<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995
[_] Transition report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period from __________ to __________
Commission File Number 33-13326
_____________
HOECHST CELANESE CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 13-5568434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1041 ROUTE 202-206
BRIDGEWATER, NEW JERSEY 08807
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 231-2000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ -------
All outstanding shares of Hoechst Celanese Corporation stock are owned by its
parent, Hoechst Corporation.
<PAGE>
TABLE OF CONTENTS
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PAGE
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PART I - FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets - June 30, 1995 and December 31, 1994........................... 3
Consolidated Statements of Earnings -
Three months and six months ended June 30, 1995 and 1994.................................. 4
Consolidated Statements of Cash Flows -
Six months ended June 30, 1995 and 1994.................................................. 5
Notes to Consolidated Financial Statements................................................. 6
Item 2 -Management's Discussion and Analysis of Financial Condition and Results of Operations....... 8
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings.......................................................................... 11
Item 6 - Exhibits and Reports on Form 8 - K......................................................... 12
NOTE : The Registrant is referred to in this 10-Q as the Company or Hoechst Celanese.
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS
HOECHST CELANESE CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
-------- ------------
1995 1994
---- ----
ASSETS (IN MILLIONS)
<S> <C> <C>
Current Assets:
Cash and cash equivalents.......................................................... $ 428 $ 170
Marketable securities.............................................................. 44 39
Net receivables.................................................................... 1,557 1,286
Inventories........................................................................ 960 901
Deferred income taxes.............................................................. 122 95
Prepaid expenses................................................................... 53 20
------- -------
Total current assets.......................................................... 3,164 2,511
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Investment in affiliates............................................................ 454 376
Property, plant and equipment....................................................... 4,589 4,504
Accumulated depreciation and amortization........................................... (1,809) (1,712)
------- -------
Net property, plant and equipment................................................... 2,780 2,792
Deferred income taxes............................................................... 68 75
Other assets........................................................................ 338 393
Excess of cost over fair value of net assets of businesses acquired, net............ 1,003 1,023
Net assets of discontinued operations held for distribution......................... 654 748
------- -------
Total assets..................................................................... $ 8,461 $ 7,918
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Commercial paper and current installments of long-term debt........................ $ 80 $ 36
Accounts payable and accrued liabilities .......................................... 1,448 1,267
Dividends payable to parent........................................................ - 60
Notes and accounts payable, parent and affiliates.................................. 586 593
Income taxes payable............................................................... 346 249
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Total current liabilities........................................................ 2,460 2,205
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Long-term debt...................................................................... 1,065 1,080
Minority interests.................................................................. 378 347
Other liabilities................................................................... 1,225 1,122
Stockholder's equity:
Common stock....................................................................... - -
Additional paid-in capital......................................................... 2,804 2,804
Retained earnings.................................................................. 583 409
Cumulative translation and other adjustments....................................... (54) (49)
------- -------
Total stockholder's equity....................................................... 3,333 3,164
------- -------
Total liabilities and stockholder's equity....................................... $ 8,461 $ 7,918
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
HOECHST CELANESE CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
1995 1994 1995 1994
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net sales............................................................... $2,100 $1,876 $4,057 $3,409
Cost of sales........................................................... 1,604 1,472 3,053 2,713
------ ------ ------ ------
Gross profit....................................................... 496 404 1,004 696
Selling, general and administrative expenses............................ 202 221 396 368
Research and development expenses....................................... 51 51 105 93
Special charge.......................................................... - 70 - 70
------ ------ ------ ------
Operating income................................................... 243 62 503 165
Equity in net earnings/(loss) of affiliates............................. 4 2 4 (1)
Interest expense........................................................ (22) (27) (43) (49)
Interest and other income, net.......................................... 58 7 68 11
------ ------ ------ ------
Earnings before income taxes and minority interests................ 283 44 532 126
Income taxes............................................................ 74 (73) 175 (44)
------ ------ ------ ------
Earnings before minority interests................................. 209 117 357 170
Minority interests...................................................... 82 24 128 36
------ ------ ------ ------
Earnings from continuing operations................................ 127 93 229 134
Loss from discontinued operations, net of taxes......................... (25) (37) (55) (66)
------ ------ ------ ------
Net earnings....................................................... $ 102 $ 56 $ 174 $ 68
====== ====== ====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
HOECHST CELANESE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------
1995 1994
---- ----
(IN MILLIONS)
<S> <C> <C>
Operating activities:
Earnings from continuing operations............................................................. $ 229 $ 134
Adjustments to reconcile earnings from continuing operations to net cash provided by operating
activities:
Depreciation and amortization............................................................... 242 222
Change in equity of affiliates.............................................................. (3) 5
Tax provision less taxes paid............................................................... 70 (140)
Changes in operating assets and liabilities:
Net receivables.......................................................................... (268) (34)
Inventories.............................................................................. (73) 34
Prepaid expenses......................................................................... (35) (22)
Accounts payable and accrued liabilities................................................. 210 212
Other, net............................................................................... 61 4
Net cash provided by (used in) operating activities of discontinued operations.................. 165 (201)
----- -----
Net cash provided by operating activities............................................. 598 214
----- -------
Investing activities:
Capital expenditures............................................................................ (270) (201)
Proceeds from sale of marketable securities..................................................... 15 41
Proceeds from sale of businesses and assets..................................................... 4 -
Purchases of marketable securities.............................................................. (18) (41)
Net cash used in investing activities of discontinued operations................................ (17) (3)
----- -------
Net cash used in investing activities................................................. (286) (204)
----- -------
Financing activities:
Proceeds from long-term debt.................................................................... - 448
Proceeds from short-term borrowings............................................................. 624 2,276
Payments on long-term debt...................................................................... (15) (272)
Payments on short-term borrowings............................................................... (579) (2,369)
Dividends paid.................................................................................. (60) (70)
----- -------
Net cash (used in) provided by financing activities................................... (30) 13
----- -------
Exchange rate changes on cash.................................................................... (24) (18)
Net increase in cash and cash equivalents................................................... 258 5
Cash and cash equivalents at beginning of period................................................. 170 167
----- -------
Cash and cash equivalents at end of period....................................................... $ 428 $ 172
===== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for: Interest, net of amounts capitalized............................ $ 50 $ 78
Income taxes.................................................... 102 101
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
HOECHST CELANESE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
Hoechst Celanese Corporation (the "Company") is wholly owned by Hoechst
Corporation ("Parent"), a holding company, itself a wholly owned subsidiary of
Hoechst Aktiengesellschaft ("Hoechst AG").
The consolidated financial statements are unaudited and subject to year-end
audit and adjustments. In the opinion of management, the financial statements
include all adjustments (consisting only of normal accruals) which are necessary
to present fairly the results for the interim periods reported. Results for the
three month and six month periods ended June 30, 1995 are not necessarily
indicative of the results that will be realized for the full year. All
significant intercompany balances and transactions have been eliminated in
consolidation. The consolidated financial statements include the accounts of the
Company, its majority-owned subsidiaries, joint ventures and partnerships.
(2) DISCONTINUED OPERATIONS
On July 18, 1995, Hoechst Corporation, the Company's parent, completed the
acquisition of Marion Merrell Dow Inc. ("MMD"). In line with Hoechst AG's
worldwide strategy, the pharmaceutical operations in North America will be
realigned under Hoechst Corporation. Accordingly, the Company's management
approved a formal plan to transfer its interests in Copley Pharmaceutical Inc.
and Hoechst Roussel Pharmaceuticals Inc. to its Parent or the subsidiaries of
its Parent. The Company has reflected the operating results of these businesses
as discontinued operations in the accompanying consolidated financial
statements. The transfer of the carrying value of the net assets of these
businesses will be made effective July 1, 1995. Accordingly, the Company will be
reimbursed by it's Parent for any costs, including operating losses, the Company
might incur associated with the strategic realignment of the pharmaceutical
operations. Beginning this quarter, the Company will eliminate its "Life
Sciences" segment. The other businesses formerly reported under "Life Sciences",
Animal Health, Crop Protection and Bulk Pharmaceuticals, will be included in the
Specialties and Advanced Materials segment.
The 1994 consolidated financial statements have been restated to conform to
the 1995 presentation. The combined net sales of the pharmaceutical business
for the three- and six-month periods ended June 30, 1995 and 1994 were $ 119
million, $ 215 million and $ 101 million, $179 million, respectively.
6
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(3) INVENTORIES
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
--------------- ------------------
(IN MILLIONS)
<S> <C> <C>
Finished goods............................................... $ 747 $ 673
Work-in-process.............................................. 98 90
Raw materials and supplies................................... 205 213
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Subtotal................................................. 1,050 976
Excess of current costs over stated values................... (90) (75)
------ -----
Total inventories........................................ $ 960 $ 901
====== =====
</TABLE>
(4) COMMITMENTS AND CONTINGENCIES
The Company is a defendant in a number of lawsuits, including product
liability and personal injury actions. Certain of these lawsuits purport to be,
or have been preliminarily certified as, class actions. In some of these
lawsuits, claimed damages are substantial. While it is impossible at this time
to determine with certainty the ultimate outcome of the lawsuits, management
believes, based on the advice of counsel, that adequate provisions have been
made for probable losses with respect thereto and that the ultimate outcome will
not have a material adverse effect on the consolidated financial position, or
results of operations of the Company.
The Company and Shell Oil Company ("Shell") agreed to settle a nationwide
class action in Tennessee state court that would provide replumbings, and
payments for certain damages, to qualifying homeowners with leaking polybutylene
plumbing systems throughout the United States. The Tennessee state court gave
preliminary approval to the settlement which would commit the two participating
companies to spend up to $850 million for claims over a multi-year period. The
settlement is subject to additional court approval. The final sharing allocation
with Shell will be determined at a later date.
7
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FIANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
On July 18, 1995, Hoechst Corporation, the Company's parent, completed the
acquisition of Marion Merrell Dow Inc. ("MMD"). In line with the worldwide
strategy of Hoechst Aktiengesellschaft, ("Hoechst AG"), the pharmaceutical
operations in North America will be realigned under Hoechst Corporation.
Accordingly, the Company's management approved a formal plan to transfer its
interest in Copley Pharmaceutical Inc. and Hoechst Roussel Pharmaceuticals Inc.
to its Parent or the subsidiaries of its Parent. The Company has reflected the
operating results of these businesses as discontinued operations in the
accompanying consolidated financial statements. The transfer of the carrying
value of the net assets of these businesses will be made effective July 1, 1995.
Accordingly, the Company will be reimbursed by it's Parent for any costs,
including operating losses, the Company might incur associated with the
strategic realignment of the pharmaceutical operations. Beginning this quarter,
the Company will eliminate its "Life Sciences" segment. The other businesses
formerly reported under "Life Sciences", Animal Health, Crop Protection and Bulk
Pharmaceuticals, will be included in the Specialties and Advanced Materials
segment.
Sales for the first six months of 1995 increased by 19% to $4,057 million
from $3,409 million for the comparable 1994 period, and sales for the second
quarter of 1995 increased by 12% to $2,100 million from $1,876 million in 1994.
The most marked sales improvements were realized in the Chemicals and Fibers and
Film segments. The Chemicals segment sales improved for both the second quarter
and six-months with all product lines showing favorability over the prior
periods with the most notable improvement in methanol. Sales increased as a
result of acetic acid and vinyl acetate monomer and acrylate volumes and
favorable pricing improvements due to strong market demand. The Fibers and
Film segment experienced sales growth over the comparable 1994 periods. In
Textile Fibers, polyester staple sales volume rose due to the continuing strong
demand for manufactured fiber in cotton blends and pricing increases to cover
higher raw material costs. This improvement more than offset volume decreases
in acetate filament caused by the continued softness in the overall women's wear
market. The Technical Fibers group experienced sales growth for both the
second quarter and six months due to filter products volumes, particularly to
the Far East, and improved spunbond volumes in the geotextile market as a result
of increased construction activity. Polyester Resins and Films sales increased
for both the second quarter and six months as a result of strong demand for
polyester film in the industrial and reprographic markets as well as continued
high demand in polyester resins. The Specialties and Advanced Materials segment
showed sales improvements for the six months but experienced a decline in sales
for the second quarter as sales gains in Advanced Materials were not enough to
offset the decline in Specialty Chemicals' sales and the 1994 effect of
consolidating the AgrEvo joint venture. In Advanced Materials, overall sales
improvements versus the comparable periods of 1994 resulted from favorable sales
volumes across most product lines for both periods largely resulting from
continued strong domestic and export demand, further commercialization of
products and the benefit of a strong economy. Specialty Chemicals experienced a
downturn in sales for the second quarter but improved for the six months. For
the three-month period, the decline stemmed primarily from price volume declines
in dyes and superabsorbants resulting from intense competition, and reduced
volumes resulting from the sale of a product line in separations. These
declines were too large to be countered by the improved domestic volumes in
surfactants, fine chemicals and bulk pharmaceuticals and intermediates. For the
six-month period, improvements in animal health resulting from volume increases
in growth promotants for cattle and the introduction of new crop protection
products were more than enough to offset declines in dyes and separation
products.
Selling, general and administrative expenses ("SG&A") increased by $28
million for the six-month period and decreased $19 million for the second
quarter over the comparable 1994 time frames. The increase for the six months
resulted from higher personnel related costs associated with higher profit
sharing and inflationary increases.
8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Research and development expenses remained flat for the three-month period and
increased by $12 million for the six months. This increase was primarily in the
Advanced Technology segment.
Operating income for the six-month period of $503 million was $338 million
greater than the prior year. Operating income for the second quarter increased
by $181 million to $243 million. Both periods improved over the comparable 1994
periods resulting from a 1994 second quarter charge of $70 million, net of
estimated insurance recoveries, related to product liability claims (Refer to
December 31, 1994 Form 10-K, Part II, Item 7.) as well as improvements in all
operating segments. In the Chemicals segment, the significant increase in sales
for both periods had resulted from increased volumes and pricing, particularly
in methanol, which more than offset the higher raw material costs in ethylene
and propylene. Improvements in the Fibers and Film segment over prior year
periods were led by Textile Fibers and Polyester Resins and Films. In Textile
Fibers, operating income improved for both the three- and six-month periods as
decreased demand for acetate filament along with increased raw material costs
were offset by the favorable sales impact of the staple pricing and volume
improvements. Although the cost of raw materials increased, higher filter
product sales volumes for Technical Fibers resulted in increased operating
income over the same periods last year. This is mainly a timing issue for the
tow shipments. The operating income for Polyester Resins and Films improved over
the prior quarter and six months due to higher sales volumes in polyester film
and polyester resins which were partially offset by increased raw material
prices for major raw materials. In the Specialties and Advanced Materials
segment, Advanced Materials strong volumes caused by increasing demand in most
product lines improved operating income over the comparable 1994 periods.
Specialty Chemicals' operating income declined for both periods as the result of
higher material and manufacturing costs in surfactants, superabsorbants and
specialty and paper chemicals, as well as price and volume declines for dyes and
superabsorbants which more than offset the improvements in crop protection and
animal health as the result of their introduction of new products.
Equity in net earnings (loss) of affiliates improved for both periods due
to increased earnings in a 45% owned affiliate, which sells copolymer and resins
resulting from improved sales and the effect of the weakening of the U.S. dollar
against the Japanese yen.
The effective tax rate decreased for the six-month and second quarter from
the comparable 1994 periods. The decrease is primarily attributable to Non-U.S.
earnings taxed at lower rates representing a larger proportion of total
earnings.
As a result of the significant devaluation of the Mexican New Peso in
December of 1994, the equity section of the Company was negatively impacted for
the six month period ending June 30, 1995 by approximately $40 million due to
the translation effect of the Company's 40% ownership of Grupo Celanese, S.A.
(formerly Celanese Mexicana, S.A.). The Company is uncertain about the
potential unfavorable impact of future fluctuations of the Mexican peso.
The Company and Shell Oil Company ("Shell") agreed to settle a nationwide
class action in Tennessee state court that would provide replumbings, and
payments for certain damages, to qualifying homeowners with leaking polybutylene
plumbing systems throughout the United States. The Tennessee state court gave
preliminary approval to the settlement which would commit the two participating
companies to spend up to $850 million for claims over a multi-year period. The
settlement is subject to additional court approval. The final sharing allocation
with Shell will be determined at a later date. (Refer to Part II Item I of this
quarterly report.)
9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the second quarter and six
months of 1995 was 10.0 and 9.9, respectively, compared to 2.1 and 2.9 for the
1994 periods. The increase for both periods was due to the strong earnings from
continuing operations, driven by higher sales volumes. For purposes of
calculating the ratio of earnings to fixed charges, earnings consist of earnings
from operations before fixed charges, minority interests, income taxes and loss
from discontinued operations. Fixed charges consist of interest and debt
expense, capitalized interest and the estimated interest portion of rents under
operating leases.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $428 million on June 30, 1995, an increase
of $258 million from December 31, 1994. The increase primarily resulted from net
cash provided by operations of $598 million, partially offset by $270 million
expenditures for capital projects, and financing activities of $ 30 million.
For the six month period ended June 30, 1995, the Company borrowed $462
million and repaid $462 under its commercial paper program and its revolving
credit agreement with its Parent. There were no outstanding balances under the
Company's commercial paper program or its revolving credit agreement at June 30,
1995.
The Company had an aggregate $175 million outstanding of its medium-term
notes as of June 30, 1995. The Company may sell from time to time up to an
additional $250 million of such notes. The proceeds of any medium-term notes to
be sold will be used for general corporate purposes.
The Company expects that its capital expenditures, investments and working
capital requirements will continue to be met primarily from internally generated
funds from operations. However, the Company may, due to the timing of funding
requirements or investments, supplement its liquidity from external or
affiliated sources. Such sources include the Company's medium-term note shelf
registration, its commercial paper program or loans from its Parent or Hoechst
AG and affiliates.
10
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Regarding the Plumbing Actions against the Company described in Part I,
Item 3 of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (the "Company's 1994 Annual Report"), the Company is now a
named defendant in forty-four putative class actions, six of which have been
certified as class actions, as well as a defendant in other non-class actions
filed in twelve states. In these Plumbing Actions the plaintiffs typically seek
recovery for alleged property damages, and, in certain cases, additional damages
under the Texas Deceptive Trade Practices Act. The other defendants include
United States Brass Corporation ("U.S. Brass"), Vanguard Plastics, Inc.
("Vanguard"), Shell Oil Company ("Shell") and E. I. duPont deNemours & Co., Inc.
("duPont"). Damage amounts are not specified. The plumbing systems were designed
and manufactured primarily by U.S. Brass and Vanguard. The pipe was made from
polybutylene resin supplied by Shell. The Company sold acetal copolymer resin
and duPont sold acetal homopolymer resin to other companies who manufactured the
fittings used in the plumbing systems. The class actions and the purported class
actions are in the Superior Court of California, Santa Cruz County (one case),
the Circuit Court of the Fifth Judicial Circuit, Florida, Marion County (one
case), the Circuit Court of the Eleventh Judicial Circuit, Florida, Dade County
(one case) the Superior Court of Georgia, Fulton County (two cases), the
Superior Court of Indiana, Marion County (one case), the District Court of Iowa,
Polk County (one case), the 18th Judicial District of Louisiana, Iberville
Parish (one case), the Civil District Court of Louisiana, Orleans Parish (one
case), the Circuit Court of Michigan, Wayne County (one case), the Court of
Common Pleas of Ohio, Montgomery County (one case), the Circuit Court of Oregon,
Multnomah County (one case), the Court of Common Pleas of Pennsylvania (1st
Judicial District ), Philadelphia County (one case), the Court of Common Pleas
of South Carolina, Beaufort County (one case), the Court of Common Pleas of
South Carolina, Charleston County (one case), the Chancery Court for Tennessee,
Obion County (one case), the Circuit Court of Wisconsin, Milwaukee County (one
case), as well as the courts listed in the Company's 1994 Annual Report.
The Company has objected to and/or is appealing the certification orders in
the six certified state court class actions. Most recently, on August 3, 1995,
the Company filed an appeal of the June 30, 1995 order of the Alabama state
court (Circuit Court, Green County) certifying a nationwide trial class against
the Company and Shell in the Alabama state court class action. In that same
action, duPont reached a settlement with plaintiffs and the Alabama state court
preliminarily approved a nationwide settlement class against duPont.
On July 31, 1995, the Company together with Shell agreed to and announced a
settlement with plaintiffs of the nationwide class action pending in Tennessee
state court, which settlement provides replumbings, and payments for certain
damages, to qualifying homeowners with leaking polybutylene plumbing systems
throughout the United States. The Tennessee state court has granted preliminary
approval to the settlement, and notice of it has been disseminated to purported
class members around the country. The settlement requires the two participating
companies to commit to spend up to $850 million for claims over a multi-year
period which the Company estimates will end in 2003. The settlement also
provides an assignment (or, in some instances, a partial assignment) to the two
participating companies of plaintiffs' claims against all other persons
(including duPont) relating to the subject matter of the settlement. The
settlement is subject to additional court approval. Shell and the Company have
also entered into settlement agreements subject to, among other things,
additional court approval in two of the pending California class actions which
cover homes in San Diego County. The agreements provide for the repair of
leaking plumbing systems.
The Company is not liable for any alleged defects in such systems which
were designed, manufactured and marketed by other companies. Nonetheless, the
Company has agreed to participate in the proposed settlements described above to
reduce litigation expenses and to provide relief to qualifying homeowners with
polybutylene plumbing problems.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8 -K
(A) NONE REQUIRED.
(B) FORM 8-K
During the quarter ended June 30, 1995, no reports on Form 8-K were filed.
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this form 10-Q has been signed on behalf of the Registrant by its Chief
Accounting Officer who is authorized to sign on behalf of the Registrant.
Hoechst Celanese Corporation
/s/R. W. Smedley
Vice President and Controller
August 14, 1995
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 428
<SECURITIES> 44
<RECEIVABLES> 1,557
<ALLOWANCES> (42)
<INVENTORY> 960
<CURRENT-ASSETS> 3,164
<PP&E> 4,589
<DEPRECIATION> (1,809)
<TOTAL-ASSETS> 8,461
<CURRENT-LIABILITIES> 2,460
<BONDS> 1,065
<COMMON> 0
0
0
<OTHER-SE> 3,333
<TOTAL-LIABILITY-AND-EQUITY> 8,461
<SALES> 4,057
<TOTAL-REVENUES> 4,057
<CGS> 3,053
<TOTAL-COSTS> 501
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<LOSS-PROVISION> 11
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<INCOME-TAX> 175
<INCOME-CONTINUING> 229
<DISCONTINUED> (55)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174
<EPS-PRIMARY> 0
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