Jon Puckett - VP, IR Mark Rohr - Chairman and CEO Christopher Jensen - SVP, Finance and Interim CFO.

Duffy Fisher - Barclays David Begleiter - Deutsche Bank Laurence Alexander - Jefferies John McNulty - Credit Suisse PJ Juvekar - Citi Frank Mitsch - Wells Fargo Cooley May - Macquarie Kevin McCarthy - Bank of America Merrill Lynch Bob Koort - Goldman Sachs Vincent Andrews - Morgan Stanley.

Good morning, and welcome to the Celanese Fourth Quarter 2014 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Jon Puckett. Please go ahead..

Thanks Drew. Welcome to the Celanese Corporation fourth quarter 2014 conference call. My name is Jon Puckett, Vice President of Investor Relations. With me today are Mark Rohr, Chairman and Chief Executive Officer; and Chris Jensen, Senior Vice President, Finance.

The Celanese Corporation fourth quarter 2014 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.

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 in the Investor Relations section under Financial Information.

The earnings release, non-GAAP reconciliations, presentation and prepared comments have been submitted to the SEC in a current report on Form 8-K. This morning, we will begin with some introductory comments from Mark Rohr, and then we'll field your questions. I’d now like to turn the call over to Mark..

Thanks John; and good morning everyone. Our prepared remarks were released with earnings, so I'll keep my comments brief then open the line for your questions. I'm pleased to report the completion of a record year with a record quarter, reporting 2014 adjusted earnings of $5.67 per share, which reflects 26% growth over the prior year.

For the fourth quarter, we reported adjusted earnings of $1.28 per share, that's 23% growth year-over-year. Our results were driven by changing dynamics in the Acetyl Chain, the ability of our materials business to identify, develop and provide specific materials to our customers, and strong commercial and manufacturing performance.

Sales for the year totalled $6.8 billion. That's an increase of 4.5%. And operating cash flow totalled $962 million setting a record for the company. Consolidated segment income margins increased 240 basis points to 18.6%, really great performance.

As we start 2015, our underlying business is quite healthy and should help us offset some of the headwinds we expect to see through the year, particularly the fallen euro to U.S.

dollar exchange rate, lower crude oil impacts on pricing and margins in the petrochemical industry, lower energy and raw materials cost, the cellulosic inventory correction and uncertainty in the macroeconomic environment.

We have a solid list of actions; our teams are working, that should help minimize the impact of some of these headwinds and set us up for growth through the year and into 2016. In this volatile environment we expect first quarter earnings to be consistent year-over-year and our full year to be in the range of $5 to $5.50 per share.

With that, I'll now turn it over to Jon for Q&A..

Thanks Mark. I'd like to remind everybody, we'd like to you ask one question and one follow-up and then we'll move to the next. Drew, go ahead..

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Duffy Fisher of Barclays. Please go ahead..

Yeah. Good morning, fellows..

Good morning, Duffy..

A question on tow, when your competitors kind of called out some inventory issues after Q2 of last year and you guys, at that time, didn’t see it. Now it seems to be hitting you.

Can you just talk about what's your visibility in that market? How comfortable are you with the analysis that you've done that you'll be able to, kind of, deliver your internal budget against that business..

Yeah. Thanks, Duffy. Yeah, if I go back a bit in time, Duffy, it became apparent to us as we were shutting down Spondon there had been actually a slow -- not slow, but a trend in the part of the industry to maintain fairly hot tow volumes. And I think that was a reflection of the overall tightness in capacity that existed for several years.

We took down Spondon in '12 and that sort of -- in late '12, and that sort of increased yet again. And we've reminded folks of that. Our customers have, for the most part, managed that pretty well. I think others; they've got an early signal of that and reported those results to you.

We're talking just directly with our customers, Duffy, and they seem to indicate with tremendous sincerity that they want to go in and take a step change in inventory. And when they look beyond that they think it will return. But the inside I just have is dealing with the customers that we are interface with..

Okay. And then just on the numbers, you called out $0.30. If I just kind of run that through your P&L that's about $60 million in EBIT, run that through the margins in that segment and that's about $200 million in revenue roughly, which is about a third of the first half revenue from last year.

Are those the right numbers that we could actually see revenue down a third in that segment in the first half?.

Yeah. I don't tend to look at that way. We really look at EBIT. EBIT numbers are absolutely I think what we are expecting..

Okay. Okay, great. Thanks fellows..

Yeah..

Thanks, Duffy. Drew, let's move on to the next question..

Next question comes from David Begleiter of Deutsche Bank. Please go ahead..

Thank you. Good morning. Mark, also on tow, what will you get pricing-wise this year as tow pricing can be up or down.

And any change in your view as to the longer-term demand trends and actually what's your view right now as to the long-term demand trends in tow going forward?.

Yeah. We have some mix effects in price, you know, because of swap agreements we have. But generally speaking, the industry pushed pricing early in the cycle and we got little bit of pricing, as we ended the cycle we gave up some pricing. So pricing net-net with mix is down a little bit year-over-year as well, let's say, David, in that.

The general trends that we see, I think if I look at the world outside of China we've been in this gradual decline. We haven't seen that slope change very much. If you look at China, China certainly through the step change early last year that we talked at length about.

They seem to be running at pretty steady rates now and anticipating pretty flat volume year-over-year..

Very good. And Mark, just lastly on Acetyl Medians.

Can you help us with the bridge of earnings in '15 versus '14 taking into account the hit from the expired methanol contract, the over-earning of VAM in '14? Any examples of the bridge there '14 versus '15 in AI?.

Yeah, David, it's Chris. So the methanol contract, we've talked about that being I think $0.40 to $0.60 per share on a year-over-year basis. If methanol stays its lower level that it is now, we're going to be at the low end of that estimate. I think your other question was more around kind of the VAM industry shift.

It's really hard to clearly separate that from just everything else going on in the business. And in particular, in our teams' efforts this past year really changed the way we go to market, the way we approach customers, pricing, placing volumes.

But having said all that if we were guessing, I think we'd guess that number maybe in the $70 million to $80 million year-on-year..

To the VAM decline year-over-year?.

Yeah, David. And I think that's a number that Chris shared with you, it's the number we use internally as we kind of range find it. But it's very hard to -- it's very hard to quantify, but right now as we look at the bridge that's the number that we internalize..

Thank you..

Okay. Thanks, David. Drew, let's move to the next..

The next question comes from Laurence Alexander of Jefferies. Please go ahead..

Good morning. There were comments and remarks about just broader destocking about your customers and your suppliers.

So can you elaborate a little bit on what you're seeing by end markets, which is -- how you think that might just stored first half trends versus back half, and implications for your working capital?.

Yeah. Primarily in this Acetyl Chains and how much of it is beyond the cellulose -- something about cellulose [skin] [ph] if you like.

But what we've seen in the Acetyl Chain is a lot of -- the folks that are close to the petrochemical industry, people are just taking their time to purchase, David, is what I would say, they are looking for -- I mean Laurence, they are looking for that. So they are looking for the bottom.

So we've seen some order slip as we ended the year in the January and we've seen some slippage out of January. That's what I'm trying to respond to. So I think until we get a sense of really where the floor is and where prices are moving, a lot of folks, if they can delay purchases, are going to do so. That's one of the reasons.

I think we're -- my personal view is all of us, we're going to be after little bit of a slow start as we begin the year. The second comment I'll make to that Laurence is Chinese New Year, as you know, falls a bit late. This year falls in mid-February-ish.

That in Asia is again, as you know so well, creates a little bit of a conundrum and folks try to really anticipate what the world looks like after Chinese New Year..

And then, in terms of what that might mean for your working capital days this year?.

Yeah. David, this is Chris. It's a little difficult to predict because it will really depend on that slope on demand and volumes. You look back at 2014 in the working capital performance; the businesses did a really nice job of controlling that.

We tend to look at that as working capital as a percentage of revenues and we experienced some levels that were really, really good in 2014. They managed that quite tightly. We watched this.

And, of course, the risk you face in kind of a deflationary environment is that you're holding some inventory that was produced at a higher cost than your current procurement of raw materials would suggest.

So, yes, there is a risk that if you see demand pressures you get a little bit [indiscernible] when you're looking at it as a percentage of revenues the way we do..

Thank you..

Thanks Laurence. Drew, let's move to the next..

The next question comes from John McNulty of Credit Suisse. Please go ahead..

Yeah. Good morning. Thanks for taking my question. So with regard to the FX headwinds that you had highlighted, they seemed a little bit bigger than I recall kind of the moves being in the past.

And I guess I'm wondering how much of that’s tied to some of the closures that you've done in Europe and how much product you're maybe moving from say into the U.S. or other regions into Europe.

Can you give us a little bit colour on that and maybe an update as to how much VAM and Acetic you actually do move to Europe from U.S.?.

Yeah. Let me -- it's Chris again, let me give you just kind of the high level picture of what we intended in the way that we put those remarks out there. So, we in kind of let's call it a more stable currency environment. We would estimate that $0.01 movement on the euro is about $0.03 to $0.04 a year for Celanese.

But that’s the view of how we're working in stable environment. When you'd see this kind of a significant quick movement in the euro that we have while that math would imply that the euro change year-on-year puts you at $0.60 or $0.70 a share that's kind of the first order effect and you can have second order effects that offset that.

We'll certainly do what we can on pricing to recover some of that. You look at the strength of our business in Europe and parts of that are going to be in industries where a lower euro actually helps those export volumes. So, when we put that number out there that's really kind of the first order effect. Now, moving on to your question about volumes.

Yeah, that's a bigger impact today than it would have been before. We closed plants in Europe. To kind of paint the picture for you, I can't walk through the details of volumes product by product, but let's call it maybe a third of this is just the fact that we have business in Europe. So it's just translation.

Probably two-thirds or more of this is revenue based and the fact that we're now selling a substantial amount of asset yield products in Europe that are produced in the U.S. So you now have U.S. costs but Euro-based revenues..

Okay. Great, No, that’s very helpful. And then just with the second question. The $100 million of raw material relief that was highlighted in the transcript, is that incorporated in your guidance at this point? It wasn’t exactly clear to us if it was or wasn’t..

No, I think what we're just talking about there is that we're seeing some step change. I think full and complete sense we could be down as much as $300 million in raw material. A good chunk of that is ethylene and a good chunk of ethylene remains formulated, so you wouldn’t get any -- doesn’t hurt other way.

So when we looked at that, we kind of looked at the non-formulaic material base John and that’s just simply a statement of view of how big the number could be. What we will attempt to do is keep it all and what I would say is that the others doing that are very, very low.

So we will work hard to keep as much of that as we can and work the system to not lose that, but I just want to give folks a range of the kind of a good guy theory that's out there that we're going to try -- try to capture part of it..

Great. Thanks for the color..

Thanks John. Drew let's move to the next question..

The next question comes from PJ Juvekar of Citi. Please go ahead..

Yes. Good morning. And thank you for giving us the FX sensitivity at $15 to the Euro.

Now are you taking any steps today to protect against any further potential weakening of the Euro?.

No. PJ we debated long and hard about that and of course it may be enhance I wish we should have done something about. But practically speaking our view is that we're not in the hedging business. We do take positions relative to receivables.

So we do balance sheet work that sort of minimizes or protect sales that we currently have, but we don’t go out beyond the realm of that 60-day kind of period..

Okay. And nothing related to your increase exports or anything like that..

No, no..

Okay. And then when you talked about destocking in the Acetyl Chain [through it] [ph] can you talk about geographies.

Is there a particular geography where you're seeing pronounced destocking relative to others?.

We'll, I think you're seeing in the -- there are two effects going on in that chain that need to sort themselves out and one is just a general -- the general movement of the industry to sort out where the base is, what’s methanol going to be, what’s CO is going to be.

How is that relative from production point of view and customers out there, that have their hands out expecting prices to drop. And so there is the stocking that I am talking about really in on a point of view of the consumers who are working their inventory out of their system as quick as they can and delaying purchases as much as they can.

We see that in Asia and in Europe both. The second effect that is unbelievably hard to quantify is the global trade flow that we're entering into -- the shift in global trade flows theoretically could happen as we get into the realization of what $50 crude means to the industry.

So there you can have different value equations for production in different parts of the world that have changed from where they were say a year ago and that's going to impact trade flows and I’ll be very honest PJ, we've not fully sorted that out this year.

So the combination of those things and the realization of those things, means that the folks just are not -- they're doing everything they can, not to buy and trying to delay that a bit and of course there is a limited time I say I can do that, but they're trying to go seek and find the best pricing they can find from folks around the world..

Okay. Okay. So just to be clear, you said more destocking in Asia and Europe may be less in U.S. .

Yes. Yes..

Thank you..

Thanks PJ. Drew let's move to the next question..

The next question comes from Frank Mitsch from Wells Fargo Securities. Please go ahead..

Good morning, gentleman. In the release, you talked about quote “positive signs in Europe” unquote, especially in auto. I am just wondering what sort of volume assumptions have you baked in to your guidance coming out of Europe and if could be a bit more granular in terms of particular areas of strength or weakness..

Yes I think. I am talking just generally for a second if I can try Frank, we've had a lot of success growing our penetration and auto over the last several years to the extent now that we for several years, we've enjoyed a growth rate in autos of some multiple of the IHS data growth rate.

So for instance, last year I think the overall industry grew 3.1% and our volumes grew about 9% into that industry. So this year, if you believe the data it would indicate they were off a bit, I think North America is 2.7% if my memory serves me down a bit in Germany, China’s like 6% or 7% and globally we're about 2.3% or so.

So we expect auto overall to be down a bit this year, but we're still seeing these trends, so our actual performance as we start this year in auto is very good. And I would say it's very good and I would say it's quietly slightly better than it was last year.

Even though if you look at the trends bill trends, probably going to be down 2% in volume this first quarter year-over-year. So I don’t know if it's really you asked, but we feel good about what’s going on there. I think the industry as a whole, is moderating this growth just a little bit and areas like China are bit worrisome.

I think you've read all reports on that. Brazil is pretty worse and Brazil has fallen quite steeply..

All right. That’s helpful and I know you had said in the past that you had a $100 million EBIT bridge in 2015 some measures, I think it was improving plan operations, you were thinking that that would add like $45 million supply chain efficiencies would add about $25 million and innovation would add about $30 million.

So I think that altogether $100 million call it around $0.50 a share and then in the release you said that your productive actions are $0.15 remain on track, am I worth the balance of that, is that on track and how should we think about that?.

When we talked about $100 million, we were outlining steps that we needed to take to overcome the methanol..

Correct. Yes..

And so I’ll try to say that in the script, we have done that. That’s happening. So we believe that with the actions that we've already taken and we're taking that will be able to negate the methanol headwinds on an annualized basis. Beyond that we're driving more productivity and the $50 million is what's immediately in front of us today.

We're working to find other things and develop other activities. So that’s $0.15. So that was above and beyond the numbers we gave last time..

Terrific. Thank you so much..

Okay. Thanks Frank. Drew let's move to the next question..

Then next question comes from Cooley May of Macquarie. Please go ahead..

Good morning, guys. Could you comment on the raw materials and particularly wood pulp, your ability to potentially maintain profit spreads in the back half of this year? And then also could this simply be a push back among your buyers? You're seeing your raw material basket drop, just holding off on buying and looking to push price low..

Yes. So the first part -- would you repeat the first part of that Cooley. I am not sure I really understood what you said..

The raw material setting in asset base, particularly wood pulp, per our data it looks to be down significantly and continuing a downward trend.

I am trying to figure it out is this an industry wide issue? And where spreads are likely to settle out toward the end of the year and if you are buyer of wood pulp in Asia why would you buy here? Why wouldn't you destock inventory press price lower as much as you can. And how can you maintain a profit spread in that setting..

Yes, I think -- if I go back to it from a consumption point of view, you cannot even see the price of tow and cigarette. You can't even see it. So from a point view of a consumer and I am not trying to say, consumers don’t care about price, but the consumers really are just about indifferent about tow price.

They are extremely concerned about tow reliability and availability and one of the reasons I kept all the inventory that they've kept Cooley. So I think if you look at it from a point of view of buyer, a buyer certainly don’t want to be disadvantaged on one hand.

The other hand they just want to, there they want the top quality and I think we've shared in the past how there is -- Alto is not the same. So it tends to be even some brand alignment around it to make sure the experience is the same from stick to stick. So we don’t see that from our -- that kind of broad pressure from our customer base.

When they fuss out is they fuss about reliability and making sure we got the volume to the bottom. If you look at the cost side, there has been some reductions in wood pulp. They are slowing through the industry and there may be some fringe buyers out there.

So non-majors that are using that as you've said to try to put some pressure back on whoever their suppliers are, but I don’t think -- I guess I would say, I don’t think that's a trend. I don’t think that that in itself foretells the collapse of a business. Model in I don’t think its necessarily sustainable..

Thanks..

Yes thank..

Okay. Thank you, Cooley. Let's move to the next question Drew..

The next question comes from Kevin McCarthy of Bank of America, Merrill Lynch. Please go ahead..

Yes good morning. Mark, can you speak to the nexus between the collapse in crude oil and your future capital deployment plans, for example I think you've been exploring a second methanol build out at Bishop.

Just wondering if the change in the energy backdrop alters your willingness stay short some methanol as an example?.

Yes, I think in that when we're certainly really reviewing options with some of the partners that we've been working with for that investment. And so Kevin we haven't a made decision today on that.

I think you've seen methanol prices really move dramatically particularly in Asia and so the Asian dynamic from my personal view you need to sort out just a little bit especially the role that MTO is going to play in the consumption of methanol there.

And I think from that then you can back up and get a better sense of what the economics and value equation looks like to produce in U.S. So I would say that that investment is still under consideration. That’s what I was thinking about. If I look beyond that you know lower, if you bake in '15 and say we're 50 forever that challenges fuel methanol more.

We've been doing more work of course with all of our partners in China and Indonesia and India and there continues to be a lot of engagement and debate and discussion in that.

But I would say that on the surface, Indonesian economics are not quite as strong as they we're, in part because the government has moved away from subsidies of fuel and so there the government bogie is not quite as high as it was. There's still a positive return on it, but it's not as good as it was.

I think if you look at other fuel sources that are out there, that move in concert with oil, it still remains a very attractive project. So as we go through this year, I think we will sort out, we will have a better view of the longevity of crude pricing at these levels and I think that could have an impact on future plans for methanol..

Great. That’s helpful. Second question if I may on the financial side, I think you had mentioned in the prepared remarks release last night that you expect your tax rate to dip below 20% in 2015.

Probably we could speak to what is driving that and on the balance sheet side? What an appropriate leverage ratio might be? I think you had indicated some deleveraging in the near future and how closer are you getting to your target leverage here?.

So I'll talk about the tax rate first and we didn’t give a pinpoint number just with some of the uncertainty. The geographic shifts to profitability can change that forever, but directly the reason it's going down is through some of this work we're doing with our Pan European headquarter in the Netherlands.

And in connection with that, it's changing some of the product flows in the company to a more favorable tax jurisdiction. So that's really the biggest part of driving that change on into 2015.

The second part of your question on leverage, we've never really put out specific leverage targets, but what we have said is -- is we do want to continue to strengthen the balance sheet of the company. And I think if you look back at the past three years at what we've been doing, it demonstrates that commitment.

I’ll take that kind of in a couple of buckets, one is that level, so we paid down about $230 million of debt and most of that was in this last fourth quarter.

If you look at another form of deleveraging is dealing with the underfunding in our pension plans and both at the end of 2012 and at the end of 2014, we made incremental contributions of $100 million in each of those years to bring that obligation down.

And at the same time, I think you're aware that we embarked on the termination of our retiree medical plan, which is consistent with what we've seen other companies do and in the end, we founded about $70 million into that but it reduced the liability by a couple $100 million just the way we structured that buy out.

And I am pleased to tell you that this past quarter there was another step back on the pension side. So there is a population of employees within that pension obligation that are former employees who have moved on to other companies, but we remain with an obligation to find some level of pension for them.

We made an offer to those employees to buy them out and succeeded in getting a group of them to accept that offer, which on a gross basis reduces that pension liability by over $200 million in exchange for about $150 million that came out of the plan.

So it didn’t come of the cash that you see on our balance sheet but rather came out of the plan, but again it's another form of working that obligation down and working on deleveraging. So I think in future periods, you'll see us continuing to work that down as part of the overall strategy for cash deployment..

Thank you very much..

Thanks Kevin. Drew let's move to the next question..

The next question comes from Bob Koort of Goldman Sachs. Please go ahead..

Thanks very much. Good morning..

Good morning, Bob..

You guys have been making some reasonable progress on VAE and other ethylene based products. I am wondering in light of the propylene chain falling apart of you're going to suffer maybe some competitive substitution push back there going forward.

What are your thoughts on that?.

Yes. There are some. I think Bob that's exactly right. There are some areas where we are seeing that, but Europe and Asia seems to be very -- remains very, very committed to some of the virtues especially in the coatings arena for those molecules.

So we're seeing still strong growth there and we're still moving ahead with our expansion in Asia building new VAE plan..

And Mark I guess may be to get away from the near term stuff, you've been there I think a little over three years now and I think when you came in, there was a desire to drive towards a more specialty oriented platform.

Just wondering if you might assess where you are in that evolution because it sure seems like the markets is not giving any credit forward, you get a trading multiple that looks more like a pure play commodity stock.

You mentioned in your remarks that you won't be able to hold on a raw material relief, which might imply, you haven't high graded the portfolio or maybe your products are more susceptible to some price dislocation.

So can you tell us where you are in that journey and what you might have to do to get a rating more appropriate for where you think the portfolio sits?.

Yes. Well it's a great question Bob. When we approach this starting in '12 to enroll deep dive into our business. We really concluded that we had two core capabilities.

One was around the material segment, which is about half the portfolio and if you look at the businesses we have there, all the molecules we have and the chemistries we have, there is a real push to mirror chemistry and application to drive that.

And we've had tremendous success and so if you draw a circle around Asian materials and a consumer which is also material, you will see really strong growth through that period of time. On the other side, which is technology and technology leverage, we really felt that we weren’t giving a chance to leverage that.

I would venture say in 2012 virtually our entire contractual relationships that we had, entire list of those contractual relationships with customers did not give us the ability to further negotiate and fully draw pricing.

And we've been working hard to change that and we've had good success changing that in parts of the world, but I would still say we're only about a third of the way there, Bob.

So, part of the ability that you saw last year of Celanese driving value, an industry-driving value is that we changed our approach in that industry and conduced ourselves, to be very honest, more like a specialty chemical company. We conducted ourselves a real-time value and real-time pricing.

So, I appeal that from a point of view of commerce we're conducting ourselves in a way that's going to reduce our volatility over time and give us much more consistent earnings growth. And we've targeted earnings growth double-digit CAGR, 12% CAGR over like a five-year period. And maintaining that is what's most important to me.

And I think in my world that's a reflection of really conducting yourself as if it was specialty. We've not be recognized yet for that. But I'm quite confident we will as time goes on.

The last thing I'll mention is as we roll out our -- internally our new strategy and then we're looking at new strategy, the updated version of our strategy looking forward to 2018, its very apparent to all of us that we'll need to bring in more businesses into the portfolio.

So M&A is taking a more of a front center effort for us to further build the chain, if you will, both on the C1 side and energy and material side in a way that we can further differentiate ourselves with customers and values that go back to shareholders..

Got it. Thanks..

Thank you..

Thanks Bob. Drew, let's move to the next question..

The next question comes from Vincent Andrews of Morgan Stanley. Please go ahead..

Hi. Thanks. Good morning, everyone. Could you just give us a sense of sort of what the imaginations are that allow 1Q to be flat year-over-year, maybe just sort of talk through the headwinds in the quarter and how the different segments should perform..

I thought that you are breaking -- you're breaking up a lot there, Vincent..

I'm sorry. I was just trying to understand how first quarter of '15 is going to be consistent with first quarter of '14. I assume there are going to be puts and takes between the different segments year-over-year given the headwind. So I was just hoping you could help us reconcile that as we update our models..

Yeah. I think whether it's just -- I think as we enter '15 we're talking about '15 earnings as we look at it here in the bottom line basis. We think it's going to be fairly consistent what we did in the first quarter of 2014.

We're expecting, if I can talk about that some, we're expecting stronger performance in a lot of the businesses like the Acetic Acid Chain and drive Acetyl Chain and ensure materials businesses and that will be offset by cellulosic, which we've talked about in the big inventory yet. This is going to occur -- a lot of that occurs in the first quarter.

And so that's how we kind of come to that balance number. Should get a little favourability in tax rate, as Chris mentioned, that will help a bit in there as well. But net of all those things you come in about flat..

Okay. And just as a follow-up, can you mention that M&A is becoming more front-center in your strategic discussion. Do you also talk about the other side of that which would be potentially selling things or making the overall structure of the company different? I mean there's obviously a cross.

The chemical industry, there is a lot of debate at many different work oriented companies about pure play or the conglomerate structure or what have you. And you're obviously in a variety of different things.

So do you look at sort of your portfolio on some of the parts basis? And do you have any thoughts about -- is it definitely the trigger to be adding versus the running opportunity to subtract or to make things different?.

No. There are opportunities. We've actually attempted some of those, and really from a value equation point of view was the right thing to at the time to take that step. So you shouldn't have a view that we're locked in to only one portfolio.

What I will say is that these two cores, when look at from a two core perspective and you set aside the chemistry portfolio of individual businesses, there is lot of combined strength there. And so, we feel good about the two cores, but clearly the pieces of those that at some point of time may better fit somewhere else and we'll be fine with that..

Okay. Thank you very much..

Thank you..

Okay. Thanks Vincent. Drew, let's move to the next question and we'll have this be the last series of questions..

Okay. And that question will come from Jeff Zekauskas of JPMorgan. Please go ahead..

Thanks very much..

Good morning, Jeff..

Hi. Good morning.

Celanese buys quite a lot of ethylene, my guess is something over 1 billion pounds, is that the right number? And how much of that comes under formulaic pricing and how much of it doesn't?.

That number is -- generically it's in the right range. I'll just put it -- I'll just say that..

Sure..

It's in the right range. All of our buys are formulaic..

Okay. Then I….

We never really buy -- we don't buy on the spot market if that's what you're asking..

No, no, no. What I meant is that obviously ethylene prices have come down quite a lot. And so, I would think there would be some kind of tailwind that you would experience at least in the beginning of the year..

Well, I think there are some areas where those molecules go into specialty products..

Yeah..

Right? And that creates in itself an opportunity for us. There are other areas where they go into conventional products where that formula and our customer base it’s kind of pass through, if that makes sense..

Sure..

So, the ethylene benefit, if it's going to roll to us as we go through this year, a chunk of it, we're going to say, don't see because our customers base business has a tie back to that molecule..

Okay. And then for my follow-up, I would think you've been seeing or might have a tough year this year.

When you sort of size what the equity contribution might be do you size it down 50% or 30% or some number like that, or do you not size it?.

Yeah. No, we do size that. Yeah, as you know, you've been seeing effectively the way that business works is basically its MTBE sale and MTBE has a reasonable correlation to crude. So we do expect and our partners expect that the net back to that venture is going to down. We've sized that in the range of $0.15 to $0.20 potentially.

And again, that would be a full year kind of perspective on it..

Jeff, another thing to keep in mind on that one is we're picking up their numbers on a quarter lag. So just bear that in mind..

Yes..

You'll start seeing it in second quarter or whatever is going on..

Yeah. All right. Thank you so much..

Right. Thank you, Jeff..

Thanks Jeff, and thanks everybody else on the call today. We'll be around for follow-ups later today. Have a great Friday..

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