UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

333-122587-18
(Commission File Number)

CELANESE HOLDINGS LLC
(Exact Name of Registrant as Specified in its Charter)


Delaware				87-0723277
(State or Other Jurisdiction of Incorporation or Organization)				(I.R.S. Employer Identification No.)
1601 West LBJ Freeway, Dallas, TX				75234-6034
(Address of Principal Executive Offices)				(Zip Code)
(972) 443-4000
(Registrant's telephone number, including area code)

Celanese Holdings LLC meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

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 No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of the date of this Quarterly Report on Form 10-Q, Celanese Holdings LLC has one membership interest outstanding which is owned by Crystal US Holdings 3 L.L.C., a Delaware limited liability company.

Exhibit index located on sequential page number 2.

CELANESE HOLDINGS LLC
Form 10-Q
For the Quarterly Period Ended March 31, 2005

TABLE OF CONTENTS

Page

Basis of Presentation

Market Industry and Data Forecasts

Special Note Regarding Forward-Looking Statements

Part I

Financial Information

Item 1.

Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition
and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

Part II

Other Information

Item 1.

Legal Proceedings

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Submission of Matters to a Vote of Security Holders

Item 5.

Other Information

Item 6.

Exhibits

Signatures

Basis of Presentation

In this Quarterly Report on Form 10-Q, the term "Celanese Holdings" refers to Celanese Holdings LLC, a Delaware limited liability company, and not its subsidiaries. The terms the "Company," "we," "our" and "us" refer to Celanese Holdings and its subsidiaries on a consolidated basis. The term "BCP Crystal" refers to our subsidiary BCP Crystal US Holdings Corp., and not its subsidiaries. The term "Purchaser" refers to our subsidiary, Celanese Europe Holding GmbH & Co. KG, formerly known as BCP Crystal Acquisition GmbH & Co. KG, a German limited partnership (Kommanditgesellschaft, KG), and not its subsidiaries, except where otherwise indicated. The term "Original Shareholders" refers, collectively, to Blackstone Capital Partners (Cayman) Ltd. 1, Blackstone Capital Partners (Cayman) Ltd. 2, Blackstone Capital Partners (Cayman) Ltd. 3 and BA Capital Investors Sidecar Fund, L.P. The terms "Sponsor" and "Advisor" refer to certain affiliates of The Blackstone Group.

Celanese Holdings is a recently-formed company which does not have any independent external operations other than through the indirect ownership of CAG (as defined below) and CAC (as defined below), their consolidated subsidiaries, their non-consolidated subsidiaries, ventures and other investments. For accounting purposes, Celanese Holdings and its consolidated subsidiaries are referred to as the "Successor." See Note 1 to the Unaudited Interim Consolidated Financial Statements (as defined below) for additional information on the basis of presentation of the Successor.

Pursuant to a voluntary tender offer commenced in February 2004 (the "Tender Offer"), the Purchaser, an indirect wholly-owned subsidiary of Celanese Holdings, in April 2004 acquired approximately 84% of the ordinary shares of CAG (the "CAG Shares") outstanding. All references in this Quarterly Report to the outstanding ordinary shares of CAG exclude treasury shares. As of March 31, 2005, Celanese Holdings' indirect ownership of approximately 84% of the outstanding CAG Shares would equate to approximately 77% of the issued CAG Shares (including treasury shares). Pursuant to a mandatory offer commenced in September 2004 and continuing as of the date of this Quarterly Report, the Purchaser has acquired additional CAG Shares. As a result of these acquisitions, partially offset by the issuance of additional shares of CAG as a result of the exercise of options issued under a CAG stock option plan, as of March 31, 2005, we continue to own approximately 84% of the outstanding CAG Shares.

In October 2004, Celanese Corporation, a Delaware Corporation ("Celanese Corporation") and the ultimate parent of Celanese Holdings and certain of its subsidiaries completed an organizational restructuring (the "Restructuring") pursuant to which the Purchaser effected, by giving a corresponding instruction under the Domination Agreement (as defined below), the transfer of all of the shares of Celanese Americas Corporation ("CAC") from Celanese Holding GmbH, a wholly owned subsidiary of CAG, to BCP Caylux Holdings Luxembourg S.C.A. ("BCP Caylux") owning 100% of the equity of CAC and indirectly, all of its assets, including subsidiary stock. Thereafter, BCP Caylux transferred certain assets, including its equity ownership interest in CAC to BCP Crystal. In this Quarterly Report, the term "Domination Agreement" refers to the domination and profit and loss transfer agreement between CAG and the Purchaser, pursuant to which the Purchaser became obligated on October 1, 2004 to offer to acquire all outstanding CAG Shares from the minority shareholders of CAG in return for payment of fair cash compensation in accordance with German law.

Celanese AG is incorporated as a stock corporation (Aktiengesellschaft, AG) organized under the laws of the Federal Republic of Germany. As used in this document, the term "CAG" refers to (i) prior to the Restructuring, Celanese AG and CAC, their consolidated subsidiaries, their non-consolidated subsidiaries, ventures and other investments, and (ii) following the Restructuring, Celanese AG, its consolidated subsidiaries, its non-consolidated subsidiaries, ventures and other investments, except that with respect to shareholder and similar matters where the context indicates, "CAG" refers to Celanese AG. For accounting purposes, "Predecessor" refers to CAG and its subsidiaries.

Following the transfer of CAC to BCP Crystal, (1) BCP Crystal Holdings Ltd. 2 contributed substantially all of its assets and liabilities (including all outstanding capital stock of BCP Caylux) to BCP Crystal and (2) BCP Crystal assumed certain obligations of BCP Caylux, including all rights and obligations of BCP Caylux under the senior credit facilities, the floating rate term loan and the notes. BCP Crystal Holdings Ltd. 2 reorganized as a Delaware limited liability company and changed its name to Celanese Holdings LLC. Blackstone Crystal Holdings Capital Partners (Cayman) IV Ltd. reorganized as a Delaware corporation and changed its name to Celanese Corporation. BCP Crystal, at its discretion, may subsequently cause the liquidation of BCP Caylux.

As a result of these transactions, Celanese Holdings holds indirectly, and BCP Crystal holds directly, 100% of CAC's equity and, indirectly, all equity owned by CAC in its subsidiaries. In addition, Celanese Holdings and BCP Crystal hold, indirectly, all of the outstanding common stock of CAG held by the Purchaser and all of the wholly owned subsidiaries of Celanese Holdings that guarantee BCP Caylux's obligations under the senior credit facilities and guarantee the senior subordinated notes issued on June 8, 2004 and July 1, 2004 on an unsecured senior subordinated basis. See Notes 3 and 9 to the Unaudited Interim Consolidated Financial Statements (as defined below).

The unaudited interim consolidated financial statements of the Successor for the three months ended March 31, 2005, and the unaudited interim consolidated financial statements of the Predecessor for the three months ended March 31, 2004 contained in this Quarterly Report (collectively, the "Unaudited Interim Consolidated Financial Statements") were prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for all periods presented. The Unaudited Interim Consolidated Financial Statements and other financial information included in this Quarterly Report, unless otherwise specified, have been presented to separately show the effects of discontinued operations. The results of the Successor are not comparable to the results of the Predecessor due to the differences in the basis of presentation of purchase accounting as compared to historical cost.

CAG is a foreign private issuer and previously filed its consolidated financial statements as of December 31, 2003 and 2002 in its Annual Report on Form 20-F. CAG changed its fiscal year end to September 30 and filed its consolidated financial statements as of September 30, 2004 and for the nine months then ended in its 2004 Annual Report on Form 20-F. In accordance with German law, the reporting currency of the CAG consolidated financial statements is the euro. As a result of the Purchaser's acquisition of voting control of CAG, the financial statements of CAG contained in this document are reported in U.S. dollars to be consistent with our reporting requirements. For CAG's reporting requirements, the euro continues to be the reporting currency.

In the preparation of other information included in this document, euro amounts have been translated into U.S. dollars at the applicable historical rate in effect on the date of the relevant event or period. For purposes of prospective information, euro amounts have been translated into U.S. dollars using the rate in effect on March 31, 2005. Our inclusion of this information is not meant to suggest that the euro amounts actually represent such dollar amounts or that such amounts could have been converted into U.S. dollars at any particular rate, if at all.

Market Industry and Data Forecasts

This document includes industry data and forecasts that Celanese Holdings has prepared based, in part, upon industry data and forecasts obtained from industry publications and surveys and internal company surveys. Third-party industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable.

AO Plus™, BuyTiconaDirect™, CelActiv^®, Celanex^®, Celcon^®, Celstran^®, Celvolit^®, Compel^®, GUR^®, Hoecat^®, Hostaform^®, Impet^®, Impet-HI^®, Mowilith^®, Nutrinova^® DHA, Riteflex^®, Sunett^®, Topas^®, Vandar^®, VAntage™, Vectra^®, Vectran^®, Vinamul^®, Elite^®, Duroset^® and certain other products and services that may be named in this document are registered trademarks and service marks of CAG. Fortron^® is a registered trademark of Fortron Industries, a venture of the Company.

Special Note Regarding Forward-Looking Statements

Investors are cautioned that the forward-looking statements contained in this Quarterly Report involve both risk and uncertainty. Many important factors could cause actual results to differ materially from those anticipated by these statements. Many of these factors are macroeconomic in nature and are, therefore, beyond our control. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Statements May Prove Inaccurate."

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

INDEX TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS


	PAGE
CELANESE HOLDINGS LLC UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Consolidated Statements of Operations for the three months ended March 31, 2005 and 2004		7
Unaudited Consolidated Balance Sheets as of March 31, 2005 and December 31, 2004		8
Unaudited Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2005 and 2004		9
Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2005 and 2004		10
Notes to the Unaudited Interim Consolidated Financial Statements		11

CELANESE HOLDINGS LLC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


	Successor			Predecessor
	Three Months Ended March 31, 2005			Three Months Ended March 31, 2004
	(in $ millions)
Net sales		1,509			1,243
Cost of sales		(1,125	)		(1,002	)
Selling, general and administrative expenses		(158	)		(137	)
Research and development expenses		(23	)		(23	)
Special charges:
Restructuring, impairment and other special charges		(38	)		(28	)
Foreign exchange gain (loss), net		3			—
Gain (loss) on disposition of assets.		1			(1	)
Operating profit		169			52
Equity in net earnings of affiliates.		15			12
Interest expense		(140	)		(6	)
Interest income		10			5
Other income (expense), net .		3			9
Earnings from continuing operations before tax and minority interests		57			72
Income tax provision		(17	)		(17	)
Earnings from continuing operations before minority interests		40			55
Minority interests		(25	)		—
Earnings from continuing operations		15			55
Earnings from discontinued operations:
Loss from operation of discontinued operations .		—			(5	)
Gain on disposal of discontinued operations.		—			14
Income tax benefit		—			14
Earnings from discontinued operations		—			23
Net earnings		15			78

See the accompanying notes to the unaudited interim consolidated financial statements.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS


	As of March 31, 2005			As of December 31, 2004
	(in $ millions)
ASSETS
Current assets:
Cash and cash equivalents		1,510			838
Receivables
Trade receivables, net — third party and affiliates, net of allowance for doubtful accounts of $22 million as of March 31, 2005 and December 31, 2004:		998			866
Other receivables		555			678
Inventories		641			618
Deferred income taxes		75			71
Other assets		113			86
Assets of discontinued operations		3			2
Total current assets		3,895			3,159
Investments		567			600
Property, plant and equipment, net of accumulated depreciation of $536 million and $446 million as of March 31, 2005 and December 31, 2004, respectively		1,839			1,702
Deferred income taxes		48			54
Other assets		645			739
Goodwill		779			747
Intangible assets, net		396			400
Total assets		8,169			7,401
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current installments of long-term debt — third party and affiliates		139			144
Accounts payable and accrued liabilities:
Trade payables — third party and affiliates		777			722
Other current liabilities		807			888
Deferred income taxes		25			20
Income taxes payable		238			214
Liabilities of discontinued operations		8			7
Total current liabilities		1,994			1,995
Long-term debt		2,949			2,716
Deferred income taxes		230			256
Benefit obligations		987			1,000
Other liabilities		493			510
Minority interests		533			518
Commitments and contingencies
Shareholders' equity:
One share issued and outstanding as of March 31, 2005 and December 31, 2004		—			—
Additional paid-in capital		1,410			837
Retained earnings (deficit)		(172	)		(187	)
Loan to Shareholder		(227	)		(227	)
Accumulated other comprehensive income (loss), net		(28	)		(17	)
Total shareholders' equity		983			406
Total liabilities and shareholders' equity		8,169			7,401

See the accompanying notes to the unaudited interim consolidated financial statements.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


	Common Stock		Additional Paid-in Capital		Retained Earnings (Deficit)			Accumulated Other Comprehensive Income (Loss), Net			Loan to Shareholder			Treasury Stock			Total Shareholders' Equity
	(in $ millions)
Predecessor
Balance at December 31, 2003		150		2,714		25			(198	)		—			(109	)		2,582
Comprehensive income (loss), net of tax:
Net earnings		—		—		78			—			—			—			78
Other comprehensive income (loss):
Unrealized gain on securities ⁽¹⁾		—		—		—			7			—			—			7
Foreign currency translation		—		—		—			(46	)		—			—			(46	)
Other comprehensive income (loss)		—		—		—			(39	)		—			—			(39	)
Comprehensive income		—		—		—			—			—			—			39
Amortization of deferred compensation.		—		1		—			—			—			—			1
Balance at March 31, 2004		150		2,715		103			(237	)		—			(109	)		2,622

Successor
Balance at December 31, 2004 .		—		837		(187	)		(17	)		(227	)		—			406
Comprehensive income (loss), net of tax:
Net income		—		—		15			—			—			—			15
Other comprehensive income (loss):
Foreign currency translation		—		—		—			(9	)		—			—			(9	)
Unrealized loss on derivative contracts		—		—		—			(2	)		—			—			(2	)
Other comprehensive income (loss)		—		—		—			(11	)		—			—			(11	)
Comprehensive income		—		—		—			—			—			—			4
Indemnification of demerger liability		—		1		—			—			—			—			1
Contribution from Parent		—		572		—			—			—			—			572
Balance at March 31, 2005		—		1,410		(172	)		(28	)		(227	)		—			983


(1)	Net of tax expense of $2 million for the three months ended March 31, 2004.

See the accompanying notes to the unaudited interim consolidated financial statements.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Successor			Predecessor
	Three Months Ended March 31, 2005			Three Months Ended March 31, 2004
	(in $ millions)
Operating activities from continuing operations:
Net earnings		15			78
(Earnings) loss from discontinued operations, net		—			(23	)
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Special charges, net of amounts used		(10	)		20
Stock based compensation		—			2
Depreciation		47			69
Amortization of intangibles		16			3
Amortization of deferred financing fees		26			—
Premium on early redemption of debt		55			—
Change in equity of affiliates		21			3
Deferred income taxes		(15	)		(12	)
(Gain) on disposition of assets, net		(1	)		—
Loss (Gain) on foreign currency, net		—			(26	)
Minority interest		25			—
Changes in operating assets and liabilities:
Trade receivables, net — third party and affiliates		(125	)		(89	)
Other receivables		33			(42	)
Prepaid expenses		(27	)		14
Inventories		(8	)		(11	)
Trade payables — third party and affiliates		43			(6	)
Benefit obligations and other liabilities		(86	)		(118	)
Income taxes payable		36			38
Other, net		(13	)		(7	)
Net cash provided by (used in) operating activities		32			(107	)
Investing activities from continuing operations:
Capital expenditures on property, plant and equipment		(40	)		(44	)
Acquisition of CAG shares		(2	)		—
Fees associated with acquisition of Vinamul .		(7	)		—
Acquisition of Vinamul		(208	)		—
Net proceeds from disposal of discontinued operations		75			139
Proceeds from sale of marketable securities		104			42
Purchases of marketable securities		(27	)		(42	)
Other, net		—			1
Net cash provided by (used in) investing activities		(105	)		96
Financing activities from continuing operations:
Contribution from Parent, net		572			—
Redemption of senior subordinated notes, including related premium		(572	)		—
Borrowings under term loan facility		1,135			—
Fees associated with financing		(7	)		—
Repayment of floating rate term loan, including related premium		(354	)		—
Short-term borrowings (repayments), net		(10	)		(16	)
Proceeds from other long-term debt		6			—
Payments of other long-term debt		(3	)		(27	)
Net cash provided by (used in) financing activities		767			(43	)
Exchange rate effects on cash .		(22	)		(1	)
Net increase (decrease) in cash and cash equivalents .		672			(55	)
Cash and cash equivalents at beginning of period		838			148
Cash and cash equivalents at end of period		1,510			93
Net cash provided by (used in) discontinued operations:
Operating activities		(75	)		(139	)
Investing activities		75			139
Financing activities		—			—
Net cash provided by (used in) discontinued operations		—			—

See the accompanying notes to the unaudited interim consolidated financial statements.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. Description of the Company and Basis of Presentation

Description of the Company

Celanese Holdings LLC ("Celanese Holdings") and its subsidiaries (collectively the "Company" or the "Successor") is a global industrial chemicals company, primarily comprising the former business of Celanese AG and its subsidiaries ("CAG" or the "Predecessor"). The Company's business involves processing chemical raw materials, such as ethylene and propylene, and natural products, including natural gas and wood pulp, into value-added chemicals and chemical-based products.

Basis of Presentation

The results of operations and cash flows and related disclosures for periods prior to April 1, 2004 (a convenience date for the April 6, 2004 acquisition date), the effective date of the acquisition of CAG (the "Effective Date"), are presented as those of the Predecessor. The financial position, results of operations and cash flows and related disclosures subsequent to the Effective Date, are presented as those of the Successor.

The unaudited interim consolidated financial statements of the Successor as of and for the three months ended March 31, 2005 and as of December 31, 2004 reflect the acquisition of CAG under the purchase method of accounting in accordance with Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations.

In the opinion of management, the unaudited interim consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows of the Company and the Predecessor. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission ("SEC"). These unaudited interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements as of and for the nine months ended December 31, 2004, as filed with the SEC on Form 10-K.

Operating results for the three months ended March 31, 2005 and March 31, 2004 are not necessarily indicative of the results to be expected for the entire year. The results of the Successor are not comparable to the results of the Predecessor due to the difference in the basis of presentation of purchase accounting as compared to historical cost.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues, expenses and allocated charges during the reporting period. The more significant estimates pertain to purchase accounting, allowance for doubtful accounts, inventory allowances, impairments of intangible assets and other long-lived assets, restructuring costs and other special charges, income taxes, pension and other postretirement benefits, asset retirement obligations, environmental liabilities and loss contingencies, among others. Actual results could differ from those estimates.

The Company has reclassified certain prior period amounts to conform to the current period's presentation.

2. Acquisition of Celanese AG (the "Acquisition")

On April 6, 2004, Celanese Europe Holding GmbH & Co. KG (the "Purchaser"), an indirect wholly owned subsidiary of the Successor, acquired approximately 84% of the Celanese AG ordinary shares, excluding treasury shares ("CAG Shares"). The CAG Shares were acquired at a price of

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

€32.50 per share or an aggregate purchase price of $1,693 million, including direct acquisition costs of approximately $69 million. During the nine months ended December 31, 2004 and the three months ended March 31, 2005, the Purchaser acquired additional CAG Shares for a purchase price of $33 million and $2 million, respectively. As of March 31, 2005 and December 31, 2004, the Purchaser's ownership percentage remained at approximately 84%.

Pro forma information

The following pro forma information for the three months ended March 31, 2004 was prepared as if the Acquisition had occurred as of the beginning of such period:


	Three Months Ended March 31, 2004
	(in $ millions)
Net sales		1,243
Operating profit		82
Net earnings		41

Pro forma adjustments include adjustments for (1) purchase accounting, including (i) the application of purchase accounting to pension and other postretirement obligations (ii) the application of purchase accounting to property, plant and equipment and intangible assets, (2) adjustments for items directly related to the transaction, including (i) the impact of the additional pension contribution, (ii) fees incurred by the Company related to the Acquisition, and (iii) adjustments to interest expense to reflect the Company's new capital structure, and (3) corresponding adjustments to income tax expense.

The pro forma information is not necessarily indicative of the results that would have occurred had the Acquisition occurred as of the beginning of the period presented, nor is it necessarily indicative of future results.

3. Domination Agreement and Organizational Restructuring

Domination Agreement

On October 1, 2004, a domination and profit and loss transfer agreement (the "Domination Agreement") between Celanese AG and the Purchaser became operative. When the Domination Agreement became operative, the Purchaser became obligated to offer to acquire all outstanding CAG Shares from the minority shareholders of Celanese AG in return for payment of fair cash compensation. The amount of this fair cash compensation has been determined to be €41.92 per share, plus interest, in accordance with applicable German law. The total amount of funds necessary to purchase all of the remaining CAG Shares as of March 31, 2005, assuming all such shares were tendered on or prior to that date that the Domination Agreement became operative would be at least €340 million. The Purchaser may elect, or be required, to pay a purchase price in excess of €41.92 to acquire the remaining outstanding CAG Shares. Any minority shareholder who elects not to sell its shares to the Purchaser will be entitled to remain a shareholder of CAG and to receive from the Purchaser a gross guaranteed fixed annual payment on its shares of €3.27 per CAG Share less certain corporate taxes in lieu of any future dividend. Beginning October 1, 2004, taking into account the circumstances and the tax rates at the time of entering into the Domination Agreement, the net guaranteed fixed annual payment would be €2.89 per share for a full fiscal year. The net guaranteed fixed annual payment may, depending on applicable corporate tax rates, in the future be higher, lower or the same as €2.89 per share. For the three months ended March 31, 2005, a charge of $8 million was recorded in Other income (expense), net for the guaranteed payment.

Beginning October 1, 2004, under the terms of the Domination Agreement, the Purchaser, as the dominating entity, among other things, is required to compensate Celanese AG for any statutory

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

annual loss incurred by Celanese AG, the dominated entity, on a non-consolidated basis, at the end of the fiscal year when the loss was incurred. This obligation to compensate Celanese AG for annual losses will apply during the entire term of the Domination Agreement.

There is no assurance that the Domination Agreement will remain operative in its current form. If the Domination Agreement ceases to be operative, the Company will not be able to directly give instructions to the Celanese AG board of management. The Domination Agreement cannot be terminated by the Purchaser in the ordinary course until September 30, 2009. However, irrespective of whether a domination agreement is in place between the Company and Celanese AG, under German law Celanese AG is effectively controlled by the Company because of the Company's approximate 84% ownership of the outstanding CAG Shares. The Company does have the ability, through a variety of means, to utilize its controlling rights to, among other things, (1) cause a domination agreement to become operative; (2) use its ability, through its approximately 84% voting power at any shareholders' meetings of Celanese AG, to elect the shareholder representatives on the supervisory board and to thereby effectively control the appointment and removal of the members of the Celanese AG board of management; and (3) effect all decisions that an approximately 84% majority shareholder is permitted to make under German law. The controlling rights of the Company constitute a controlling financial interest for accounting purposes and result in the Company being required to consolidate CAG as of the date of acquisition.

Organizational Restructuring

In October 2004, Celanese Holdings and certain of its subsidiaries completed an organizational restructuring (the "Organizational Restructuring") pursuant to which the Purchaser effected, by giving a corresponding instruction under the Domination Agreement, the transfer of all of the shares of Celanese Americas Corporation ("CAC") from Celanese Holding GmbH, a wholly owned subsidiary of Celanese AG, to BCP Caylux Holdings Luxembourg S.C.A ("BCP Caylux"), which resulted in BCP Caylux owning 100% of the equity of CAC and, indirectly, all of its assets, including subsidiary stock. This transfer was affected by CAG selling all outstanding shares in CAC for a €291 million note. This note eliminates in consolidation.

Following the transfer of CAC to BCP Caylux, (1) Celanese Holdings contributed substantially all of its assets and liabilities (including all outstanding capital stock of BCP Caylux) to BCP Crystal US Holdings Corp. ("BCP Crystal") in exchange for all outstanding capital stock of BCP Crystal and (2) BCP Crystal assumed certain obligations of BCP Caylux, including all rights and obligations of BCP Caylux under the senior credit facilities, the floating rate term loan and the senior subordinated notes. BCP Crystal, at its discretion, may subsequently cause the liquidation of BCP Caylux.

As a result of these transactions, BCP Crystal holds 100% of CAC's equity and, indirectly, all equity owned by CAC in its subsidiaries. In addition, BCP Crystal holds, indirectly, all of the outstanding common stock of Celanese AG held by the Purchaser and all of the wholly owned subsidiaries of the Company that guarantee BCP Caylux's obligations under the senior credit facilities guarantee the senior subordinated notes issued on June 8, 2004 and July 1, 2004 (see Note 9) on an unsecured senior subordinated basis.

4. Celanese Corporation Initial Public Offering and Concurrent Financings

In January 2005, Celanese Corporation, the ultimate parent of Celanese Holdings, completed an initial public offering of Series A common stock and convertible perpetual preferred stock for net proceeds of $985 million. Celanese Corporation contributed $572 million of the net proceeds to the Company, through its wholly-owned subsidiary Crystal US Holdings 3 L.L.C. The Company used such proceeds to repay $572 million of the Company's senior subordinated notes, which includes an early redemption premium of $51 million.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Subsequent to the closing of the initial public offering, the Company borrowed an additional $1,135 million under the amended and restated senior credit facilities, a portion of which was used to repay a $350 million floating rate term loan, which excludes a $4 million early redemption premium, and $200 million of which was used as the primary financing for the February 2005 acquisition of the Vinamul business (see Notes 6 and 9). In April and May 2005, the Company declared and paid $578 million of the net proceeds to its ultimate Parent, Celanese Corporation, through Crystal US Holdings 3 L.L.C., in the form of dividends.

5. Accounting Changes and New Accounting Pronouncements

Accounting Changes in 2004

During 2004, the Predecessor changed its inventory valuation method of accounting for its US subsidiaries from the LIFO method to the FIFO method to conform to the Successor's accounting policy. The Predecessor's financial statements have been restated to reflect this change.

In March 2004, the Emerging Issues Task Force ("EITF") reached a consensus on Issue No. 03-01, Other than Temporary Impairment, which outlines the basic model to be used to evaluate whether an investment is impaired and sets the disclosure requirements for such investments. EITF Issue No. 03-1 is to be applied prospectively in periods beginning after June 15, 2004. The Company has applied the provisions of EITF Issue No. 03-01 in the current reporting period with no material impact on the Company's financial position or results of operations and cash flows for the three months ended March 31, 2005.

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Medicare Act") was signed into law. The Act introduces a prescription drug benefit under Medicare ("Medicare Part D") as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. As of March 31, 2004, as permitted by FASB Staff Position ("FSP") 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the Company deferred accounting for the effects of the Act in the measurement of its Accumulated Postretirement Benefit Obligation (APBO) and the effect to net periodic postretirement benefit costs. Specific guidance with respect to accounting for the effects of the Act was issued in FSP No. 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, and the Company has adopted the provisions of FSP No. 106-2 as of the Effective Date, and included any impact in the overall measurement of the liabilities of the U.S. postretirement medical plans in purchase accounting.

Recent Accounting Pronouncements

In March 2005, the FASB issued FSP No. FIN 46(R)-5, Implicit Variable Interests under FASB Interpretation No. 46 (revised December 2003). FSP FIN 46(R)-5 addresses whether a reporting enterprise should consider whether it holds an implicit interest in a variable interest entity or potential variable interest entity when specific conditions exist. The provisions of FSP FIN 46(R)-5 are applicable for reporting periods beginning after March 3, 2005 (the Company's fiscal quarter ending June 30, 2005). The Company has not yet determined the impact of adopting FSP FIN 46(R)-5, if any, on its consolidated financial statements and related disclosures.

In March 2005, FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations – an interpretation of FASB Statement No. 143 ("FIN No. 47"). FIN No. 47 provides guidelines as to when a company is required to record a conditional asset retirement obligation. In general, an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. The fair value of a liability for

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

the conditional asset retirement obligation should be recognized when incurred – generally upon acquisition, construction, or development and (or) through the normal operation of the asset. FIN No. 47 is effective no later than the end of fiscal years ending after December 15, 2005 (December 31, 2005, for calendar-year enterprises). The Company is still assessing the impact of FIN No. 47 on its future results of operations and financial position.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions. The amendments made by SFAS No. 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. The statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in fiscal periods beginning after the date of issuance. The provisions of this statement shall be applied prospectively. The Company is currently evaluating the potential impact of this statement.

In December 2004, the FASB revised SFAS No. 123, Accounting for Stock Based Compensation ("SFAS No. 123R"), which requires that the cost from all share-based payment transactions be recognized in the financial statements. The SEC has deferred SFAS No. 123R until the first annual period beginning after June 15, 2005. Accordingly, the Company intends to comply with SFAS No. 123R beginning with the fiscal year commencing January 1, 2006. The Company is currently evaluating the potential impact of SFAS No. 123R, although it is anticipated that the adoption will have a negative impact on results of operations.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, amendment to ARB No. 43 Chapter 4 ("SFAS No. 151"), which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. The Company is in the process of assessing the impact of SFAS No. 151 on its future results of operations and financial position.

In October 2004, the American Jobs Creation Act of 2004 (the "Act") was signed into law. Three of the more significant provisions of the Act relate to a one-time opportunity to repatriate foreign earnings at a reduced rate, manufacturing benefits for qualified production activity income and new requirements with respect to deferred compensation plans. The Company has not yet determined the impact, if any, of this Act on its future results of operations or cash flows. Additionally, under new Section 409A of the Internal Revenue Code, created in connection with the Act, the U.S. Treasury Department is directed to issue regulations providing guidance and provide a limited period during which deferred compensation plans may be amended to comply with the requirements of Section 409A. When the regulations are issued, the Company may be required to make modifications to certain compensation plans to comply with Section 409A.

6. Acquisitions, Divestitures and Ventures

Acquisitions:

On April 6, 2004, the Company acquired CAG (See Notes 1 and 2).

In February 2005, the Company acquired Vinamul, the North American and European emulsion polymer business of Imperial Chemical Industries PLC ("ICI") for $208 million. The Vinamul product line includes vinyl acetate-ethylene copolymers, vinyl acetate homopolymers and copolymers, and acrylic and vinyl acrylic emulsions. Vinamul operates manufacturing facilities in the United States, Canada, the United Kingdom, and The Netherlands. As part of the agreement, ICI will continue to

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

supply Vinamul with starch, dextrin and other specialty ingredients following the acquisition. The Company will supply ICI with vinyl acetate monomer and polyvinyl alcohols. The supply agreements are for 15 years, and the pricing is based on market and other negotiated terms. The Company primarily financed this acquisition through borrowings of $200 million under the amended and restated senior credit facilities (See Note 9). Pro forma financial information has not been provided as the acquisition did not have a material impact on the Company's results of operations.

On October 27, 2004, the Company agreed to acquire Acetex for approximately $261 million and the assumption by the Company of debt owed by Acetex, valued at approximately $231 million. On January 12, 2005, the Acetex shareholders approved the transaction. Presently, Acetex has two primary businesses—its Acetyls business and its Specialty Polymers and Films business. Closing of the acquisition is dependent upon regulatory approvals and other customary conditions. There can be no assurances that this transaction will be consummated. In connection with the funding of this proposed acquisition, the Company expects to borrow $242 million under the delayed draw acquisition facility provided for in the amended and restated senior credit facilities (See Note 9).

Divestitures:

In February 2004, the Predecessor sold its acrylates business to The Dow Chemical Company ("Dow") for a sales price of approximately $149 million, which resulted in a pre-tax gain of approximately $14 million in the three months ended March 31, 2004. Dow acquired the Predecessor's acrylates business line, including inventory, intellectual property and technology for crude acrylic acid, glacial acrylic acid, ethyl acrylate, butyl acrylate, methyl acrylate and 2-ethylhexyl acrylate, as well as acrylates production assets at the Clear Lake, Texas facility. In related agreements, the Company provides certain contract manufacturing services to Dow, and Dow supplies acrylates to the Company for use in its emulsions production. Simultaneous with the sale, the Predecessor repaid an unrelated obligation of $95 million to Dow. The acrylates business was part of the Predecessor's Chemical business. As a result of this transaction, the assets, liabilities, revenues and expenses related to the acrylates product lines at the Clear Lake, Texas facility as well as the gain recorded on the sale are reflected as a component of discontinued operations in the consolidated financial statements in accordance with SFAS No. 144.

Discontinued operations of Chemical Products for the three months ended March 31, 2004 had net sales of $21 million and an operating loss of $5 million.

Ventures:

In April 2004, the Company and a group of investors led by Conduit Ventures Ltd. entered into a venture, Pemeas GmbH, which was formed in order to advance the commercialization of the Company's fuel cell technology. Pemeas GmbH is considered a variable interest entity as defined under FIN No. 46, The Company is deemed the primary beneficiary of this variable interest entity and, accordingly, consolidates this entity in its consolidated financial statements. In December 2004, the Company approved a plan to dispose of the Company's ownership interest in Pemeas GmbH.

7. Inventories


	As of March 31, 2005		As of December 31, 2004
	(in $ millions)
Finished goods		480		470
Work-in-process		28		26
Raw materials and supplies		133		122
Total Inventories		641		618

As a result of the acquisition of Vinamul (see Note 6), the Company acquired inventory with a fair value of $24 million, which includes $1 million in capitalized manufacturing profit in inventory. The inventory was subsequently sold during the three months ended March 31, 2005.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

8. Intangible Assets

Goodwill


	Chemical Products			Acetate Products			Ticona		Performance Products		Total
	(in $ millions)
Predecessor
Carrying value of goodwill as of December 31, 2003		568			161			343		—		1,072
Exchange rate changes		(2	)		(1	)		—		—		(3	)
Carrying value of goodwill as of March 31, 2004		566			160			343		—		1,069

Successor
Carrying value of goodwill as of December 31, 2004		193			180			290		84		747
Acquisition of Vinamul Polymers		27			—			—		—		27
Acquisition of additional CAG shares		1			—			1		—		2
Exchange rate changes		1			—			1		1		3
Carrying value of goodwill as of March 31, 2005		222			180			292		85		779

In connection with the acquisition of Vinamul (see Note 6), the Company has preliminarily allocated the purchase price to assets acquired and liabilities assumed primarily based on the historical cost of the business acquired. The excess of the purchase price over the amounts allocated to assets and liabilities is included in goodwill, and is preliminarily estimated to be $27 million at March 31, 2005. The Company is in the process of determining the fair value of all assets acquired and liabilities assumed. The Company expects to finalize the purchase accounting for this transaction in 2005.

In connection with the acquisition of Vinamul Polymers, at the acquisition date, the Company began formulating a plan to exit or restructure certain activities. The Company has not completed this analysis, and as of March 31, 2005, has not recorded any liabilities associated with these activities. As the Company finalizes any plans to exit or restructure activities, it may record additional liabilities, for among other things, severance and severance related costs and such amounts could be material.

Other Intangible Assets


	As of March 31, 2005			As of December 31, 2004
	(in $ millions)
Trademarks and tradenames		75			68
Customer related intangible assets		365			365
Developed technology		9			9
Total intangible assets, gross		449			442

Less: accumulated amortization		(53	)		(42	)
Total intangible assets, net		396			400

Aggregate amortization expense charged against earnings for intangible assets with finite lives during the three months ended March 31, 2005 and March 31, 2004 totaled $12 million and $2 million, respectively.

In connection with the acquisition of Vinamul, the Company entered into a five-year non-compete agreement with the seller. The contract has a preliminary fair value of $10 million. As the Company has not finalized its purchase price allocation, this amount could change based on final valuations. In addition, other intangible assets may be identified.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

9. Debt


	As of March 31, 2005		As of December 31, 2004
	(in $ millions)
Short-term borrowings and current installments of long-term debt
Current installments of long-term debt		25		15
Short-term borrowings from Affiliates		114		128
Other		—		1
Total short-term borrowings and current installments of long-term debt		139		144
Long-term debt
Senior Credit Facilities:
Term loan facility		1,750		624
Floating Rate Term Loan, due 2011		—		350
Senior Subordinated Notes 9.625%, due 2014		800		1,231
Senior Subordinated Notes 10.375%, due 2014		169		272
Term notes 7.125%, due 2009		14		14
Pollution control and industrial revenue bonds, interest rates ranging from 5.2% to 6.7%, due at various dates through 2030		191		191
Obligations under capital leases and other secured borrowings due at various dates through 2018		44		49
Other borrowings		6		—
Subtotal		2,974		2,731
Less: Current installments of long-term debt		25		15
Total long-term debt		2,949		2,716

In the three months ended March 31, 2005, the Company borrowed an additional $1,135 million under the amended and restated senior credit facilities. A portion of these proceeds, coupled with the proceeds from the initial public offering, were used to repay a $350 million floating rate term loan and redeem $521 million of senior subordinated notes, excluding early redemption premiums of $4 million and $51 million, respectively. In addition, $200 million was used to finance the February 2005 acquisition of the Vinamul business.

Under the amended and restated facilities, the term loan facility increased to $1,750 million (including €275 million), which matures in 2011. In addition, there is a $242 million delayed draw facility which when drawn will be added to the existing term loan facility. This delayed draw facility can only be used to finance the proposed acquisition of Acetex or to purchase the remaining outstanding CAG Shares. The Company expects to use this delayed draw facility to finance the proposed acquisition of Acetex.

The revolving credit facility, through a syndication of banks, provides for borrowings of up to $600 million, including the availability of letters of credit in U.S. dollars and euros and for borrowings on same-day notice.

In January 2005, the revolving credit facility was increased from $380 million to $600 million under the amended and restated senior credit facilities. The $228 million credit-linked revolving facility, which matures in 2009, includes borrowing capacity available for letters of credit. As of March 31, 2005, there were $214 million of letters of credit issued under the credit-linked revolving facility. As of March 31, 2005, $614 million remained available for borrowing under the revolving credit

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

facilities (taking into account letters of credit issued under the credit-linked revolving credit facility). As of May 12, 2005, there were no amounts outstanding under the revolving credit facility, which matures in 2009.

The Company is in compliance with all of its covenant agreements as of March 31, 2005.

Interest expense

For the three months ended March 31, 2005, the Successor recorded interest expense of $140 million, which includes amortization of deferred financing costs of $26 million, of which $23 million related to accelerated amortization of deferred financing costs and early redemption premiums associated with the partial redemption of the senior subordinated notes and floating rate term loan, as well as $55 million in early redemption premiums paid associated with this partial redemption.

10. Benefit Obligations

The components of net periodic benefit costs recognized and contributions made to the pension plans and benefit payments made to other postretirement obligations participants are as follows:


	Defined Benefit Obligations						Other Postretirement Obligations
	Successor			Predecessor			Successor			Predecessor
	Three Months Ended March 31, 2005			Three Months Ended March 31, 2004			Three Months Ended March 31, 2005			Three Months Ended March 31, 2004
				(in $ millions)
Components of net periodic benefit cost for the
Service cost		10			9			1			1
Interest cost		45			40			6			6
Expected return on plan assets		(49	)		(40	)		—			—
Amortization of prior service cost		—			1			—			(1	)
Recognized actuarial loss		—			6			—			2
Curtailment gain		—			—			(1	)		—
Net periodic benefit cost		6			16			6			8

The Company previously disclosed in its financial statements for the year ended December 31, 2004 that it expected to contribute $7 million to its defined benefit pension plans in 2005. As ofMarch 31, 2005, $2 million of contributions have been made. The Company presently anticipates contributing an additional $5 million to fund its defined benefit pension plans in 2005 for a total of $7 million.

The Company previously disclosed in its financial statements for the year ended December 31, 2004 that it expected to make benefit payments of $47 million to its other postretirement benefit plans. As of March 31, 2005, $10 million of benefit payments have been made. The Company presently anticipates contributing an additional $31 million to fund its other postretirement benefit plans in 2005 for a total of $41 million.

Contributions to the defined contribution plans are based on specified percentages of employee contributions and they aggregated $4 million and $3 million for the three months ended March 31, 2005 and 2004, respectively.

In connection with the acquisition of CAG, the Purchaser agreed to pre-fund $463 million of certain pension obligations. During the nine months ended December 31, 2004, $409 million was pre-funded to the Company's pension plans. The Company contributed the remaining $54 million that the Purchaser agreed to prefund, as well as an additional $9 million to the non-qualified pension plan's rabbi trusts during the three months ended March 31, 2005.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

11. Shareholders' Equity

The capital structure of the Company consists of one class of $0.01 par value ordinary shares. At March 31, 2005 and December 31, 2004, there was one share issued and outstanding to Crystal US Holdings 3 L.L.C., the Company's sole shareholder.

12. Commitments and Contingencies

The Company is involved in a number of legal proceedings, lawsuits and claims incidental to the normal conduct of our business, relating to such matters as product liability, antitrust, past waste disposal practices and release of chemicals into the environment. While it is impossible at this time to determine with certainty the ultimate outcome of these proceedings, lawsuits and claims, management believes that adequate provisions have been made and that the ultimate outcomes will not have a material adverse effect on our financial position, but may have a material adverse effect on the results of operations or cash flows in any given accounting period.

Plumbing Actions

CNA Holdings, Inc. ("CNA Holdings"), a U.S. subsidiary of the Company, which included the U.S. business now conducted by the Ticona segment, along with Shell Oil Company ("Shell"), E.I. DuPont de Nemours and Company ("DuPont") and others, has been a defendant in a series of lawsuits, including a number of class actions, alleging that plastics manufactured by these companies that were utilized in the production of plumbing systems for residential property were defective or caused such plumbing systems to fail. Based on, among other things, the findings of outside experts and the successful use of Ticona's acetal copolymer in similar applications, CNA Holdings does not believe Ticona's acetal copolymer was defective or caused the plumbing systems to fail. In many cases CNA Holdings' exposure may be limited by invocation of the statute of limitations since CNA Holdings ceased selling the resin for use in the plumbing systems in site built homes during 1986 and in manufactured homes during 1990.

CNA Holdings has been named a defendant in ten putative class actions, further described below, as well as a defendant in other non-class actions filed in ten states, the U.S. Virgin Islands, and Canada. In these actions, the plaintiffs typically have sought recovery for alleged property damages and, in some cases, additional damages under the Texas Deceptive Trade Practices Act or similar type statutes. Damage amounts have not been specified.

Developments under these matters are as follows:


•	Dilday, et al. v. Hoechst Celanese Corporation, et al.—Weakley County, Tennessee 27th Judicial Chancery Court. Class certification of recreational vehicle owners was denied in July 2001, and cases are proceeding on an individual basis.

•

Shelter General Insurance Co., et al. v. Shell Oil Company, et al.—Weakley County, Tennessee Chancery Court. In April 2000, the U.S. District Court for the District of New Jersey denied class certification for a putative class action (of insurance companies with respect to subrogation claims). The plaintiffs' appeal to the Third Circuit Court of Appeals was denied in July 2000, and the case was subsequently dismissed. In September 2000, a similar putative class action seeking certification of the same class that was denied in the New Jersey matter was filed in Tennessee state court. The Tennessee court denied certification in March 2002, and plaintiffs are attempting an appeal. Cases are continuing on an individual basis.

•

Tom Tranter v. Shell Oil Company, et al.—Ontario Court, General Division; Gariepy, et al. v. Shell Oil Company, et al.—Ontario Court, General Division. These matters, which the Court consolidated, were denied class certification but are currently on appeal. Dupont and Shell have each settled these matters, as well as the Couture and Furlan matters below. Their settlement agreements have been approved by the Court. CNA Holdings is the only defendant remaining in this lawsuit.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

•

Richard Couture, et al. v. Shell Oil Company, et al.—Superior Court, Providence of Quebec; Furlan v. Shell Oil Company, et al.—British Columbia Supreme Court, Vancouver Registry. Dupont and Shell have each settled these matters, as noted above. CNA Holdings is the only defendant remaining in these lawsuits. They are "on hold" pending the outcome of the appeal in the Tranter and Gariepy matters above, as in Canadian practice, Ontario tends to be the "lead jurisdiction" in such cases.

•

Howard, et al. v. Shell Oil Company, et al.—9th Judicial Circuit Court of Common Pleas, Charleston County, South Carolina; Viera, et al. v. Hoechst Celanese Corporation, et al.—11th Judicial Circuit Court, Dade County, Florida; Fry, et al. v. Hoechst Celanese Chemical Group, Inc., et al.—5th Judicial Circuit Court, Marion County, Florida. Certification has been denied in these putative class actions pending in South Carolina and Florida state courts. The Plaintiff's petition to appeal the Howard matter to the United States Supreme Court was denied in late September 2004, and CNA Holdings' motion to dismiss has been granted. Although plaintiffs in Viera and Fry subsequently sought to bring actions individually, they were dismissed, and their appeal was denied.


•	Richard, et al. v. Hoechst Celanese Chemical Group, Inc., et al.—U.S. District Court for the Eastern District of Texas, Texarkana Division. The court denied certification of a putative class action in March 2002, and the Fifth Circuit Court has upheld the dismissal. The plaintiff's petition to appeal to the United States Supreme Court was denied in late September 2004.


•	St. Croix Ltd., et al. v. Shell Oil Company, et al.—Virgin Islands Territorial Court, St. Croix Division. The court in a putative class action denied certification to a U.S. territories-wide class and dismissed CNA Holdings on jurisdictional grounds. Plaintiffs are seeking reconsideration of those rulings.


•	Vickers, et al. v. Shell Oil Company, et al.—U.S. District Court—Northern District of Indiana. A putative nationwide class action was filed in federal court in December 2002 against, among others, CNA Holdings and Shell. CNA Holding's motion to dismiss this lawsuit was granted in December 2003. The plaintiffs' appeal to the 7th Circuit of Appeals in January 2004 was dismissed.

In order to reduce litigation expenses and to provide relief to qualifying homeowners, in November 1995, CNA Holdings, DuPont and Shell Oil Company entered into national class action settlements, which have been approved by the courts. The settlements call for the replacement of plumbing systems of claimants who have had qualifying leaks, as well as reimbursements for certain leak damage. Furthermore, the three companies have agreed to fund these replacements and reimbursements up to $950 million. As of March 31, 2005, the funding is $1,073 million due to additional contributions and funding commitments made primarily by other parties. There are additional pending lawsuits in approximately 5 jurisdictions not covered by this settlement; however, these cases do not involve (either individually or in the aggregate) a large number of homes, and management does not expect the obligations arising from these lawsuits to have a material adverse effect on the Company.

In 1995, CNA Holdings and Shell Oil Company settled the claims relating to individuals in Texas owning a total of 110,000 property units, who are represented by a Texas law firm, for an amount that will not exceed $170 million. These claimants are also eligible for a replumb of their homes in accordance with terms similar to those of the national class action settlement. CNA Holdings' and Shell Oil Company's contributions under this settlement were subject to allocation as determined by binding arbitration.

In addition, a lawsuit filed in November 1989 in Delaware Chancery Court, between CNA Holdings and various of its insurance companies relating to all claims incurred and to be incurred for

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

the product liability exposure led to a partial declaratory judgment in CNA Holdings' favor. As a result, settlements have been reached with a majority of CNA Holdings' insurers specifying their responsibility for these claims. However, in January 2000, CNA Holdings filed a motion in Superior State Court in Wilmington, Delaware to set a trial date with respect to this lawsuit against one insurer, asserting that the settlement is void because the insurer refused to make the required "coverage in place" payments to CNA Holdings. The insurer and CNA Holdings signed a settlement agreement in June 2003. Pursuant to the settlement agreement, the insurer agreed to pay CNA Holdings $105 million in five annual installments in satisfaction of all claims incurred and to be incurred for the product liability expense previously covered by the insurer.

In February 2005, CNA Holdings reached a settlement agreement through mediation with another insurer, pursuant to which the insurer paid CNA Holdings $44 million in exchange for the release of certain claims against the policy with the insurer. This amount was recorded as a reduction of goodwill as of December 31, 2004 and was received during the three months ended March 31, 2005.

CNA Holdings has accrued its best estimate of its share of the plumbing actions. At March 31, 2005, the Company has remaining accruals of $72 million for this matter, of which $10 million is included in current liabilities. Management believes that the plumbing actions are adequately provided for in the Company's financial statements and that they will not have a material adverse effect on our financial position. However, if the Company were to incur an additional charge for this matter, such a charge would not be expected to have a material adverse effect on our financial position, but may have a material adverse effect on our results of operations or cash flows in any given accounting period. No assurance can be given that the Company's litigation reserves will be adequate or that these reserves will fully recover claims under the Company's insurance policies.

The Company has reached settlements with CNA Holdings' insurers specifying their responsibility for these claims; as a result, the Company has recorded receivables relating to the anticipated recoveries from certain third party insurance carriers. These receivables are based on the probability of collection, an opinion of external counsel, the settlement agreements with the Company's insurance carriers whose coverage level exceeds the receivables and the status of current discussions with other insurance carriers. As of March 31, 2005, the Company has $31 million of receivables related to a settlement with an insurance carrier. This receivable is discounted and recorded within Other assets as it will be collected over the next three years.

Sorbates Antitrust Actions

In 1998, Nutrinova, Inc., a U.S. subsidiary of Nutrinova Nutrition Specialties & Food Ingredients GmbH, then a wholly-owned subsidiary of Hoechst, received a grand jury subpoena from the United States District Court for the Northern District of California in connection with a criminal antitrust investigation of the sorbates industry. On May 3, 1999, Hoechst and the U.S. Federal Government entered into an agreement under which Hoechst pled guilty to a one-count indictment charging Hoechst with participating in a conspiracy to fix prices and allocate market shares of sorbates sold in the United States. Hoechst and the U.S. Federal Government agreed to recommend that the U.S. District Court fine Hoechst $36 million, payable over five years, with the last payment of $5 million being paid in June 2004. Hoechst also agreed to cooperate with the U.S. Federal investigation and prosecutions related to the sorbates industry. The U.S. District Court accepted this plea on June 18, 1999 and imposed a penalty as recommended in the plea agreement.

Nutrinova and Hoechst have cooperated with the European Commission since 1998 in connection with matters relating to the sorbates industry. In May 2002, the European Commission informed Hoechst of its intent to investigate officially the sorbates industry, and in early January 2003, the European Commission served Hoechst, Nutrinova and a number of competitors with a statement of objections alleging unlawful, anticompetitive behavior affecting the European sorbates market. In

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

October 2003, the European Commission ruled that Hoechst, Chisso Corporation, Daicel Chemical Industries Ltd., The Nippon Synthetic Chemical Industry Co. Ltd. and Ueno Fine Chemicals Industry Ltd. operated a cartel in the European sorbates market between 1979 and 1996. The European Commission imposed a total fine of €138.4 million ($179 million), of which €99 million ($128 million) was assessed against Hoechst. The case against Nutrinova was closed. The fine against Hoechst is based on the European Commission's finding that Hoechst does not qualify under the leniency policy, is a repeat violator and, together with Daicel, was a co-conspirator. In Hoechst's favor, the European Commission gave a discount for cooperating in the investigation. Hoechst appealed the European Commission's decision in December 2003, and that appeal is still pending.

In addition, several civil antitrust actions by sorbates customers, seeking monetary damages and other relief for alleged conduct involving the sorbates industry, have been filed in U.S. state and federal courts naming Hoechst, Nutrinova, and our other subsidiaries, as well as other sorbates manufacturers, as defendants. Many of these actions have been settled and dismissed by the court. One private action, Kerr v. Eastman Chemical Co. et al., is still pending in the Superior Court of New Jersey, Law Division, Gloucester County. The plaintiff alleges violations of the New Jersey Antitrust Act and the New Jersey Consumer Fraud Act and seeks unspecified damages.

In July 2001, Hoechst and Nutrinova entered into an agreement with the Attorneys General of 33 states, pursuant to which the statutes of limitations were tolled pending the states' investigations. This agreement expired in July 2003. Since October 2002, the Attorneys General for New York, Illinois, Ohio, Utah and Idaho filed suit on behalf of indirect purchasers in their respective states. The Utah, Nevada and Idaho actions have been dismissed as to Hoechst, Nutrinova and CAG. A motion for reconsideration is pending in Nevada. An appeal filed in Idaho was dismissed and that dismissal was upheld by the Idaho Supreme Court. The Ohio and Illinois actions have been settled, and the Idaho action was dismissed in February 2005. The New York action, New York v. Daicel Chemical Industries Ltd., et al. pending in the New York State Supreme Court, New York County, is the only Attorney General action still pending; it too seeks unspecified damages. All antitrust claims in this matter were dismissed by the court in September 2004; however, other state law claims are still pending. Hoechst and Nutrinova have filed an appeal of the court's denial of the motion to dismiss those remaining claims. A settlement agreement with the Attorneys General of Connecticut, Florida, Hawaii, Maryland, South Carolina, Oregon and Washington is currently being negotiated and these Attorneys General have been granted extensions of the tolling agreement.

Based on the advice of external counsel and a review of the existing facts and circumstances relating to the sorbates matter, including the status of government investigations, as well as civil claims filed and settled, the Company has remaining accruals of $138 million. This amount is included in current liabilities at March 31, 2005 for the estimated loss relative to this matter. Although the outcome of this matter cannot be predicted with certainty, management's best estimate of the range of possible additional future losses and fines (in excess of amounts already accrued), including any that may result from the above noted governmental proceedings, as of March 31, 2005 is between $0 and $9 million. The estimated range of such possible future losses is management's best estimate based on the advice of external counsel taking into consideration potential fines and claims, both civil and criminal, that may be imposed or made in other jurisdictions.

Pursuant to the Demerger Agreement with Hoechst, Celanese AG was assigned the obligation related to the sorbates matter. However, Hoechst agreed to indemnify Celanese AG for 80 percent of any costs Celanese may incur relative to this matter. Accordingly, Celanese AG has recognized a receivable from Hoechst and a corresponding contribution of capital, net of tax, from this indemnification. As of March 31, 2005, the Company has receivables, recorded within other current assets, relating to the sorbates indemnification from Hoechst totaling $111 million. Although the outcome of the foregoing proceedings and claims cannot be predicted with certainty, the Company believes that any resulting liabilities, net of amounts recoverable from Hoechst, will not, in the

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

aggregate, have a material adverse effect on our financial position, but may have a material adverse effect on the results of operations or cash flows in any given period.

Acetic Acid Patent Infringement Matters

Celanese International Corporation v. China Petrochemical Development Corporation—Taiwan Kaohsiung District Court. On February 7, 2001, Celanese International Corporation filed a private criminal action for patent infringement against China Petrochemical Development Corporation, or CPDC, alleging that CPDC infringed Celanese International Corporation's patent covering the manufacture of acetic acid. This criminal action was subsequently converted to a civil action alleging damages against CPDC based on a period of infringement of five years, 1996-2000, and based on CPDC's own data and as reported to the Taiwanese securities and exchange commission. Celanese International Corporation's patent was held valid by the Taiwanese patent office. The amount of damages claimed by Celanese International Corporation has been reassessed at $35 million. This action is still pending.

Shareholder Litigation

CAG is a defendant in nine consolidated actions brought by minority shareholders during August 2004 in the Frankfurt District Court (Landgericht).

Further, several minority shareholders have joined the proceedings via a third party intervention in support of the plaintiffs. The Purchaser has joined the proceedings via a third party intervention in support of CAG. On September 8, 2004, the Frankfurt District Court consolidated the nine actions.

Among other things, these actions request the court to set aside shareholder resolutions passed at the extraordinary general meeting held on July 30 and 31, 2004 based on allegations that include the alleged violation of procedural requirements and information rights of the shareholders.

Further, on August 2, 2004, two minority shareholders instituted public register proceedings with the Königstein local court (Amtsgericht) and the Frankfurt district court, both with a view to have the registration of the Domination Agreement in the Commercial Register deleted (Amtslöschungsverfahren). These actions are based on an alleged violation of procedural requirements at the extraordinary general meeting, an alleged undercapitalization of the Purchaser and Blackstone and an alleged misuse of discretion by the competent court with respect to the registration of the Domination Agreement in the Commercial Register. In April 2005, the court of appeals rejected the demand by one shareholder for injunctive relief, and the claimants must pursue their claims through ordinary court proceedings.

Based upon information available as of March 31, 2005, the outcome of the foregoing proceedings cannot be predicted with certainty. Except for certain challenges on limited grounds, the time period to bring forward challenges has expired.

The amounts of the fair cash compensation (Abfindung) and of the guaranteed fixed annual payment (Ausgleich) offered under the Domination Agreement may be increased in special award proceedings (Spruchverfahren) initiated by minority shareholders, which may further reduce the funds the Purchaser can otherwise make available to the Company. Several minority shareholders of CAG had initiated special award proceedings seeking court's review of the amounts of the fair cash compensation (Abfindung) and of the guaranteed fixed annual payment (Ausgleich) offered under the Domination Agreement. As a result of these proceedings, the amount of the fair cash consideration and the guaranteed fixed annual payment offered under the Domination Agreement could be increased by the court so that all minority shareholders, including those who have already tendered their shares into the mandatory offer and have received the fair cash compensation could claim the respective higher amounts. This could reduce the funds the Purchaser can make available to

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Celanese Holdings and its subsidiaries and, accordingly, diminish our ability to make payments on our indebtedness. However, the court dismissed all of these proceedings in March 2005 on the grounds of inadmissibility. The dismissal has been appealed.

In February 2005, a minority shareholder also brought a lawsuit against the Purchaser, as well as a former member of CAG's board of management and a former member of CAG's supervisory board, in the Frankfurt District Court. Among other things, this action seeks to unwind the tender of the plaintiff's shares in the Acquisition and seeks compensation for damages suffered as a consequence of tendering such shares.

Based upon the information as available, the outcome of the foregoing proceedings cannot be predicted with certainty.

Guarantees

The Company has agreed to guarantee or indemnify third parties for environmental and other liabilities pursuant to a variety of agreements, including asset and business divestiture agreements, leases, settlement agreements, and various agreements with affiliated companies. Although many of these obligations contain monetary and/or time limitations, others do not provide such limitations.

The Company has accrued for all probable and reasonably estimable losses associated with all known matters or claims that have been brought to its attention.

These known obligations include the following:

Demerger Obligations

The Company has obligations to indemnify Hoechst for various liabilities under the Demerger Agreement as follows:


•	The Company agreed to indemnify Hoechst for environmental liabilities associated with contamination arising under 19 divestiture agreements entered into by Hoechst prior to the demerger.

The Company's obligation to indemnify Hoechst is subject to the following thresholds:


•	The Company will indemnify Hoechst against those liabilities up to €250 million (approximately $325 million);


•	Hoechst will bear those liabilities exceeding €250 million (approximately $325 million), however the Company will reimburse Hoechst for one-third of those liabilities for amounts that exceed €750 million (approximately $975 million) in the aggregate.

The Company's obligation regarding two agreements has been settled. The aggregate maximum amount of environmental indemnifications under the remaining divestiture agreements that provide for monetary limits is €750 million (approximately $975 million). Three of the divested agreements do not provide for monetary limits.

Based on the estimate of the probability of loss under this indemnification, the Company has reserves of $46 million as of March 31, 2005, for this contingency. Where the Company is unable reasonably to determine the probability of loss or estimate such loss under an indemnification, the Company has not recognized any related liabilities.

The Company has also undertaken in the Demerger Agreement to indemnify Hoechst to the extent that Hoechst is required to discharge liabilities, including tax liabilities, associated with businesses that were included in the demerger where such liabilities were not demerged, due to legal restrictions on the transfers of such items. These indemnities do not provide for any monetary or time

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

limitations. The Company has not provided for any reserves associated with this indemnification. Neither the Company nor the Predecessor made any payments to Hoechst in the three months ended March 31, 2005 or 2004, in connection with this indemnification.

Divestiture Obligations

The Company and its predecessor companies agreed to indemnify third party purchasers of former businesses and assets for various pre-closing conditions, as well as for breaches of representations, warranties and covenants. Such liabilities also include environmental liability, product liability, antitrust and other liabilities. These indemnifications and guarantees represent standard contractual terms associated with typical divestiture agreements and, other than environmental liabilities, the Company does not believe that they expose the Company to any significant risk.

The Company and the Predecessor have divested in the aggregate over 20 businesses, investments and facilities, through agreements containing indemnifications or guarantees to the purchasers. Many of the obligations contain monetary and/or time limitations, ranging from one year to 30 years, the aggregate amount of guarantees provided for under these agreements is approximately $2.9 billion as of March 31, 2005. Other agreements do not provide for any monetary or time limitations.

Based on historical claims experience and its knowledge of the sites and businesses involved, the Company believes that it is adequately reserved for these matters. As of March 31, 2005, the Company has reserves in the aggregate of $49 million for all such environmental matters.

Plumbing Insurance Indemnifications

CAG entered into agreements with insurance companies related to product liability settlements associated with Celcon^® plumbing claims. These agreements, except those with insolvent insurance companies, require the Company to indemnify and/or defend these insurance companies in the event that third parties seek additional monies for matters released in these agreements. The indemnifications in these agreements do not provide for time limitations.

In certain of the agreements, CAG received a fixed settlement amount. The indemnities under these agreements generally are limited to, but in some cases are greater than, the amount received in settlement from the insurance company. The maximum exposure under these indemnifications is $95 million. Other settlement agreements have no stated limits.

There are other agreements whereby the settling insurer agreed to pay a fixed percentage of claims that relate to that insurer's policies. The Company has provided indemnifications to the insurers for amounts paid in excess of the settlement percentage. These indemnifications do not provide for monetary or time limitations.

The Company has reserves associated with these product liability claims. See Plumbing Actions above.

Other Obligations


•	The Company is secondarily liable under a lease agreement pursuant to which the Company has assigned a direct obligation to a third party. The lease assumed by the third party expires on April 30, 2012. The lease liability for the period from April 1, 2005 to April 30, 2012 is estimated to be approximately $54 million.


•	The Company has agreed to indemnify various insurance carriers, for amounts not in excess of the settlements received, from claims made against these carriers subsequent to the settlement. The aggregate amount of guarantees under these settlements is approximately $10 million, which is unlimited in term.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

As indemnification obligations often depend on the occurrence of unpredictable future events, the future costs associated with them cannot be determined at this time. However, the Company were to incur additional charges for these matters, such charges may have a material adverse effect on the financial position, results of operations or cash flows of the Company in any given accounting period.

Other Matters

As of the latest practical date, Celanese Ltd. and/or CNA Holdings, Inc., both our U.S. subsidiaries, are defendants in approximately 850 asbestos cases. Because many of these cases involve numerous plaintiffs, the Company is subject to claims significantly in excess of the number of actual cases. The Company has reserves for defense costs related to claims arising from these matters. The Company believes that there is not significant exposure related to these matters.

The Company entered into an agreement with Goldman, Sachs & Co. oHG, an affiliate of Goldman, Sachs and Co., on December 15, 2003 (the "Goldman Sachs Engagement Letter"), pursuant to which Goldman Sachs acted as the Company's financial advisor in connection with the tender offer culminating in the Acquisition. Pursuant to the terms of the Goldman Sachs Engagement Letter, in March 2004, Celanese AG paid Goldman Sachs a financial advisory fee equal to $13 million and a discretionary bonus equal to $5 million, upon consummation of the tender offer. In addition, Celanese AG agreed to reimburse Goldman Sachs for all its reasonable expenses and to indemnify Goldman Sachs and related persons for all direct damages arising in connection with Goldman Sachs Engagement Letter.

Under the transaction and monitoring fee agreement/sponsor services agreement, the Company has agreed to indemnify the Advisor and its affiliates and their respective partners, members, directors, officers, employees, agents and representatives for any and all losses relating to services contemplated by these agreements and the engagement of the Advisor pursuant to, and the performance by the Advisor or the services contemplated by, these agreements. The Company has also agreed under the transaction and monitoring fee agreement/sponsor services agreement to reimburse the Advisor and its affiliates for their expenses incurred in connection with the services provided under these agreements or in connection with their ownership or subsequent sale of Celanese Corporation stock (See Note 17).

On July 31, 2003, a federal district court ruled that the formula used in International Business Machine Corporation's ("IBM") cash balance pension plan violated the age discrimination provisions of the Employee Retirement Income Security Act of 1974. The IBM decision, however, conflicts with the decisions from two other federal district courts and with the proposed regulations for cash balance plans issued by the Internal Revenue Service in December 2002. IBM has announced that it will appeal the decision to the United States Court of Appeals for the Seventh Circuit. The effect of the IBM decision on the Company's cash balance plan cannot be determined at this time.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

13. Special Charges

The components of special charges were as follows:


	Successor			Predecessor
	Three Months Ended March 31, 2005			Three Months Ended March 31, 2004
	(in $ millions)
Employee termination benefits		(2	)		(2	)
Plant/office closures		(1	)		—
Total Restructuring		(3	)		(2	)
Termination of advisor monitoring services		(35	)		—
Advisory services		—			(25	)
Other		—			(1	)
Total Special Charges		(38	)		(28	)

The components of the restructuring reserves were as follows:


	Employee Termination Benefits			Plant/Office Closures			Total
	(in $ millions)
Predecessor
Restructuring reserve at December 31, 2003		28			21			49
Restructuring additions		2			—			2
Cash and noncash uses		(5	)		(2	)		(7	)
Restructuring reserve at March 31, 2004		25			19			44

Successor
Restructuring reserve at December 31, 2004		72			14			86
Purchase accounting adjustments		1			—			1
Restructuring additions		2			1			3
Cash and noncash uses		(9	)		(2	)		(11	)
Currency translation adjustments		(1	)		—			(1	)
Restructuring reserve at March 31, 2005		65			13			78

14. Stock-based and Other Management Compensation Plans

In December 2004, Celanese Corporation approved a stock incentive plan, a deferred compensation plan, as well as other management incentive programs, which included executive officers and key employees of the Company.

The stock incentive plan allows for the issuance or delivery of up to 16.25 million shares of Celanese Corporation's Series A common stock through stock options and a discounted share program. In January 2005, options were initially granted at an exercise price equal to the initial public offering price. The options have a ten-year term with vesting terms pursuant to a schedule, with no vesting to occur later than the 8th anniversary of the date of the grant. Accelerated vesting depends on meeting specified performance targets. Of the 11.1 million stock options granted, 9.3 million are non-compensatory. The remaining 1.8 million options are subject to variable plan accounting. Compensation expense related to these options was not material for the three months ended March 31, 2005. No options were forfeited or exercised during the three months ended March 31, 2005.

In December 2004, Celanese Corporation granted rights to the Company's executive officers and key employees to purchase up to 1,797,386 shares of Celanese Corporation's Series A common stock

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

at a discount of $8.80 per share. During the three months ended March 31, 2005, 1,613,317 shares have been purchased. As a result of this discounted share offering, the Company recorded a pre-tax non-cash charge of $14 million, with a corresponding adjustment to additional paid-in capital within shareholders' equity during 2004.

The deferred compensation plan has an aggregate maximum amount payable of $192 million. The initial component of the deferred compensation plan, totaling an aggregate of approximately $27 million, vested in 2004 and was paid in the first quarter of 2005.

• Stock-based compensation

As permitted by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123"), the Successor accounts for employee stock-based compensation in accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees ("APB No. 25"), using an intrinsic value approach to measure compensation expense, if any.

For the three months ended March 31, 2004, the Predecessor accounted for stock options and similar equity instruments under the fair value method, which requires compensation cost to be measured at the grant date based on the value of the award.

The fair value of options granted in the three months ended March 31, 2005 under Celanese Corporation's stock incentive plan was estimated at the date of grant using the Black Scholes option pricing model. The following weighted average assumptions were used:

The weighted average fair value of options granted was $5.21 per option.

The following table illustrates the effect on net earnings (loss) if the Successor had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation for the three months ended March 31, 2005:


	Net Earnings
	(in $ millions)
Net earnings, as reported		15
Less: stock-based compensation under SFAS No. 123		(2	)
Pro forma net earnings		13

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

15. Income Taxes

Income taxes for the three months ended March 31, 2005 and 2004, are recorded based on the estimated annual effective tax rate. As of March 31, 2005, the estimated annualized tax rate for 2005 is 29%, which is slightly less than the combination of the statutory rate and state income tax rates in the U.S. The estimated annual effective tax rate for 2005 reflects earnings in low tax jurisdictions, a valuation allowance for the tax benefit associated with projected U.S. losses (which includes the expenses associated with the early redemption of debt), and tax expense in certain non-U.S. jurisdictions. The Predecessor had an effective tax rate of 24% for the three months ended March 31, 2004, compared to the German statutory rate of 40%, which was primarily affected by earnings in low tax jurisdictions.

16. Business Segments


	Chemical Products		Acetate Products		Ticona		Performance Products		Total Segments		Reconciliation			Consolidated
							(in $ millions)
Successor
For the three months ended March 31, 2005
Sales to external customers		1,015		196		239		47		1,497		12			1,509
Inter-segment revenues		29		—		—		—		29		(29	)		—
Operating profit		177		20		39		13		249		(80	)		169
Earnings from continuing operations before tax and minority interests		193		20		51		12		276		(219	)		57
Depreciation and amortization		34		9		15		3		61		2			63
Capital expenditures		18		5		14		2		39		1			40

Predecessor
For the three months ended March 31, 2004
Sales to external customers		789		172		227		44		1,232		11			1,243
Inter-segment revenues		29		—		—		—		29		(29	)		-
Operating profit		65		9		31		11		116		(64	)		52
Earnings from continuing operations before tax and minority interests		64		9		45		11		129		(57	)		72
Depreciation and amortization		39		13		16		2		70		2			72
Capital expenditures		15		8		20		—		43		1			44

17. Related Party Transactions

Upon closing of the Acquisition, the Company and Celanese Corporation entered into a transaction and monitoring fee agreement with Blackstone Management Partners (the "Advisor"), an affiliate of the Blackstone Group (the "Sponsor"). Under the agreement, the Advisor agreed to provide monitoring services to the Company for a 12 year period. Also, the Advisor may receive

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

additional compensation for providing investment banking or other advisory services provided to the Company by the Advisor or any of its affiliates in connection with any specific acquisition, divestiture, refinancing, recapitalization, or similar transaction. In connection with the completion of the initial public offering, the parties amended and restated the transaction and monitoring fee agreement to terminate the monitoring services and all obligations to pay future monitoring fees and paid the Advisor $35 million. The Company also paid $10 million to the Advisor for the 2005 monitoring fee. The transaction based agreement remains in effect.

In connection with the acquisition of Vinamul, the Company paid the Advisor a fee of $2 million, which was included in the computation of the purchase price for the acquisition. In connection with the proposed acquisition of Acetex, the Company paid the Advisor an initial fee of $1 million, which is included in Other assets. Additional fees will become due and payable to the Advisor upon the successful completion of this acquisition.

18. Consolidating Guarantor Financial Information

The following unaudited consolidating financial information is presented in the provided form because: (i) the Issuer (prior to the completion of the Organizational Restructuring, BCP Caylux, and subsequent to the Organizational Restructuring, BCP Crystal) is a 100% owned subsidiary of the Parent Guarantor (Celanese Holdings LLC); (ii) the guarantees are considered to be full and unconditional, that is if the Issuer fails to make a scheduled payment, the Parent Guarantor and the subsidiary guarantors are obligated to make the scheduled payment immediately and, if they do not, any holder of the notes may immediately bring suit directly against the Parent Guarantor and the subsidiary guarantors for payment of all amounts due and payable, and (iii) the guarantees are joint and several. Separate financial statements and other disclosures concerning the guarantors are not presented because management does not believe that such information is material to investors.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION


	Successor
	For the Three Months Ended March 31, 2005
	Parent Guarantor		Issuer			Subsidiary Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in $ millions)
Net sales		—		—			736			1,049			(276	)		1,509
Cost of sales		—		—			(603	)		(798	)		276			(1,125	)
Selling, general and administrative expenses		—		(10	)		(74	)		(74	)		—			(158	)
Research and development expenses		—		—			(9	)		(14	)		—			(23	)
Special charges:
Restructuring, impairment and other special charges		—		(35	)		(2	)		(1	)		—			(38	)
Foreign exchange gain (loss), net		—		3			—			—			—			3
Gain on disposition of assets		—		—			1			—			—			1
Operating profit (loss)		—		(42	)		49			162			—			169

Equity in net earnings of affiliates		93		24			56			7			(165	)		15
Interest expense		—		(133	)		(32	)		(14	)		39			(140	)
Interest income		—		35			2			12			(39	)		10
Other income (expense), net		—		(17	)		(1	)		21			—			3
Earnings (loss) from continuing operations before tax and minority interests		93		(133	)		74			188			(165	)		57

Income tax provision		—		—			(2	)		(15	)		—			(17	)

Earnings (loss) from continuing operations before minority interests		93		(133	)		72			173			(165	)		40

Minority interests		—		—			—			(25	)		—			(25	)

Net earnings (loss)		93		(133	)		72			148			(165	)		15

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION


	Predecessor
	For the Three Months Ended March 31, 2004
	Subsidiary Guarantors			Non-Guarantors			Eliminations			Consolidated
	(in $ millions)
Net sales		584			875			(216	)		1,243
Cost of sales		(488	)		(730	)		216			(1,002	)
Selling, general and administrative expenses		(62	)		(75	)		—			(137	)
Research and development expenses		(10	)		(13	)		—			(23	)
Special charges
Restructuring, impairment and other special charges		(2	)		(26	)		—			(28	)
Foreign exchange gain (loss)		1			(1	)		—			—
Loss on disposition of assets		(1	)		—			—			(1	)

Operating profit		22			30			—			52
Equity in net earnings of affiliates		28			(391	)		375			12
Interest expense		(13	)		—			7			(6	)
Interest income		1			11			(7	)		5
Other income (expense), net		—			9			—			9

Earnings (loss) from continuing operations before tax		38			(341	)		375			72

Income tax provision		(2	)		(15	)		—			(17	)

Earnings (loss) from continuing operations		36			(356	)		375			55

Earnings from discontinued operations		23			—			—			23

Net earnings (loss)		59			(356	)		375			78

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

UNAUDITED CONSOLIDATING BALANCE SHEET INFORMATION


	Successor
	As of March 31, 2005
	Parent Guarantor		Issuer		Subsidiary Guarantors		Non- Guarantors		Eliminations			Consolidated
	(in $ millions)
ASSETS
Current assets:
Cash and cash equivalents		—		409		82		1,019		—			1,510
Receivables, net:
Trade receivables, net — third party and affiliates		—		—		273		725		—			998
Other receivables		—		1,141		208		696		(1,490	)		555
Inventories		—		—		259		382		—			641
Deferred income taxes		—		—		68		7		—			75
Other assets		—		2		85		26		—			113
Assets of discontinued operations		—		—		3		—		—			3
Total current assets		—		1,552		978		2,855		(1,490	)		3,895
Investments		1,269		928		1,840		468		(3,938	)		567
Property, plant and equipment, net		—		—		897		942		—			1,839
Deferred income taxes		—		—		—		48		—			48
Other assets		—		1,156		267		512		(1,290	)		645
Goodwill		—		71		880		897		(1,069	)		779
Intangible assets, net		—		—		122		274		—			396
Total assets		1,269		3,707		4,984		5,996		(7,787	)		8,169
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current installments of long-term debt — third party and affiliates		—		17		1,197		124		(1,199	)		139
Accounts payable and accrued liabilities:
Trade payables — third party and affiliates		—		3		289		485		—			777
Other current liabilities		—		28		262		808		(291	)		807
Deferred income taxes		—		—		—		25		—			25
Income taxes payable		—		—		50		188		—			238
Liabilities of discontinued operations		—		—		8		—		—			8
Total current liabilities		—		48		1,806		1,630		(1,490	)		1,994
Long-term debt		—		2,701		1,078		460		(1,290	)		2,949
Deferred income taxes		—		—		—		230		—			230
Benefit obligations		—		—		873		114		—			987
Other liabilities		—		45		231		217		—			493
Minority interests		—		—		—		533		—			533
Commitments and contingencies
Shareholders' equity		1,269		913		996		2,812		(5,007	)		983
Total liabilities and shareholders' equity		1,269		3,707		4,984		5,996		(7,787	)		8,169

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

UNAUDITED CONSOLIDATING BALANCE SHEET INFORMATION


	Successor
	As of December 31, 2004
	Parent Guarantor		Issuer			Subsidiary Guarantors		Non- Guarantors⁽¹⁾		Eliminations			Consolidated
	(in $ millions)
ASSETS
Current assets:
Cash and cash equivalents		—		6			127		705		—			838
Receivables, net:
Trade receivables, net — third party and affiliates		—		—			202		664		—			866
Other receivables		—		934			263		981		(1,500	)		678
Inventories		—		—			259		359		—			618
Deferred income taxes		—		—			68		3		—			71
Other assets		—		2			36		48		—			86
Assets of discontinued operations		—		—			2		—		—			2
Total current assets		—		942			957		2,760		(1,500	)		3,159
Investments		742		327			1,851		483		(2,803	)		600
Property, plant and equipment, net		—		—			749		953		—			1,702
Deferred income taxes		—		—			—		54		—			54
Other assets		—		1,194			264		583		(1,302	)		739
Goodwill		—		69			891		856		(1,069	)		747
Intangible assets, net		—		—			115		285		—			400
Total assets		742		2,532			4,827		5,974		(6,674	)		7,401
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Short-term borrowings and current installments of long-term debt — third party and affiliates		—		79			1,138		142		(1,215	)		144
Accounts payable and accrued liabilities:
Trade payables — third party and affiliates		—		1			272		449		—			722
Other current liabilities		—		21			330		822		(285	)		888
Deferred income taxes		—		—			—		20		—			20
Income taxes payable		—		—			50		164		—			214
Liabilities of discontinued operations		—		—			7		—		—			7
Total current liabilities		—		101			1,797		1,597		(1,500	)		1,995
Long-term debt		—		2,472			1,074		472		(1,302	)		2,716
Deferred income taxes		—		—			—		256		—			256
Benefit obligations		—		—			882		118		—			1,000
Other liabilities		—		57			235		218		—			510
Minority interests		—		—			—		518		—			518
Commitments and contingencies
Shareholders' equity (deficit)		742		(98	)		839		2,795		(3,872	)		406
Total liabilities and shareholders' equity (deficit)		742		2,532			4,827		5,974		(6,674	)		7,401


(1)	Included in Non-Guarantors are purchase accounting adjustments related to the Acquisition of CAG (see Note 2), which will be pushed down to legal entities when the purchase price allocation is complete.

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION


	Successor
	For the Three Months Ended March 31, 2005
	Parent Guarantor			Issuer			Subsidiary Guarantors			Non- Guarantors			Eliminations		Consolidated
	(in $ millions)
Net cash provided by (used in) operating activities		—			(313	)		111			234			—		32
Investing activities from continuing operations:
Capital expenditures on property, plant and equipment		—			—			(17	)		(23	)		—		(40	)
Acquisition of CAG shares		—			—			—			(2	)		—		(2	)
Investment in Subsidiaries		(572	)		572			—			—			—		—
Fees associated with the acquisition of Vinamul		—			—			(5	)		(2	)		—		(7	)
Acquisition of Vinamul		—			(56	)		(134	)		(18	)		—		(208	)
Net proceeds from disposal of discontinued operations		—			—			—			75			—		75
Proceeds from sale of marketable securities		—			—			1			103			—		104
Purchases of marketable securities		—			—			(1	)		(26	)		—		(27	)
Other, net		—			—			—			—			—		—
Net cash provided by (used in) investing activities		(572	)		516			(156	)		107			—		(105	)
Financing activities from continuing operations:
Contribution from Parent, net		572			—			—			—			—		572
Redemption of senior subordinated notes, including related premium		—			(572	)		—			—			—		(572	)
Borrowings under term loan facility		—			1,135			—			—			—		1,135
Fees associated with financing		—			(7	)		—			—			—		(7	)
Repayment of floating rate term loan, including related premium		—			(354	)		—			—			—		(354	)
Short-term borrowings (repayments), net		—			—			—			(10	)		—		(10	)
Proceeds from other long-term debt		—			—			—			6			—		6
Payments of other long-term debt		—			(2	)		—			(1	)		—		(3	)
Net cash provided by (used in) financing activities		572			200			—			(5	)		—		767
Exchange rate effects on cash		—			—			—			(22	)		—		(22	)
Net increase (decrease) in cash and cash equivalents		—			403			(45	)		314			—		672
Cash and cash equivalents at beginning of period		—			6			127			705			—		838
Cash and cash equivalents at end of period		—			409			82			1,019			—		1,510
Net cash provided by (used in) discontinued operations:
Operating activities		—			—			—			(75	)				(75	)
Investing activities		—			—			—			75			—		75
Net cash provided by (used in) discontinued operations		—			—			—			—			—		—

CELANESE HOLDINGS LLC AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION


	Predecessor
	For the Three Months Ended March 31, 2004
	Subsidiary Guarantors			Non-Guarantors			Eliminations		Consolidated
	(in $ millions)
Net cash provided by (used in) operating activities		(144	)		37			—		(107	)
Investing activities from continuing operations:
Capital expenditures on property, plant and equipment		(21	)		(23	)		—		(44	)
Net proceeds from disposal of discontinued operations		134			5			—		139
Proceeds from sale of marketable securities		3

Risk free interest rate

Estimated life in years

Dividend yield

Volatility

Celanese Holdings LLC 10-Q