Good day, ladies and gentlemen, and welcome to the second quarter 2011 Celanese Corp. earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to hand the presentation over to Mr. Mark Oberle, Senior Vice President of Corporate Affairs.

Thank you and welcome everyone to the Celanese Corporation second quarter 2011 financial results conference call. My name is Mark Oberle, Senior Vice President of Corporate Affairs. On the call today are Dave Weidman, Chairman and Chief Executive Officer; and Steven Sterin, Senior Vice President and Chief Financial Officer. I'd also like to introduce Jon Puckett, our new Vice President of Investor Relations. Jon joined Celanese with a distinguished track record of investor relations and finance experience, most recently with ACS through the acquisition by Xerox. Welcome, John. The Celanese Corporation's second quarter 2011 earnings release was distributed via BusinessWire this morning and is posted on our website, celanese.com. The PowerPoint slides referenced during this call are also posted on our website. During this call, management may make forward-looking statements concerning, for example, Celanese Corporation's future objectives and results, which will be made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The limitations inherent in such forward-looking statements are detailed on Page 6 of the earnings release referenced during this call. Celanese Corporation's second quarter 2011 earnings release references the performance measures, operating EBITDA, business operating EBITDA, affiliate EBITDA and proportional affiliate EBITDA, adjusted earnings per share and net debt as non-U.S. GAAP measures. For the most directly comparable financial measures presented in accordance with U.S. GAAP in our financial statements and for a reconciliation of our non-U.S. GAAP measures to U.S. GAAP figures, please see the accompanying schedules to our earnings release posted on our website. This morning Dave Weidman will review the performance and strategy of the company, and Steven Sterin will provide an overview of the business results for each segment and the financials. We'll have a question-and-answer period with Dave and Steven following the prepared remarks. I'd now like to turn the call over to Dave Weidman.

Thanks and welcome everyone to today's call. I'm extremely delighted to share highlights of Celanese's record performance and report on progress in achieving our strategic growth objectives. I'll also provide more details on our improved outlook for the remainder of 2011. And I could begin with the record quarter. Celanese's net sales in the second quarter were $1.8 billion. Operating EBITDA was $441 million. And adjusted EPS was $1.66 per share. Both operating EBITDA and adjusted EPS were our best quarterly performances ever. Steven will provide additional commentary on each of the segments, but overall, we saw continued robust demand across the company, good businesses, good execution of our strategy and a very solid global economy. Our business in Asia continues to experience healthy growth through Celanese's strong technology position, new and innovative applications for our customers and our exposure to a broad set of end market applications. Based on our second quarter performance and expectations for continued global economic growth in the second half of the year, we're increasing our full year 2011 outlook for adjusted earnings per share to be approximately $1.20 higher than last year's $3.37 per share. As you may recall, our previous outlook for adjusted EPS was $0.85 higher than last year's results. And we now expect operating EBITDA to be approximately $275 million more than last year's results of $1.1 billion, an increase from our prior expectation of at least $200 million more than last year's results. Celanese continues to make progress in meeting our short-term and long-term strategic objectives. On our Investor Day in May, we discussed our strategy for increasing shareholder value. There are two fundamental elements. First, topline growth, 100 to 200 basis points faster than global DGP. And second, converting our incremental revenue growth to earnings of at least 30%.…

Performance into the segment results, let me make a few general comments. Our business model continues to delver excellent results, and we continue to make significant progress towards our 2013 adjusted EPS target of greater than $6 a share. Financial performance on the quarter was strong across the portfolio. We continue to see healthy margins and sustained earnings growth with minimal volatility in our industrial and consumer specialties businesses and in AEM businesses. This quarter's results in AI demonstrate the strength of our low-cost technology-leading franchise and the periodic opportunity for shareholders to realize substantial value when margins move up in this business. AI is a truly unique business in this space, generating mid-teen EBITDA margins even when the utilization rate is around 80% and high-teens and low-20% margins from time-to-time as well. Let's now review the second quarter performance and our outlook for each business beginning with Advanced Engineered Materials on Page 7 of the earnings presentation. This business continued to deliver strong earnings and margins, as this innovation in application development efforts has continued to fuel growth. Net sales were $346 million, up $64 million from last year, largely due to 9% higher pricing primarily related to improved product mix and increased value-in-use pricings on sustained global demand. Net sales also benefited from the impact of our recent acquisition of the LCP and PCT product lines from DuPont. We saw strong demand for our high-engineered polymers during the quarter. But some of these ton volumes continue to be constrained as we build inventory for our planned European capacity expansion in order to support our customers' needs. This constraint will abate as we start up our new facility in the second half. Operating EBITDA was $107 million, up $9 million from last year's results as the higher pricing more…

Before we start the Q&A, I'd like to ask you to limit yourselves to one question and one follow-up, so we can get as many people through the queue as possible. If you have additional questions and time permits, we'll ask you to get back into the queue.

(Operator Instructions) Our first question will come from the line of Bob Koort with Goldman Sachs.

I appreciate the additional disclosures on ethanol. The Fluor letter you guys posted a couple of months back, I am just curious why you waited a few months? Was that waiting for the other consultant to validate the technology? And then secondly, what causes the toggle switch on whether you build one or two 400,000 ton plants in China?

To answer your first question you asked there, they were staggered when they started and they were staggered when they delivered their results. The toggle switch, the decision-making on the second unit, one versus two, really depends on the market uptake of the first one. Our strategic target is to go after growth in industrial ethanol. And on that basis, the second unit will come up two to three years after the first one. Having said that, you could have changes in the outlook of fermentation ethanol, corn-based ethanol or a food product based ethanol in China, where they would want to convert the land back into food rather than put it into some type of chemical production. And the demand in the market may dictate the second plant quicker than the first plant.

Our next question comes from the line of P.J. Juvekar with Citigroup.

A couple of question on your raw materials. You talked about what's happening to coal or sin gas cost in China. How much are they up year-over-year?

When we think about coal cost or sin gas cost or frankly methanol cost, we look at it relative to the competition, because with the lowest cost manufacturing position as raw materials go up or down, there is a same (inaudible) competition in the marginal materials advantage that we have remains essentially unchanged. Year-over-year, it's similar to broad energy complex movements up. Raw materials were significantly higher year-over-year. As we said before, we got natural hedges throughout our business as well as an advantage on the cost curve that allows us to mitigate those. Through the first half of the year, no change to look in Q1 to Q2, some sequential movement out in some raw materials, but much more dramatic if you look at it year-over-year.

Dave, I appreciate that you were diversified in your raw materials globally. So my second question is given the shale gas advantage in the U.S., do you have any plans to take advantage of that in your U.S. assets?

We continue to look at that, P.J. There is a huge advantage. Because we are a company that has the most products and most technology around natural gas, we look at that keenly. On the margin, I would say that we are making decisions for U.S. production more favorable today than we were in an environment three or four years ago. On the margin, it's much more economical to produce here and shift to other parts of the world such as Europe than it is in Asia right now. So on the margin, we are making favorable decisions here. And longer term, we continue to evaluate more and more projects, and we will keep you posted as we make those decision.

Our next question comes from the line of Kevin McCarthy with Bank of America-Merrill Lynch.

Dave, what gas and price levels are you incorporating into your financial guidance for the back half of the year? And maybe you can talk about the recent volatility in that market and what were you seeing here in the month of July?

Let me start on and then Steve can fill in the gaps. So in the second quarter, a little bit in the first quarter, but mostly in the second quarter there was unplanned outages across the industry. We were out with the planned outage, but you had several other manufacturers with planned and unplanned outages. We would say that the industry utilization rate increased by about 10% or about 10% of the available capacity was offline. So we think in a more normal world, the industry utilization is somewhat below 80s. That probably pushed it up into the below-90s. That does two things. One, it gives you some sense of the shape of the cost curve and the advantage that we have. Second, it gives you some idea going forward. There still are outages in the marketplace. There are manufacturers that are struggling with getting their plants up and operating. We see a gradual return to this margin that we would see at low-80% level utilization over the second half of the year. And we also have to take into account that we will have more capacity due to a fewer planned outages than we had in the first half.

So you'd expect to see a moderate decline as that capacity comes back online versus the step-down. So think about it modestly declining through the second half of the year. Keep in mind that we have that planed outage in the second quarter. So we'll have some additional volumes as well as we move into the third quarter. So on balance, you should continue to expect to see strong results from this business, and as we said, towards the back half of the year starting to move back towards more normalized margins, which are in the mid-teens.

If I look at your own segment volume number of minus-9% presumably that was affected by your own averages, but perhaps you could comment on what the magnitude of that outage was. Or said differently, what is your take on the underlying market rate of consumption for acetyls at this point?

We think that underlying rate should be running at rates that we'd think would be normalized, 81%, 83%, someplace in there. It's in the low-80% range. And if you look at the cost curve, we would jump up to the next level on pricing and margin high 80% range. And then when you cross 90%, you reach another threshold.

At Investor Day, we said that plus-$1.7 billion of EBITDA in 2013. It does not need acetic acid margins to be any higher than they would be on this normalized 82% range. And there is the possibility in that '13 timeframe that margins could be higher, but we would count that as one of the three upsides to 2013 that we highlighted on Investor Day. Margin expansion was one of them. The second one was an increased automotive production, particularly in North America. And the third one was housing. The U.S. housing is lagging. But you saw our Industrial Specialties business had a great quarter, and that was without any boost from housing at all. So there is at least those three upsides to 2013.

Our next question comes from the line of John McNulty with Credit Suisse.

Just a quick question on the 2013 outlook again. I don't believe that outlook has made any assumptions for Nanjing being retrofit for the ethanol opportunity. How should we be thinking about the possible upside for that, especially given that it can switch from one to the other? So can you put that in perspective for us?

We did say that we will be north of $1.7 billion in our expectation for 2013. So this only reinforces that. If you look at the current market for industrial ethanol, pricing in the 900 to 1,000 range per ton, we've said that we'd have margins more to 30% today in those businesses. So that gives you a sense, nice profitability. As we talk, we will improve the overall mix of the size, because we're going to have to modify the rest of the (inaudible).

When we think about the profitability of that 200,000 tons, is it fair to kind of think of it as just half of the profit of 400,000-ton facility or are there puts and takes as to how to think about the incremental profitability on this smaller plant being tied into the larger plant?

The technology is very scalable. It allows us to get benefits pretty early in the scale-up. So this is still a pretty large plant. It would be one of the largest plants in China, 200,000. So you can think about it as having characteristics of margin being south of that.

Our next question comes from the line of David Begleiter with Deutsche Bank.

Just to think about the incremental 200,000 tons, it is not incremental to the existing AA plant or it would be net of that plant in theory?

Yes, that's the way to think about it. You've got an existing acetyl complex, and we have some constrains on raw materials. Within those constrains, we will have the choice of optimizing the profitability by taking away one of the products coming out of there and putting it into ethanol. But at this point in time, though, ethanol will be pretty compelling versus some of the lower profit products we have.

And would this supersede the AO Plus 2 expansion of another 300,000 tons to 1.5 million tons?

When you say supersede, no, we have the capability of doing that. We have technology that allows us to get more capacity out of our units today, all of our units. Strategically, our goal is to maintain the share of the acetic acid, somewhere in the 30% to 35% range. And we will make incremental investment in order to do that, whether it be Nanjing or Clear Lake or Singapore, wherever it makes sense to the systems. As we put capacity in for ethanol, that's a new market, and we've balanced our systems to meet both strategic objectives, pursue ethanol as well as maintain the share in our acetyl business.

And as we said before, because of our capital advantage, de-bottleneck versus the greenfield, you may make the different decisions, because you've got raw material advantages or you get better site agreements because of different dynamics of the markets. So we look at both the opportunities for de-bottlenecks as we move up there. What we announced on Investor Day, we have AO Plus 3 technology that allows us a good 1.8 million tons in the new greenfield facility.

Dave, just lastly, could you help frame the Kelsterbach opportunity as the plant ramps up?

Yes, we've got more capacity in the facility, about 40% more capacity, which will give us another three to four years of growth. So it feels growth will ramp up over time and take us even beyond 2013 for the growth in our business. And we've also talked about putting in place technologies which will reduce energy costs as well as our regular costs. So we expect to see improvement there as well.

And I think, Dave, this and a lot of the other things that we talked about at Investor Day is consistent with the numbers we shared in 2013. This will supportive of those numbers.

Our next question comes from the line of Frank Mitsch with Wells Fargo Securities.

Just a question on your increasing guidance, $75 million for the year versus what you thought three months ago. Obviously, that's a function of some of the second quarter upside as well as a better second half. Can you give us an indication in terms of which business segments are performing better than what your thoughts were just three months ago?

Versus three months ago, we first saw the movement because of the planned and unplanned outages in AI. We saw the benefit of that in the second quarter. On the EPS basis, you're right about $0.25 in the second quarter versus the first call number. And as we look out to the second half, because it's going to take some time for the rest of that capacity to come on, we could see a moderate slope to the line as the rest of the capacity comes online. So the additional $0.10 will come principally from the AI. And the rest of our businesses are performing well and as expected. And the trajectory line that we would expect at this point and have expected will take us through the $1.7 billion in 2013.

So predominantly AI, but the other businesses are performing well relative to what your expectations were?

Yes, absolutely. We're delighted with the performance of all businesses.

Just on the consumer specialty side, you did a good job of framing why the volumes up year-over-year more related to 2010 versus anything in 2011, although your margins have dropped low or just equal to basically 20%. When do we get back to the kind of 22% level on the margin side there?

That range that you talked about is the right range. Because of the pricing in this business is more of annual, when you see a falling raw material environment, low energy cost environment, you tend to be at the upper end of that range. And when you see our volumes well above, like we saw in the first half of this year, in tends to pressure a little bit towards the bottom. As you said, margins are high. So we're pleased with that. But that generally is what will drive you around that range.

Our next question comes from the line Edlain Rodriguez with Gleacher & Company. Edlain Rodriguez - Gleacher & Company: Just a quick question on (AEA). I mean it seems like lately prices have been much stronger or they've been swinging much more than in the past. Can you talk about what's going on there? Is it like a commoditization of the business, or what else is going there that's pushing prices higher?

The way we do our accounting, you get mix percents as well as pricing. So with the overall growth in the market, with the constrained capacity that we have today, there is a significant upgrading of the mix, and that's reflected in our price line. And I'd say that's a substantial part of what's going on. Also, as you think about the world of products or materials that we compete with out there, whether they will be metals or other plastics, it's a different value proposition today than it was at a year, 18, 24 months ago, as those costs have gone up. And so we price on a value basis. In some states, it's not across the broad. But in some states, there has been more opportunity to normalize the higher value level than there has been in the past. Edlain Rodriguez - Gleacher & Company: How much of the portfolio in AEM would you say has that ability to raise prices or to see pricing movement like that?

The way we think about it is more on the basis of how we deal with our customers and their applications. A substantial part of our business, particularly the very high value in used part of the business, it is a very long-term relationship for the price discussion that's ever come up. Now obviously as the value equation changes, every new application you're into, you have a different discussion on that. And then there is some business in the middle where you may be able to have a price discussion once every three to five years. And everyone has seen what's happened to prices in the commodity space over the last 12 months, 18 months, 24 months. And I wouldn't expect going forward you are going to see substantial movement in price. I think these two factors, constrained capacity that improves the mix substantially, combined with the macroeconomic dynamics or the product we compete with is a unique situation that I don't think we have seen. Actually, this is the first time in 11 years I have been involved with the pricing.

Our next question comes from the line of Hassan Ahmed with Alembic Global Advisors.

It seems ethanol is obviously on everyone's mind. So another one on ethanol. I know you guys are initially targeting the industrial ethanol market, but it seems that you haven't really ruled out the fuel blending side of things as well. Obviously with the facilities coming in China in particular, as it stands today, obviously there is a fair bit of methanol being blended with fuel in China, and there seems to be a disconnect between ethanol prices and methanol prices, a disparity, in China in particular. So how should we think about the competitiveness of ethanol on the fuel side in China with regards to methanol.

There is several parts to the question. Let me try to take one and let Steve deal with the rest of it. It really doesn't matter what country it is, China or the U.S. or India or Indonesia or Australia. We haven't talked with one region that hasn't said we want to reduce our R&D standards. We wanted to get out of the import energy gain as much as we can. So lots of these places are looking for multiple options. We've had a convincing dialogue that rather than the different options being competitive, they're essentially complementary. There are different ways of reaching a national strategy of getting out and importing foreign oil. And in no conversions we have been in, there has been a business there is another (inaudible) taking oil from regions of the world that are unstable. So that's the general dynamic. And then, Steve, maybe you want to answer some of the more specific questions.

As you said, we first announced the technology, we announced in the commercial space on the industrial side, and you've seen the progress we've made there. And we mentioned we're exploring the fuel market, because there is new novel technology to the marketplace. On the Investor Day, I gave you an update that we have substantial commercial discussions that's been very well received with a number of customers. I'd say that those are commercial discussions continue and they continue to advance well. As Dave said, there is a number of countries globally and we're building a pipeline of additional customers that have expressed interest to enter into the commercial discussions. So overall, as Dave said, because of the dynamics, we've got a favorable reception for the technology. In addition to being another option, one thing I'd point out in methanol is if you look at methanol on a fully blended basis, the cost of methanol in gasoline, because it has very high rebate for pressure, there is other additives that have to be blended into gasoline, even in China. And as a result, the blended cost of methanol in gasoline is a lot higher than just the absolute comparing ethanol to methanol. From a customer perspective, our technology is economically available to methanol choice.

Let's just take China as an example. They are going to be blending with methanol. They are going to be blending with MTBE. They are going to be blending with ethanol. The amount of demand growth that there is and their desire to get out of the import oil gain, there's a room for a lot of companies.

And I think obviously the size of ethanol versus methanol is miniscule, right? I mean you are talking about a $25 million ton of methanol sitting there versus anything on the ethanol side?

That's right.

Our next question comes from the line of Bill Young with ChemSpeak.

I realized that there were special events here in the second quarter that reduced your overall shipment level. But what was the volume trend or growth in this quarter? And maybe you can give us your longer-term outlook for the key segments as to growth versus GDP volume growth.

Remember we're very, very global. We got 40% of what we do in the Asia region. So our underlying growth was good. We saw a very solid economic environment. We continue to see a very solid global economic environment. As we've highlighted on Investor Day, our Advanced Engineered Materials, we think there would be growth going forward to two three times GDP as we go after new applications or continue to penetrate different platforms such as automotive. In the Acetyl Intermediates space, that growth there is 50 bps to 150 bps faster than global GDP. That's been a historic growth trend, and we'd continue on that line. The Consumer Specialties business, because of what we've got with acetate and those applications, that would probably be somewhat less than GDP, but again that's not really a GDP-driven business. It's a relatively stable growth business. Outside of China, your growth is probably in the 1% range. And inside of China, you're looking at the 3% to 5% growth. Industrial Specialties, I think that's more of a GDP type growth with some of our new innovations and the advantages that we have with our vinyl chemistry versus acrylates, you may see growth there somewhat ahead of GDP.

Our next question comes from the line of Jay Harris with Goldsmith & Harris. Jay Harris - Goldsmith & Harris: I've got a balance sheet question. Trade receivables were up more than the revenues were up. What's going on there?

Our receivables, we tend to average somewhere between 50 and 55 days, varies throughout the year depending on the seasonality. And in particular this quarter, we had a significant rise in sales in Asia where turns can be a little bit longer. So I expect that to be a temporary movement. But most of the working capital increases were driven by the overall increase in sales and the fact that it was increasing throughout the quarter. Jay Harris - Goldsmith & Harris: A follow-up on your technology. Does that commit you to go to higher chain alcohols at some point?

If you've heard what we said, the TCX technology is for ethanol manufacturer. We've also said that as we began the process, it actually came to TCX. Our baseline was we have significant technology base, very, very advantaged technology base in acetyl. And so we launched efforts to determine what we can do with our acetyl chemistry beyond our traditional products. And basically, ethanol was one of the first things that we came up with.

Our next question comes as a follow-up from the line of Bob Koort with Goldman Sachs.

This is (inaudible) for Bob. Just a couple of questions on Kelsterbach relocation. Do you have an updated timeline on when you expect to have that fully behind you and the capacity that's sustainable?

We'll be up and running in the second half with majority of the facility and continue to ramp the rest of the capacity over the next 12 months or so. I mentioned also you'll start to see depreciation of about $10 million a quarter starting with the second quarter.

So the inventory building that's been occurring in the last couple of quarters, will that still be a factor in the third quarter, or will that be mostly behind you now?

No, the constraints that we've had on volumes earlier will be behind us starting in the second half.

As you were building inventory, has there been a meaningful margin benefit from having made that product several quarters ago when raw material prices were a little bit lower and then being able to sell that now with higher prices because of higher current raw materials? Has that been meaningful, or is that just going to go underway?

We exclude all the inventory build or draw characteristics associated with the movement as well as all the other costs. You see that's up a little bit. On your specific question, not expecting anything significant.

Given all the headlines about some slowdown and tightening in China, including a (inaudible) last night and your large position in that country, I was hoping you could just comment on what you guys are seeing on the ground and the various demand trends there?

Frankly, we don't anticipate it. Our business model is something different than the GDP-driven business model. Think about our acetate joint ventures, and B&G is there. It's really not a GDP-driven. Nanjing is very strong, stable, significant earnings and cash generation. I think about our acetyl and acetic acid in particular, but we run (Class IV) when 20%, 25% and the industry can't cover the variable economic. At the end of the day. we can't frankly tell you if it's between a single digit and double digit growth in that region. A lot of high-value added applications in our Ticona business, a lot of translation going on, very low utilization in those million of cars produced in China. So a lot of translation going on in those cars. Short-term, mid-term, long-term, Asia is a tremendous place to grow, and Celanese is well positioned for that growth.

Our final question will come from the line of Kevin McCarthy as a follow-up from Bank of America-Merrill Lynch.

My follow-up relates to your joint ventures and in particular POM resin. Just wondering, Dave, whether you see any opportunity to increase your ownership stake in Polyplastics. I saw you're announcing a new 90,000 kilo ton plant there in Malaysia, and I'm wondering if you see any opportunity in general, but also in connection with that expansion analogous to the model that you have it, even seen where your stake will be rising with the expansion in 2013?

Our answer is really no different than it has been in the past. Ventures that we have are all strategic. They are all aligned with global businesses. Polyplastics is aligned with Ticona. Though we don't have consolidation, we have a substantial strategic benefit and very active efforts to maximize that strategic alignment with each of our ventures. It's our interest, it's our desire to pursue arrangements where we could get more strategic value out of our ventures. We've been able to increase the benefit of our company, I believe, by Ticona investment opportunity that we had in the Middle East. So we continue to look for those opportunities with all of our ventures. Our acetate ventures, for example, we continue to expand that over time and got a lot of value-added. We'll just keep doing those things and you periodically may hear some things coming.

This concludes our Q&A session at this time. I would now like to hand the conference back over to Mark Oberle for closing remarks.

Thank you every one for taking the time this morning. As we move forward, I'll be working with Jon for transition. In the meantime, feel free to call either Jon or myself. The contact information is on the press release, and we look forward to hearing from you soon. Thank you very much.

Thank you for attending today's conference. This concludes the presentation. You may now disconnect and have a great day.