous factors, including the effectiveness of vaccines, the extent and locations of any resurgences of the virus, health and safety measures and the continuing impact of the pandemic on supply chains (including the availability and cost of transportation and materials). On September 9, 2021, the President directed the Occupational Safety and Health Administration to promulgate rules requiring large employers to mandate employee vaccinations. These rules, referred to as the emergency temporary standard ("ETS") were subject to a number of legal challenges, including applications for emergency injunctions. These actions were consolidated before the United States Supreme Court, which issued a decision in January 2022 that stayed implementation of the ETS. In the United States, the ETS or similar regulations could be re-approved or re-issued in a similar or different form, and around the world we anticipate that national, state and local governments will continue to pursue regulatory or legislative action designed to curb the spread of COVID-19. Such efforts could impose additional costs on our operations. These factors are uncertain, rapidly changing and cannot be predicted.

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The extent to which COVID-19 will adversely impact our business, financial condition and results of operations will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted. For further information regarding the impact COVID-19 could have on our business, financial condition and results of operations, see Item 1A. Risk Factors. For further discussion of our liquidity condition, see Liquidity and Capital Resources in this Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Risk Factors

Item 1A. Risk Factors of this Annual Report also contains a description of certain risk factors that you should consider which could significantly affect our financial results. In addition, the following factors, among others, could cause our actual results to differ materially from those results, performance or achievements that may be expressed or implied by such forward-looking statements:

•changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate;

•volatility or changes in the price and availability of raw materials and energy, 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 extent to which the COVID-19 pandemic continues to adversely impact the economic environment, market demand and our operations, as well as the pace of any economic recovery;

•the length and depth of product and industry business cycles particularly in the automotive, electrical, textiles, electronics and construction industries;

•the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases;

•the ability to maintain plant utilization rates and to implement planned capacity additions, expansions and maintenance;

•the ability to reduce or maintain current levels of production costs and to improve productivity by implementing technological improvements to existing plants;

•increased price competition and the introduction of competing products by other companies;

•the ability to identify desirable potential acquisition targets and to complete acquisition or investment transactions, including obtaining regulatory approvals, consistent with our strategy;

•market acceptance of our technology;

•compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, transportation or logistics disruptions, cybersecurity incidents, terrorism or political unrest, public health crises (including, but not limited to, the COVID-19 outbreak), or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the occurrence of acts of war or terrorist incidents or as a result of weather, natural disasters, or other crises;

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

•changes in applicable tariffs, duties and trade agreements, tax rates or legislation throughout the world including, but not limited to, adjustments, changes in estimates or interpretations or the resolution of tax examinations or audits that may impact recorded or future tax impacts and potential regulatory and legislative tax developments in other jurisdictions;

•changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property;

•potential liability for remedial actions and increased costs under existing or future environmental, health and safety regulations, including those relating to climate change;

•potential liability resulting from pending or future claims or litigation, including investigations or enforcement actions, or from changes in the laws, regulations or policies of governments or other governmental activities, in the countries in which we operate;

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•changes in currency exchange rates and interest rates; and

•various other factors, both referenced and not referenced in this Annual Report.

Many of these factors are macroeconomic in nature and are, therefore, beyond our control. COVID-19 and responses to the pandemic by governments and businesses, have significantly increased financial and economic volatility and uncertainty, exacerbating the risks and potential impact of these factors. Should one or more of these risks or uncertainties materialize, affect us in ways or to an extent that we currently do not expect or consider to be significant, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this Annual 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.

Results of Operations

Financial Highlights

_____________________________

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

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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:

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Consolidated Results

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net sales increased $2.9 billion, or 51%, for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher pricing in most of our segments, primarily driven by our Acetyl Chain segment, due to increased customer demand and supply constraints across all regions;

•higher volume in our Engineered Materials and Acetyl Chain segments, primarily due to increased demand across most regions due to recovery from the COVID-19 pandemic; and

•a favorable currency impact resulting from a stronger Euro relative to the U.S. dollar.

Selling, general and administrative expenses increased $151 million, or 31%, for the year ended December 31, 2021 compared to the same period in 2020, primarily due to:

•an increase in functional spending and incentive compensation costs of $109 million in Other Activities.

Operating profit increased $1.3 billion, or 193%, for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher Net sales across most of our segments;

partially offset by:

•higher raw material and energy costs across all of our segments; and

•higher spending across most of our segments, primarily as a result of increased plant operating and maintenance expenses.

Non-operating pension and other postretirement employee benefit income increased $89 million for the year ended December 31, 2021 compared to the same period in 2020 due to a decrease in recognized actuarial loss of $55 million as a result of lower than expected asset returns, partially offset by an increase in the weighted average discount rate used to determine benefit obligations from 2.05% to 2.47%, and lower interest costs of $31 million. See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.

Gain (loss) on sale of investments in affiliates decreased $1.4 billion for the year ended December 31, 2021 due to the sale of our 45% Polyplastics joint venture equity interest during the year ended December 31, 2020, which did not recur in the current year. See Note 7 - Investments in Affiliates in the accompanying consolidated financial statements for further information.

Our effective income tax rate for the year ended December 31, 2021 was 15% compared to 11% for the year ended 2020. The higher effective income tax rate for the year ended December 31, 2021 compared to the same period in 2020 was primarily due

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to non-recurring tax benefits from certain divestitures and reorganization transactions which did not recur in the current year. See Note 16 - Income Taxes in the accompanying consolidated financial statements for further information.

Discussion of our financial condition and results of operations for the year ended December 31, 2020 compared to the year ended December 31, 2019 and for the year ended December 31, 2019 compared to the year ended December 31, 2018, can be found in Part II - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Reports for the years ended December 31, 2020 and December 31, 2019, respectively.

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Business Segments

Engineered Materials

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net sales increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher volume for most of our products driven by increased demand across all regions due to recovery from the COVID-19 pandemic;

•higher pricing for most of our products, primarily due to higher raw material costs and product mix; and

•a favorable currency impact resulting from a stronger Euro relative to the U.S. dollar.

Operating profit increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher Net sales;

•a favorable impact of $42 million to Other (charges) gains, net. During the year ended December 31, 2020, we recorded a $26 million long-lived asset impairment loss related to certain fixed assets used in compounding operations at our facilities in Kaiserslautern, Germany; Wehr, Germany and Ferrara Marconi, Italy, which did not recur in the current year, see Note 15 - Other (Charges) Gains, Net in the accompanying consolidated financial statements for further information; and

•lower plant turnaround costs of $41 million, primarily related to our Bishop and Frankfurt plants in 2020;

partially offset by:

•higher raw material costs for most of our products and increased sourcing costs as a result of higher logistical costs and global shipping constraints;

•higher energy costs of $110 million, primarily for steam; and

•higher spending of $63 million, primarily as a result of plant operating and administrative expenses.

Gain (loss) on sale of investments in affiliates decreased $1.4 billion for the year ended December 31, 2021 due to the sale of our 45% Polyplastics joint venture equity interest during the year ended December 31, 2020, which did not recur in the current year. See Note 7 - Investments in Affiliates in the accompanying consolidated financial statements for further information.

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Acetate Tow

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net sales were consistent for the year ended December 31, 2021 compared to the same period in 2020.

Operating profit decreased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher energy costs of $29 million, primarily related to higher natural gas pricing; and

•higher raw material costs of $18 million, primarily for acetic acid.

Dividend income from equity investments increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher earnings from our Nantong, Zhuhai and Kunming Cellulose Fibers joint ventures related to higher volumes and a favorable currency impact.

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Acetyl Chain

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net sales increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher pricing for all of our products, primarily due to increased customer demand and supply constraints across all regions;

•higher volume for most of our products driven by increased demand across most regions due to recovery from the COVID-19 pandemic; and

•a favorable currency impact resulting from a stronger Euro relative to the U.S. dollar.

Operating profit increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher Net sales;

partially offset by:

•higher raw material costs, primarily for ethylene, methanol and carbon monoxide, as well as higher sourcing and distribution costs due to stronger demand and tighter market conditions;

•higher spending of $77 million, primarily as a result of increased plant operating and maintenance expenses, fixed overhead, freeze-related repairs and restart costs resulting from Winter Storm Uri; and

•higher energy costs of $67 million, primarily due to supply disruptions caused by Winter Storm Uri, price increases for, and increased consumption of, natural gas due to increased volumes.

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Other Activities

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Operating loss increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•higher functional spending and incentive compensation costs of $109 million;

partially offset by:

•a gain on the sale of our Spondon site of $14 million.

Non-operating pension and other postretirement employee benefit income increased for the year ended December 31, 2021 compared to the same period in 2020 primarily due to:

•a decrease in recognized actuarial loss of $55 million as a result of lower than expected asset returns, partially offset by an increase in the weighted average discount rate used to determine benefit obligations from 2.05% to 2.47%, and lower interest costs of $31 million. See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.

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Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operations, available cash and cash equivalents, dividends from our portfolio of strategic investments and available borrowings under our senior unsecured revolving credit facility. As of December 31, 2021, we have $1.1 billion available for borrowing under our senior unsecured revolving credit facility, if required, in meeting our working capital needs and other contractual obligations. In addition, we held cash and cash equivalents of $536 million as of December 31, 2021. We are actively managing our business to maintain cash flow, and we believe that liquidity from the above-referenced sources will be sufficient to meet our operational and capital investment needs and financial obligations for the foreseeable future.

On December 1, 2021, we acquired the Santoprene™ thermoplastic vulcanizates ("TPV") elastomers business of Exxon Mobil Corporation ("Santoprene") for a purchase price of $1.15 billion in an all-cash transaction. See Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information.

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.

Capital expenditures were $467 million for the year ended December 31, 2021. We continue to prioritize those projects expected to drive productivity in the near-term and expect capital expenditures to be approximately $600 million in 2022, primarily due to the following investments in growth opportunities and productivity improvements. In Engineered Materials, we announced plans to expand the compounding capacity at our facilities in China, ultra-high molecular weight polyethylene ("UHMW-PE") production capacity in Bishop, Texas and Oberhausen, Germany to support the growing global electric vehicle battery market and an expansion of our Florence, Kentucky Technology and Innovation center through the addition of a pharmaceutical drug delivery lab to support programs and products for long-acting, controlled release drug delivery. In the Acetyl Chain, we announced plans to expand the capacity of our vinyl acetate ethylene ("VAE") and emulsions plants in Nanjing, China and Frankfurt, Germany, expand the capacity of our vinyl acetate monomer ("VAM") plant in Bay City, Texas, expand the sustainable production of methanol at our Fairway joint venture in Clear Lake, Texas using captured carbon dioxide as feedstock. Lastly, our previously announced acetic acid expansion in Clear Lake, Texas is still in construction and on schedule. We continue to see the incremental capacity from investments we made in recent years strengthen our manufacturing network reliability to best serve our customers.

We remain fully committed to our cash dividend. During the year ended December 31, 2021, we completed $1.0 billion of share repurchases.

On a stand-alone basis, Celanese and its immediate 100% owned subsidiary, Celanese U.S., have 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 U.S. in order to meet their obligations, including their obligations under senior credit facilities and senior notes, and to pay dividends on our 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. While it is possible that future tightening of these restrictions or application of new similar restrictions could impact us, these limitations do not currently restrict our operations.

We remain in compliance with the financial covenants under our senior unsecured revolving credit facility and expect to remain in compliance based on our current expectation of future results of operations. If our actual future results of operations differ materially from these expectations, or if we otherwise experience increased indebtedness or substantially lower EBITDA, we may be required to seek an amendment or waiver of such covenants which may increase our borrowing costs under those debt instruments.

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Cash Flows

Cash and cash equivalents decreased $419 million to $536 million as of December 31, 2021 compared to December 31, 2020. As of December 31, 2021, $422 million of the $536 million of cash and cash equivalents was held by our foreign subsidiaries. Under the TCJA, we have incurred a prior year charge associated with the deemed repatriation of previously unremitted foreign earnings, including foreign held cash. These funds are largely accessible without additional material tax consequences, if needed in the U.S., to fund operations. See Note 16 - Income Taxes in the accompanying consolidated financial statements for further information.

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

•Net Cash Provided by (Used in) Operating Activities

Net cash provided by operating activities increased $414 million to $1.8 billion for the year ended December 31, 2021 compared to $1.3 billion for the same period in 2020, primarily due to:

•the gain on the sale of our 45% Polyplastics joint venture equity interest during the year ended December 31, 2020, which did not recur in the current year, net of a decrease in Net earnings;

partially offset by:

•unfavorable trade working capital of $669 million, primarily due to an increase in trade receivables and inventory, partially offset by an increase in trade payables. Trade receivables increased primarily as a result of the increase in Net sales and inventory increased primarily as a result of higher costs for raw materials during the year ended December 31, 2021. Payables increased as a result of higher costs for raw materials and the timing of settlement of trade payables;

•an increase in VAT taxes receivable, primarily due to timing of refunds and COVID-19 relief measures during the year ended December 31, 2020, which did not recur in the current year; and

•a payment for the European Commission settlement of $100 million, see Note 20 - Commitments and Contingencies in the accompanying consolidated financial statements for further information.

•Net Cash Provided by (Used in) Investing Activities

Net cash used in investing activities increased $1.7 billion to $1.1 billion for the year ended December 31, 2021 compared to net cash provided by investing activities of $592 million for the same period in 2020, primarily due to:

•a net cash inflow of $1.6 billion related to the sale of our 45% Polyplastics joint venture equity interest during the year ended December 31, 2020, which did not recur in the current year. See Note 7 - Investments in Affiliates in the accompanying consolidated financial statements for further information;

•a net cash outflow of $1.0 billion related to the acquisition of the Santoprene™ thermoplastic vulcanizates elastomers business of Exxon Mobil Corporation in December 2021 (see Note 4 - Acquisitions, Dispositions and Plant Closures in the accompanying consolidated financial statements for further information), partially offset by the acquisition of Nouryon's redispersible polymer powders business offered under the Elotex® brand in April 2020; and

•an increase of $103 million in capital expenditures related to growth opportunities in our Acetyl Chain and Engineered Materials segments;

partially offset by:

•an increase in net proceeds of $1.0 billion related to the purchase and sale of marketable securities during the years ended December 31, 2020 and December 31, 2021.

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•Net Cash Provided by (Used in) Financing Activities

Net cash used in financing activities decreased $429 million to $1.0 billion for the year ended December 31, 2021 compared to $1.5 billion for the same period in 2020, primarily due to:

•a decrease in net repayments of short-term debt of $642 million, primarily as a result of repayments of borrowings under our revolving credit facility and accounts receivable securitization facility during the year ended December 31, 2020; and

•an increase in net proceeds from long-term debt of $234 million, primarily due to the issuance of $400 million in principal amount of 1.400% senior unsecured notes due August 5, 2026 (the "1.400% Notes") and the issuance of €500 million in principal amount of 0.625% senior unsecured notes due September 10, 2028 (the "0.625% Notes"), partially offset by the maturity and repayment in full of the 5.875% senior unsecured notes (the "5.875% Notes") and tender offer for 1.125% senior unsecured notes due September 26, 2023 (the "1.125% Notes") during the year ended December 31, 2021;

partially offset by:

•an increase in share repurchases of our Common Stock of $350 million during the year ended December 31, 2021; and

•a settlement of a forward-starting interest rate swap on August 2, 2021 resulting in a payment to the counterparty of $72 million.

In addition, exchange rates had an unfavorable impact of $15 million on cash and cash equivalents and a favorable impact of $28 million on cash and cash equivalents for the years ended December 31, 2021 and 2020, respectively.

Debt and Other Obligations

•Senior Credit Facilities

In January 2019, Celanese, Celanese U.S. 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 U.S. and substantially all of its domestic subsidiaries ("the Subsidiary Guarantors"). We borrowed $850 million and repaid $650 million under our senior unsecured revolving credit facility during the year ended December 31, 2021.

•Senior Notes

We have outstanding senior unsecured notes, issued in public offerings registered under the Securities Act of 1933 ("Securities Act"), as amended, as follows (collectively, the "Senior Notes"):

The Senior Notes were issued by Celanese U.S. and are guaranteed on a senior unsecured basis by Celanese and the Subsidiary Guarantors. Celanese U.S. 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 "make-whole" premium as specified in the applicable indenture, plus accrued and unpaid interest, if any, to the redemption date.

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On August 5, 2021, Celanese U.S. completed an offering of $400 million in principal amount of 1.400% Notes in a public offering registered under the Securities Act. Net proceeds from the sale of the 1.400% Notes were used to repay $396 million of outstanding borrowings under the senior unsecured revolving credit facility and for general corporate purposes.

On September 10, 2021, Celanese U.S. completed an offering of €500 million in principal amount of 0.625% Notes due September 10, 2028 in a public offering registered under the Securities Act.

On September 13, 2021, Celanese U.S. completed a cash tender offer for €300 million in principal amount of 1.125% Notes at a purchase price of €1,027.35 per €1,000 of principal amount plus accrued interest, for a total principal and premium payment of $363 million plus accrued interest of $4 million. A portion of the proceeds from the issuance of the 0.625% Notes were used to fund the tender offer for €300 million of the 1.125% Notes. As a result of the tender offer, the carrying value of the 1.125% Notes was reduced by $353 million.

•Accounts Receivable Securitization Facility

On June 18, 2021, we entered into an amendment to the amended and restated receivables purchase agreement under our U.S. accounts receivable purchasing facility among certain of our subsidiaries, our wholly-owned, "bankruptcy remote" special purpose subsidiary ("SPE") and certain global financial institutions ("Purchasers"). We de-recognized $1.1 billion and $595 million of accounts receivable under this agreement for the years ended December 31, 2021 and 2020, respectively, and collected $1.1 billion and $476 million of accounts receivable sold under this agreement during the same periods. Unsold U.S. accounts receivable of $115 million were pledged by the SPE as collateral to the Purchasers as of December 31, 2021.

•Factoring and Discounting Agreements

We have factoring agreements in Europe and Singapore with financial institutions. We de-recognized $230 million and $233 million of accounts receivable under these factoring agreements for the years ended December 31, 2021 and 2020, respectively, and collected $185 million and $237 million of accounts receivable sold under these factoring agreements during the same periods.

In March 2021, we entered into a letter of credit discounting agreement in Singapore with a financial institution. We de-recognized $70 million of accounts receivable under this agreement for the year ended December 31, 2021.

Our 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. We are in compliance with all of the covenants related to our debt agreements as of December 31, 2021.

See Note 11 - Debt in the accompanying consolidated financial statements for further information.

Guarantor Financial Information

The Senior Notes were issued by Celanese U.S. ("Issuer") and are guaranteed by Celanese Corporation ("Parent Guarantor") and the Subsidiary Guarantors (collectively the "Obligor Group"). See Note 11 - Debt in the accompanying consolidated financial statements for further information. The Issuer and Subsidiary Guarantors are 100% owned subsidiaries of the Parent Guarantor. The Parent Guarantor and Subsidiary Guarantors represent substantially all of the Company's U.S. assets and business operations. The Subsidiary Guarantors are listed in Exhibit 22.1 to this Annual Report.

The Parent Guarantor and the Subsidiary Guarantors have guaranteed the Senior Notes on a full and unconditional, joint and several, senior unsecured basis. The guarantees are subject to certain customary release provisions, including that a Subsidiary Guarantor will be released from its respective guarantee in specified circumstances, including (i) the sale or transfer of all of its assets or capital stock; (ii) its merger or consolidation with, or transfer of all or substantially all of its assets to, another person; or (iii) its ceasing to be a majority-owned subsidiary of the Issuer in connection with any sale of its capital stock or other transaction. Additionally, a Subsidiary Guarantor will be released from its guarantee of the Senior Notes at such time that it ceases to guarantee the Issuer's obligations under the Credit Agreement (subject to the satisfaction of customary document delivery requirements). The obligations of the Subsidiary Guarantors under their guarantees are limited as necessary to prevent such guarantees from constituting a fraudulent conveyance or fraudulent transfer under applicable law.

The Parent Guarantor and the Issuer are holding companies that conduct substantially all of their operations through their subsidiaries, which own substantially all of our consolidated assets. The Parent Guarantor has no material assets other than the stock of its immediate 100% owned subsidiary, the Issuer. The principal source of cash to pay the Parent Guarantor's and the

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Issuer's obligations, including obligations under the Senior Notes and the guarantee of the Issuer's obligations under the Credit Agreement, is the cash that our subsidiaries generate from their operations. Each of the Subsidiary Guarantors and our non-guarantor subsidiaries is a distinct legal entity and, under certain circumstances, applicable country or state laws, regulatory limitations and terms of other debt instruments may limit our subsidiaries' ability to distribute cash to the Issuer and the Parent Guarantor. While the Credit Agreement and the Indentures generally limit the ability of our subsidiaries to restrict payment of dividends or other distributions to us, these limitations are subject to certain qualifications and exceptions, which may have the effect of significantly limiting the applicability of those restrictions.

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. While the non-guarantor subsidiaries do not guarantee the Issuer's obligations under our outstanding debt, 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 Senior Notes, Credit Agreement, the Company's other outstanding debt, Common Stock dividends and Common Stock repurchases.

The summarized financial information of the Obligor Group is presented below on a combined basis after the elimination of: (i) intercompany transactions among such entities and (ii) equity in earnings from and investments in the non-guarantor subsidiaries. Transactions with, and amounts due to or from, non-guarantor subsidiaries and affiliates are separately disclosed.

Share Capital

On February 9, 2022, we declared a quarterly cash dividend of $0.68 per share on our Common Stock amounting to approximately $73 million. The cash dividend will be paid on March 8, 2022 to holders of record as of February 22, 2022.

Our Board of Directors has authorized the aggregate repurchase of $6.9 billion of our Common Stock since February 2008. These authorizations give management discretion in determining the timing and conditions under which shares may be

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repurchased. This repurchase program does not have an expiration date. During the year ended December 31, 2021, we repurchased shares of our Common Stock at an aggregate cost of $1.0 billion. As of December 31, 2021, we had $1.1 billion remaining under authorizations by our Board of Directors.

See Note 14 - Stockholders' Equity in the accompanying consolidated financial statements for further information.

Contractual Obligations, Guarantees and Commitments

We calculated $282 million of all future interest payments on debt and other obligations using the rate in effect on December 31, 2021 and $448 million of all future pension and other postretirement funding obligations.

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

In the accompanying consolidated financial statements, see Note 10 - Current Other Liabilities for current asset retirement obligations, Note 11 - Debt for a description of the guarantees under our Senior Notes and Credit Agreement, Note 12 - Benefit Obligations for a description of the pension and other postretirement funding obligations, Note 13 - Environmental for a description of environmental obligations, Note 16 - Income Taxes for a description of uncertain tax positions, Note 17 - Leases for lease obligations and Note 20 - Commitments and Contingencies for a discussion of commitments and contingencies related to legal and regulatory proceedings.

Market Risks

See Item 7A. Quantitative and Qualitative Disclosure about Market Risk for further information.

Business Environment

In the latter part of 2021, we experienced significant cost inflation, inflationary pressure and supply disruptions related to the sourcing of raw materials, energy, logistics and labor. We continue to closely monitor the impact of COVID-19 variants on demand conditions and the supply chain. Average prices of energy feedstocks, particularly natural gas, which are a significant input and source of energy for our manufacturing operations, have continued to increase in the Western Hemisphere and particularly in Europe. We also experienced, and continue to experience, cost pressure on raw material inputs. We undertook pricing actions throughout the year intended to offset these inflationary headwinds. Moderation of Chinese acetyls pricing is expected to continue trending to more normalized levels into the middle of 2022. While we took proactive actions to accelerate turnaround and maintenance activity to earlier in the year, which supported our ability to increase volume and meet the demand by our customers, the sourcing constraints we experienced led to lost production. We expect that sourcing cost and inflationary pressures will continue to be significant across the business through 2022.

Critical Accounting Policies and Estimates

Our consolidated financial statements are based on the selection and application of significant accounting policies. The preparation of consolidated financial statements in conformity with U.S. 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 consolidated financial statements and the reported amounts of 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 believe the following accounting policies and estimates are critical to understanding the financial reporting risks present in the current economic environment. These matters, and the judgments and uncertainties affecting them, are also essential to understanding our reported and future operating results. See Note 2 - Summary of Accounting Policies in the accompanying consolidated financial statements for further information.

•Recoverability of Long-Lived Assets

Recoverability of Goodwill and Indefinite-Lived Assets

We assess the recoverability of the carrying amount of our goodwill and other indefinite-lived intangible assets annually during the third quarter of our fiscal year using June 30 balances or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be fully recoverable.

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When assessing the recoverability of goodwill and other indefinite-lived intangible assets, we may first assess qualitative factors in determining whether it is more likely than not that the fair value of a reporting unit or other indefinite-lived intangible asset is less than its carrying amount. The qualitative evaluation is an assessment of multiple factors, including the current operating environment, financial performance and market considerations. We may elect to bypass the qualitative assessment for some or all of our reporting units or other indefinite-lived intangible assets and proceed directly to a quantitative analysis depending on the facts and circumstances.

In performing a quantitative analysis of goodwill, recoverability of goodwill for each reporting unit is measured using a discounted cash flow model incorporating discount rates commensurate with the risks involved. The key assumptions used in the discounted cash flow valuation model include discount rates, growth rates, tax rates, cash flow projections and terminal value rates. Discount rates, growth rates and cash flow projections are the most sensitive and susceptible to change as they require significant management judgment.

Management tests other indefinite-lived intangible assets quantitatively utilizing the relief from royalty method under the income approach to determine the estimated fair value for each indefinite-lived intangible asset. Key assumptions used in this model include discount rates, royalty rates, growth rates, tax rates, sales projections and terminal value rates. Discount rates, royalty rates, growth rates, growth rates and sales projections are the assumptions most sensitive and susceptible to change as they require significant management judgment.

Specific assumptions discussed above are updated at the date of each test to consider current industry and company-specific risk factors from the perspective of a market participant. The current business environment is subject to evolving market conditions and requires significant management judgment to interpret the potential impact to our assumptions. To the extent that changes in the current business environment result in adjusted management projections, impairment losses may occur in future periods.

See Note 9 - Goodwill and Intangible Assets, Net in the accompanying consolidated financial statements for further information.

•Benefit Obligations

Various assumptions are used in the calculation of the actuarial valuation of the employee benefit plans. These assumptions include the discount rate, compensation levels, expected long-term rates of return on plan assets and trends in health care costs. In addition, actuarial consultants use factors such as withdrawal and mortality rates to estimate the projected benefit obligation. The actuarial assumptions used may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. These differences may result in a significant impact to the amount of net periodic benefit cost recorded in future periods.

Pension assumptions are reviewed annually in the fourth quarter of each fiscal year and whenever a plan is required to be remeasured. Assumptions are reviewed on a plan and country-specific basis by third-party actuaries and senior management. Such assumptions are adjusted as appropriate to reflect changes in market rates and outlook.

See Note 12 - Benefit Obligations in the accompanying consolidated financial statements for further information.

•Income Taxes

We regularly review our deferred tax assets for recoverability and establish a valuation allowance as needed. In forming our judgment regarding the recoverability of deferred tax assets related to deductible temporary differences and tax attribute carryforwards, we give weight to positive and negative evidence based on the extent to which the forms of evidence can be objectively verified.

The recoverability of deferred tax assets and the recognition and measurement of uncertain tax positions are subject to various assumptions and management judgment. If actual results differ from the estimates made by management in establishing or maintaining valuation allowances against deferred tax assets, the resulting change in the valuation allowance would generally impact earnings or Other comprehensive income depending on the nature of the respective deferred tax asset. In addition, the positions taken with regard to tax contingencies may be subject to audit and review by tax authorities, which may result in future taxes, interest and penalties.

See Note 16 - Income Taxes in the accompanying consolidated financial statements for further information.

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Recent Accounting Pronouncements

See Note 3 - Recent Accounting Pronouncements in the accompanying consolidated financial statements for information regarding recent accounting pronouncements.