##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2006oro

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)
   Form 10-Q Form 10-Q
  þ o
  Rule 12b-2
 o o þ
  Rule 12b-2
 o þ
  Form 10-Q,




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##### 



CELANESE
    HOLDINGS LLCForm 10-Q
    For the Quarterly Period Ended June 30, 2006
    TABLE OF CONTENTS
  
  PagePart I  Financial
    InformationItem 1.

Financial Statementsa)

Unaudited
    Consolidated Statements of Operations for the three months ended
    June 30, 2006 and 2005 and the six months ended
    June 30, 2006 and 2005


2b)

Unaudited
    Consolidated Balance Sheets as of June 30, 2006 and
    December 31, 2005


3c)

Unaudited
    Consolidated Statement of Shareholders Equity for the six
    months ended June 30, 2006


4d)

Unaudited
    Consolidated Statements of Cash Flows for the six months ended
    June 30, 2006 and 2005


5e)

Notes to the
    Unaudited Interim Consolidated Financial Statements


6Item 2.

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


41Item 3.

Quantitative and
    Qualitative Disclosures about Market Risk


57Item 4.

Controls and
    Procedures


57Part II  
    Other InformationItem 1.

Legal
    Proceedings


59Item 1A.

Risk
    Factors


59Item 2.

Unregistered Sales
    of Equity Securities and Use of Proceeds


60Item 3.

Defaults Upon
    Senior Securities


60Item 4.

Submission of
    Matters to a Vote of Security Holders


61Item 5.

Other
    Information


61Item 6.

Exhibits


61Signatures


63CertificationsEX-12: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGESEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   1




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##### Table of Contents



CELANESE
    HOLDINGS LLC AND SUBSIDIARIES
  UNAUDITED CONSOLIDATED STATEMENTS OF
    OPERATIONS
  Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions, except for share and per share data)Net sales


1,674



1,506



3,326



2,984Cost of sales


(1,326
)


(1,165
)


(2,611
)


(2,271
)Gross profit


348



341



715



713Selling, general and
    administrative expenses


(152
)


(133
)


(300
)


(289
)Research and development expenses


(18
)


(23
)


(36
)


(46
)Special (charges) gains:Insurance recoveries associated
    with plumbing cases


2



4



3



4Restructuring, impairment and
    other special (charges) gains


(14
)


(31
)


(15
)


(69
)Foreign exchange gain (loss), net


(1
)


(1
)


(1
)


2Loss on disposition of assets, net


(1
)


(3
)


(1
)


(2
)Operating profit


164



154



365



313Equity in net earnings of
    affiliates


18



12



39



27Interest expense


(63
)


(59
)


(124
)


(199
)Interest income


9



8



17



18Other income, net


32



18



38



21Earnings from continuing
    operations before tax and minority interests


160



133



335



180Income tax provision


(46
)


(40
)


(95
)


(57
)Earnings from continuing
    operations before minority interests


114



93



240



123Minority interests


(1
)


(13
)


(1
)


(38
)Earnings from continuing operations


113



80



239



85Earnings from operation of
    discontinued operations










1



10Net earnings


113



80



240



95    2




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##### Table of Contents



CELANESE
    HOLDINGS LLC AND SUBSIDIARIES
  UNAUDITED
    CONSOLIDATED BALANCE SHEETS
  As of


As ofJune 30, 2006


December 31, 2005(In $ millions)ASSETSCurrent assets:Cash and cash equivalents


353



389Restricted cash


44



Receivables:Trade receivables, net


997



919Other receivables


569



486Inventories


655



661Deferred income taxes


31



37Other assets


73



91Total current assets


2,722



2,583Investments


815



775Property, plant and equipment, net
    of accumulated depreciation of $550 million and
    $444 million as of June 30, 2006 and December 31,
    2005, respectively


2,082



2,040Deferred income taxes


117



139Other assets


434



474Goodwill


906



949Intangible assets, net


488



481Total assets


7,564



7,441LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Short-term borrowings and current
    installments of long-term debt  third party and
    affiliates


174



155Trade payables  third
    party and affiliates


744



811Other current liabilities


701



787Deferred income taxes


24



36Income taxes payable


255



224Total current liabilities


1,898



2,013Long-term debt


2,921



2,903Deferred income taxes


300



285Benefit obligations


1,110



1,126Other liabilities


454



440Minority interests


68



64Commitments and contingenciesShareholders equity:Common stock, one share issued and
    outstanding as of June 30, 2006 and December 31, 2005






Additional paid-in capital


818



807Retained earnings


378



156Loan to shareholder


(227
)


(227
)Accumulated other comprehensive
    income (loss), net


(156
)


(126
)Total shareholders equity


813



610Total liabilities and
    shareholders equity


7,564



7,441    3




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##### Table of Contents



CELANESE
    HOLDINGS LLC AND SUBSIDIARIES
  UNAUDITED
    CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
  AccumulatedOtherAdditional





Comprehensive





TotalCommon


Paid-In


Retained


Income (Loss),


Loan to


ShareholdersStock


Capital


Earnings


Net


Shareholder


Equity(In $ millions, except share amounts)Balance at December 31, 2005






807



156



(126
)


(227
)


610Comprehensive income (loss), net of
    tax:Net earnings










240











240Other comprehensive income (loss):Unrealized gain on securities














(3
)






(3
)Unrealized gain on derivative
    contracts














4







4Additional minimum pension liability














(2
)






(2
)Foreign currency translation














(29
)






(29
)Other comprehensive income (loss)














(30
)






(30
)Comprehensive income






















210Indemnification of demerger
    liability






2















2Distribution to Parent










(18
)










(18
)Stock-based compensation






9















9Balance at June 30, 2006






818



378



(156
)


(227
)


813    4




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##### Table of Contents



CELANESE
    HOLDINGS LLC AND SUBSIDIARIES
  UNAUDITED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
  Six Months


Six MonthsEnded


EndedJune 30, 2006


June 30, 2005(In $ millions)Operating activities:Net earnings


240



95Adjustments to reconcile net
    earnings to net cash provided by (used in) operating activities:Special (charges) gains, net of
    amounts used


(23
)


4Stock-based compensation


10



Depreciation


103



100Amortization of intangibles and
    other assets


39



30Amortization of deferred financing
    fees


5



30Premium paid on early redemption of
    debt






55Guaranteed annual payment


(4
)


Change in equity of affiliates


(3
)


19Deferred income taxes


18



(12
)Loss on disposition of assets, net






2Minority interests


1



38Operating cash provided by (used
    in) discontinued operations






27Changes in operating assets and
    liabilities:Trade receivables, net


(41
)


(133
)Other receivables


(77
)


53Prepaid expenses


19



(21
)Inventories


21



13Trade payables  third
    party and affiliates


(88
)


(29
)Benefit obligations and other
    liabilities


(116
)


(117
)Income taxes payable


19



42Other, net


21



(15
)Net cash provided by operating
    activities


144



181Investing activities:Capital expenditures on property,
    plant and equipment


(115
)


(86
)Acquisition of CAG, net of cash
    acquired






(6
)Fees associated with acquisitions






(10
)Acquisition of Vinamul, net of cash
    reimbursed






(208
)Proceeds from sale of assets






14Net proceeds from disposal of
    discontinued operations






75Proceeds from sale of marketable
    securities


40



141Purchases of marketable securities


(24
)


(59
)Increase in restricted cash


(42
)


Other, net






1Net cash used in investing
    activities


(141
)


(138
)Financing activities:Contribution from parent, net






572Distribution to parent


(18
)


(581
)Redemption of senior subordinated
    notes, including related premium






(572
)Repayment of floating rate term
    loan, including related premium






(354
)Borrowings under term loan facility






1,135Short-term borrowings (repayments),
    net


(24
)


(26
)Proceeds from long-term debt


7



9Payments of long-term debt


(16
)


Fees associated with financings






(7
)Net cash provided by (used in)
    financing activities


(51
)


176Exchange rate effects on cash


12



(99
)Net increase (decrease) in cash and
    cash equivalents


(36
)


120Cash and cash equivalents at
    beginning of period


389



838Cash and cash equivalents at end of
    period


353



958    5




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##### Table of Contents



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
    Basis
    of Presentation
  Form 10-Q, (Kommanditgesellschaft, KG)
      Form 10-K.
    Estimates
    and Assumptions
   6




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
    Restricted
    Cash
    Reclassifications
    2.
    Acquisition
    of Celanese AG  (Spruchverfahren)
  Acquisition
    of Additional CAG Shares
     7




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
  (Spruchverfahren)
  Pro
    Forma Information
    Three Months


Six MonthsEnded


EndedJune 30, 2005


June 30, 2005(In $ millions)Net sales


1,506



2,984Operating profit


152



309Net earnings


91



127       Squeeze-Out
     8




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   3.
    Domination
    Agreement and Organizational Restructuring  Domination
    Agreement
    Ausgleichszahlung Ausgleichszahlung Ausgleichszahlung
     9




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
    (Landgericht)
  (Landgericht) (Landgericht) (Entlastung)
  Nichtigkeitsklagen Landgericht
  Organizational Restructuring
    Spruchverfahren
 10




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
    Organizational
    Restructuring
        4.
    Initial
    Public Offering and Concurrent Financings       11




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   5.
    Accounting
    Changes and New Accounting Pronouncements  Accounting
    Changes
  Inventory Costs, an amendment of ARB No. 43,
    Chapter 4
  Accounting for Stock-Based Compensation, Share Based Payment, Accounting for Stock Issued to
    Employees
  Exchanges of Nonmonetary Assets, an amendment of APB Opinion
    No. 29, Accounting for Nonmonetary Transactions
  Accounting for Certain Hybrid Financial Instruments
 12




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
  6.  Acquisitions,
    Divestitures and Ventures
  Acquisitions
      Acetex(In $ millions)Cash


54Inventories


80Property, plant, and equipment


263Goodwill


174Intangible assets


76Debt


(316
)Pensions liabilities


(28
)Other current assets/liabilities


(17
)Net assets acquired


286   Divestitures
   13




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   Form 10-K Accounting for the Impairment or
    Disposal of Long-Lived Assets.
    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions)Net sales






11







42Cost of sales






(10
)






(29
)Gross profit






1







13Operating profit














10Gain on disposal of discontinued
    operations


1







2



Tax expense from operation of
    discontinued operations


(1
)






(1
)


Earnings from discontinued
    operations










1



10   7.
    Receivables,
    net  As of


As ofJune 30, 2006


December 31, 2005(In $ millions)Trade receivables


1,012



935Reinsurance receivables


146



117Other


423



369Subtotal


1,581



1,421Allowance for doubtful
    accounts  third party and affiliates


(15
)


(16
)Net receivables


1,566



1,405   8.
    Inventories  As of


As ofJune 30, 2006


December 31, 2005(In $ millions)Finished goods


479



504Work-in-process


30



27Raw materials and supplies


146



130Total inventories


655



661  14




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   9.
    Goodwill
    and Intangible Assets  Goodwill
  Chemical


Acetate





PerformanceProducts


Products


Ticona


Products


Other


Total(In $ millions)As of December 31, 2005


380



188



285



79



17



949Acquisition of Acetex


13















(5
)


8Acquisition of CAG (1)


(10
)


(5
)


(5
)










(20
)Exchange rate changes


(22
)


2



(16
)


5







(31
)As of June 30, 2006


361



185



264



84



12



906     (1)
    
    The adjustments recorded during the six months ended
    June 30, 2006 consist primarily of the reversals of certain
    pre-acquisition tax valuation allowances.    Other
    Intangible Assets
  As of


As ofJune 30, 2006


December 31, 2005(In $ millions)Trademarks and tradenames


81



73Customer related intangible assets


516



474Developed technology


12



12Covenants not to compete


11



11Total intangible assets, gross


620



570Less: accumulated amortization


(132
)


(89
)Total intangible assets, net


488



481    15




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   10.
    Debt  As of


As ofJune 30, 2006


December 31, 2005(In $ millions)Short-term borrowings and
    current installments of long-term debt  third party
    and affiliatesCurrent installments of long-term
    debt


30



20Short-term borrowings, principally
    comprised of amounts due to affiliates


144



135Total short-term borrowings and
    current installments of long-term debt  third party
    and affiliates


174



155Long-term debtSenior Credit Facilities: Term
    Loan facility


1,718



1,708Senior Subordinated
    Notes 9.625%, due 2014


800



800Senior Subordinated
    Notes 10.375%, due 2014


165



153Term notes 7.125%, due 2009


14



14Pollution control and industrial
    revenue bonds, interest rates ranging from 5.2% to 6.7%, due at
    various dates through 2030


191



191Obligations under capital leases
    and other secured borrowings due at various dates through 2018


26



28Other borrowings


37



29Subtotal


2,951



2,923Less: Current installments of
    long-term debt


30



20Total long-term debt


2,921



2,903          16




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   Interest
    expense
    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions)Accelerated amortization of
    deferred financing costs on early redemption and prepayment of
    debt














23Premium paid on early redemption
    of debt














55Interest expense


63



59



124



121Total interest expense


63



59



124



199   11.
    Other
    Current Liabilities  As of


As ofJune 30, 2006


December 31, 2005(In $ millions)Accrued salaries and benefits


145



159Environmental liabilities


28



25Accrued restructuring


39



45Insurance liabilities


113



141Accrued sorbates


141



129Other


235



288Total other current liabilities


701



787   12.
    Benefit
    Obligations    Pension Benefits


Postretirement BenefitsThree Months Ended


Three Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions)Components of net
    periodic benefit costService cost


10



10







Interest cost


45



45



5



6Expected return on plan assets


(52
)


(49
)






Recognized actuarial loss


1











Curtailment (gain)/loss


1







(1
)


Net periodic benefit cost


5



6



4



6   17




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##### Table of Contents



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


Postretirement BenefitsSix Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions)Components of net periodic
    benefit costService cost


20



20



1



1Interest cost


91



90



10



12Expected return on plan assets


(103
)


(98
)






Recognized actuarial loss


1











Settlement loss














(1
)Curtailment (gain)/loss


1







(1
)


Net periodic benefit cost


10



12



10



12         13.
    Shareholders
    Equity    Accumulated
    Other Comprehensive Income (Loss)
    14.
    Commitments
    and Contingencies    Form 10-K
 18




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   Plumbing
    Actions
               19




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
      Sorbates
    Antitrust Actions
    Kerr v. Eastman Chemical Co. et al Freeman v. Daicel et al
  New York v.
    Daicel Chemical Industries Ltd., et al.
   20




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
      Shareholder
    Litigation
  (Landgericht) (Ausgleich)
  (Anfechtungs-und
    Nichtigkeitsklagen) (Landgericht) Enlastung
  (Landgericht)
 21




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
  (Nichtigkeitsklage) (Landgericht)
  (Amtsgericht) (Landgericht) (Amtslöschungsverfahren). (Landgericht) (Amtsgericht)
  (Landgericht).
    (Abfindung) (Ausgleich) (Spruchverfahren) (Abfindung) (Ausgleich)
  Guarantees
  and/or
   22




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
     Demerger
    Obligations
    
    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, 2 of which have been settled.    
    The Company will indemnify Hoechst against those liabilities up
    to 250 million;
    Hoechst will bear those liabilities exceeding
    250 million, however the Company will reimburse
    Hoechst for one-third of those liabilities for amounts that
    exceed 750 million in the aggregate.        Divestiture
    Obligations
    and/or
   23




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   Plumbing
    Insurance Indemnifications
  ® and/or
      Plumbing Actions
  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
    July 1, 2006 to April 30, 2012 is estimated to be
    approximately $45 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.    Other
    Matters
       24




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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
       15.
    Special
    (Charges) Gains    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions)Employee termination benefits


(9
)


(6
)


(11
)


(8
)Plant/office closures


(2
)


(1
)






(2
)Total restructuring


(11
)


(7
)


(11
)


(10
)Asset impairments






(24
)






(24
)Insurance recoveries associated
    with plumbing cases


2



4



3



4Other


(3
)






(4
)


(35
)Total special (charges) gains


(12
)


(27
)


(12
)


(65
)  25




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##### Table of Contents



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


Plant/OfficeBenefits


Closures


Total(In $ millions)Restructuring reserve at
    December 31, 2005


51



14



65Restructuring additions


11







11Cash uses


(20
)


(2
)


(22
)Currency translation adjustments


(1
)






(1
)Other


2







2Restructuring reserve at
    June 30, 2006


43



12



55   16.
    Stock-based
    and Other Management Compensation Plans      Deferred
    compensation
    Long-term
    incentive plan
   26




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
    Stock-based
    compensation
          Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(In $ millions)Included in reported Operating
    earningsSelling, general and administrative


5







9



Incremental pro
    formaSelling, general and administrative






4







6Actual/pro forma stock-based
    employee compensation expense


5



4



9



6  27




---



##### Table of Contents



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


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005Risk free interest rate


4.9
%


4.2
%


4.9
%


4.0
%Estimated life in years


7.0



7.8



7.0



7.5Dividend yield


0.8
%


1.0
%


0.8
%


0.8
%Volatility


30.3
%


28.0
%


30.3
%


26.1
%Expected annual forfeiture rate


5.6
%


0.5
%


5.6
%


0.5
%       Six Months Ended June 30, 2006Weighted-Weighted-


Average


AggregateNumber of


Average


Remaining


IntrinsicOptions


Grant


Contractual


Value(In millions)


Price in $


Term


(In $ millions)Outstanding at beginning of period


12



16.15



9



38Granted


2



20.99



9



Exercised






17.83



9



Forfeited


(1
)


16.19



9



2Outstanding at end of period


13



16.77



9



48Exercisable and expected to
    exercise in the future at June 30, 2006


7



16.88



9



26Options exercisable at end of
    period


5



16.07



9



24     Prior
    Period Pro Forma Presentations
  Accounting for Stock-Based Compensation 
    Transition and Disclosure, an amendment of FASB Statement
    No. 123
 28




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
    Three Months Ended June 30, 2005


Six Months Ended June 30, 2005Net


NetEarnings


Earnings(In $ millions, except per share information)Net earnings, as reported


80



95Add: stock-based employee
    compensation expense included in reported net earnings, net of
    the related tax effects






Less: stock-based compensation
    under SFAS No. 123, net of the related tax effects


(3
)


(4
)Pro forma net earnings


77



91   17.
    Income
    Taxes  non-U.S. jurisdictions.
     29




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   18.
    Business
    Segments  Chemical





Acetate


Performance


Total


OtherProducts


Ticona


Products


Products


Segments


Activities


Eliminations


Consolidated(In $ millions)As of and for the three months
    ended June 30, 2006Sales to external customers


1,152



230



176



48



1,606



68







1,674Inter-segment revenues


42















42







(42
)


Operating profit


141



38



29



16



224



(60
)






164Earnings (loss) from continuing
    operations before tax and minority interests


157



53



50



17



277



(117
)






160Depreciation and amortization


41



16



5



4



66



7







73Capital expenditures


43



6



21







70



1







71Total assets


3,380



740



1,629



368



6,117



1,447







7,564As of and for the three months
    ended June 30, 2005Sales to external customers


1,056



223



172



47



1,498



8







1,506Inter-segment revenues


29















29







(29
)


Operating profit


155



5



10



15



185



(31
)






154Earnings (loss) from continuing
    operations before tax and minority interests


149



22



12



14



197



(64
)






133Depreciation and amortization


39



14



9



3



65



2







67Capital expenditures


26



9



9



1



45



1







46Total assets(1)


3,280



1,583



691



342



5,896



1,545







7,441As of and for the six months
    ended June 30, 2006Sales to external customers


2,296



461



343



97



3,197



129







3,326Inter-segment revenues


67















67







(67
)


Operating profit


303



79



52



33



467



(102
)






365Earnings (loss) from continuing
    operations before tax and minority interests


328



109



73



32



542



(207
)






335Depreciation and amortization


79



32



12



8



131



12







143Capital expenditures


65



11



37







113



2







115Total assets


3,380



740



1,629



368



6,117



1,447







7,564As of and for the six months
    ended June 30, 2005Sales to external customers


2,071



462



337



94



2,964



20







2,984Inter-segment revenues


58















58







(58
)


Operating profit


332



44



20



28



424



(111
)






313Earnings (loss) from continuing
    operations before tax and minority interests


342



73



22



26



463



(283
)






180Depreciation and amortization


73



29



18



6



126



4







130Capital expenditures


44



23



14



3



84



2







86Total assets(1)


3,280



1,583



691



342



5,896



1,545







7,441     (1)
    
    Due to purchase accounting related to the acquisition of CAG not
    being finalized as of June 30, 2005, these amounts
    represent the balances as of December 31, 2005. 30




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   19.
    Transactions
    and Relationships with Affiliates and Related Parties        20.
    Consolidating
    Guarantor Financial Information     31




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
  Three Months Ended June 30, 2006Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)Net sales










769



1,195



(290
)


1,674Cost of sales










(613
)


(1,003
)


290



(1,326
)Gross profit










156



192







348Selling, general and
    administrative expenses










(69
)


(83
)






(152
)Research and development expenses










(10
)


(8
)






(18
)Special (charges) gains:Insurance recoveries associated
    with plumbing cases














2







2Restructuring, impairment and
    other special (charges) gains










(5
)


(9
)






(14
)Foreign exchange gain, net














(1
)






(1
)Loss on disposition of assets, net










(1
)










(1
)Operating profit (loss)










71



93







164Equity in net earnings of
    affiliates


113



131



38



14



(278
)


18Interest expense






(55
)


(43
)


(11
)


46



(63
)Interest income






41



3



11



(46
)


9Other income (expense), net






(4
)


10



26







32Earnings from continuing
    operations before tax and minority interests


113



113



79



133



(278
)


160Income tax benefit (provision)










(10
)


(36
)






(46
)Earnings from continuing
    operations before minority interests


113



113



69



97



(278
)


114Minority interests














(1
)






(1
)Earnings from continuing operations


113



113



69



96



(278
)


113Earnings from operation of
    discontinued operations






















Net earnings


113



113



69



96



(278
)


113  32




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
  Three Months Ended June 30, 2005Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)Net sales










712



1,060



(266
)


1,506Cost of sales










(603
)


(828
)


266



(1,165
)Gross profit










109



232







341Selling, general and
    administrative expenses










(64
)


(69
)






(133
)Research and development expenses










(10
)


(13
)






(23
)Special (charges) gains:Insurance recoveries associated
    with plumbing cases














4







4Restructuring, impairment and
    other special (charges) gains










(1
)


(30
)






(31
)Foreign exchange gain (loss), net














(1
)






(1
)Gain on disposition of assets, net










(1
)


(2
)






(3
)Operating profit (loss)










33



121







154Equity in net earnings of
    affiliates


80



94



44



3



(209
)


12Interest expense






(50
)


(36
)


(14
)


41



(59
)Interest income






36



1



12



(41
)


8Other income (expense), net














18







18Earnings from continuing
    operations before tax and minority interests


80



80



42



140



(209
)


133Income tax benefit (provision)










(1
)


(39
)






(40
)Earnings from continuing
    operations before minority interests


80



80



41



101



(209
)


93Minority interests














(13
)






(13
)Earnings from continuing operations


80



80



41



88



(209
)


80Earnings from operation of
    discontinued operations










1



(1
)






Net earnings


80



80



42



87



(209
)


80  33




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
  Six Months Ended June 30, 2006Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)Net sales










1,522



2,371



(567
)


3,326Cost of sales










(1,204
)


(1,974
)


567



(2,611
)Gross profit










318



397







715Selling, general and
    administrative expenses










(134
)


(167
)


1



(300
)Research and development expenses










(20
)


(16
)






(36
)Special (charges) gains:Insurance recoveries associated
    with plumbing cases














3







3Restructuring, impairment and
    other special (charges) gains










(7
)


(8
)






(15
)Foreign exchange gain, net














(1
)






(1
)Loss on disposition of assets, net










(1
)










(1
)Operating profit (loss)










156



208



1



365Equity in net earnings of
    affiliates


240



271



76



26



(574
)


39Interest expense






(108
)


(83
)


(22
)


89



(124
)Interest income






80



6



20



(89
)


17Other income (expense), net






(3
)


10



31







38Earnings from continuing
    operations before tax and minority interests


240



240



165



263



(573
)


335Income tax benefit (provision)










(18
)


(77
)






(95
)Earnings from continuing
    operations before minority interests


240



240



147



186



(573
)


240Minority interests


















(1
)


(1
)Earnings from continuing operations


240



240



147



186



(574
)


239Earnings from operation of
    discontinued operations










1











1Net earnings


240



240



148



186



(574
)


240  34




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
  Six Months Ended June 30, 2005Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)Net sales










1,431



2,095



(542
)


2,984Cost of sales










(1,199
)


(1,614
)


542



(2,271
)Gross profit










232



481







713Selling, general and
    administrative expenses






(10
)


(137
)


(143
)


1



(289
)Research and development expenses










(19
)


(27
)






(46
)Special (charges) gains:Insurance recoveries associated
    with plumbing cases














4







4Restructuring, impairment and
    other special (charges) gains






(35
)


(3
)


(31
)






(69
)Foreign exchange gain, net






3







(1
)






2Loss on disposition of assets, net














(2
)






(2
)Operating profit (loss)






(42
)


73



281



1



313Equity in net earnings of
    affiliates


95



266



100



10



(444
)


27Interest expense






(183
)


(68
)


(28
)


80



(199
)Interest income






71



3



24



(80
)


18Other income (expense), net






(17
)


(1
)


39







21Earnings from continuing
    operations before tax and minority interests


95



95



107



326



(443
)


180Income tax benefit (provision)










(3
)


(54
)






(57
)Earnings from continuing
    operations before minority interests


95



95



104



272



(443
)


123Minority interests














(38
)






(38
)Earnings from continuing operations


95



95



104



234



(443
)


85Earnings from operation of
    discontinued operations










9



1







10Net earnings


95



95



113



235



(443
)


95  35




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING BALANCE SHEET INFORMATION
  As of June 30, 2006Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)ASSETSCurrent assets:Cash and cash equivalents






55



93



205







353Restricted cash














44







44Receivables:Trade receivables, net










255



742







997Other receivables






939



229



552



(1,151
)


569Inventories










231



424







655Deferred income taxes














31







31Other assets










26



47







73Total current assets






994



834



2,045



(1,151
)


2,722Investments


813



1,518



2,090



482



(4,088
)


815Property, plant and equipment, net










867



1,215







2,082Deferred income taxes






7



3



107







117Other assets






1,005



245



448



(1,264
)


434Goodwill










339



567







906Intangible assets, net










104



384







488Total assets


813



3,524



4,482



5,248



(6,503
)


7,564LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Short-term borrowings and current
    installments of long-term debt  third party and
    affiliates






8



957



72



(863
)


174Trade payables  third
    party and affiliates










290



454







744Other current liabilities






10



245



734



(288
)


701Deferred income taxes














24







24Income taxes payable










50



205







255Total current liabilities






18



1,542



1,489



(1,151
)


1,898Long-term debt






2,666



1,154



335



(1,234
)


2,921Deferred income taxes










1



299







300Benefit obligations










927



183







1,110Other liabilities






27



206



251



(30
)


454Minority interests














68







68Commitments and contingenciesShareholders equity


813



813



652



2,623



(4,088
)


813Total liabilities and
    shareholders equity


813



3,524



4,482



5,248



(6,503
)


7,564  36




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   CONSOLIDATING
    BALANCE SHEET INFORMATION
  As of December 31, 2005Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)ASSETSCurrent assets:Cash and cash equivalents






61



93



235







389Receivables:Trade receivables, net










252



667







919Other receivables






949



191



596



(1,250
)


486Inventories










250



411







661Deferred income taxes














37







37Other assets










47



44







91Total current assets






1,010



833



1,990



(1,250
)


2,583Investments


610



1,230



2,040



454



(3,559
)


775Property, plant and equipment, net










870



1,170







2,040Deferred income taxes














139







139Other assets






1,044



261



475



(1,306
)


474Goodwill










352



597







949Intangible assets, net










110



371







481Total assets


610



3,284



4,466



5,196



(6,115
)


7,441LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Short-term borrowings and current
    installments of long-term debt  third party and
    affiliates






17



945



149



(956
)


155Trade payables  third
    party and affiliates










306



505







811Other current liabilities






10



313



758



(294
)


787Deferred income taxes














36







36Income taxes payable










52



172







224Total current liabilities






27



1,616



1,620



(1,250
)


2,013Long-term debt






2,644



1,175



360



(1,276
)


2,903Deferred income taxes














285







285Benefit obligations










953



173







1,126Other liabilities






3



227



240



(30
)


440Minority interests














64







64Commitments and contingenciesShareholders equity


610



610



495



2,454



(3,559
)


610Total liabilities and
    shareholders equity


610



3,284



4,466



5,196



6,115



7,441  37




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
  Six Months Ended June 30, 2006Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)Net cash provided by operating
    activities






26



46



72







144Investing activities from
    continuing operations:Capital expenditures on property,
    plant and equipment










(46
)


(69
)






(115
)Proceeds from sale of marketable
    securities














40







40Purchases of marketable securities














(24
)






(24
)Increase in restricted cash














(42
)






(42
)Net cash provided by (used in)
    investing activities










(46
)


(95
)






(141
)Financing activities from
    continuing operations:Short-term borrowings
    (repayments), net










1



(25
)






(24
)Proceeds from long-term debt














7







7Payments of long-term debt






(14
)


(1
)


(1
)






(16
)Dividends from subsidiary


18















(18
)


Distribution to parent


(18
)


(18
)










18



(18
)Net cash used in financing
    activities






(32
)






(19
)






(51
)Exchange rate effects on cash














12







12Net increase in cash and cash
    equivalents






(6
)






(30
)






(36
)Cash and cash equivalents at
    beginning of period






61



93



235







389Cash and cash equivalents at end
    of period






55



93



205







353  38




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   UNAUDITED
    CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
  Six Months Ended June 30, 2005Parent





Subsidiary


Non-Guarantor


Issuer


Guarantors


Guarantors


Eliminations


Consolidated(In $ millions)Net cash provided by (used in)
    operating activities






(137
)


68



250







181Investing activities from
    continuing operations:Capital expenditures on property,
    plant and equipment










(34
)


(52
)






(86
)Investments in subsidiaries, net


9











(6
)


(9
)


(6
)Fees associated with acquisitions






(2
)


(6
)


(2
)






(10
)Acquisition of Vinamul, net of cash
    reimbursed






(56
)


(134
)


(18
)






(208
)Proceeds from sale of assets














14







14Net proceeds from disposal of
    discontinued operations














75







75Proceeds from sale of marketable
    securities










1



140







141Purchases of marketable securities










(1
)


(58
)






(59
)Other, net














1







1Net cash provided by (used in)
    investing activities


9



(58
)


(174
)


94



(9
)


(138
)Financing activities from
    continuing operations:Redemption of senior subordinated
    notes, including related premium






(572
)














(572
)Repayment of floating rate term
    loan, including related premium






(354
)














(354
)Contribution from Parent


572



572











(572
)


572Borrowings under term loan
    facilities






1,135















1,135Short-term borrowings (repayments),
    net














(26
)






(26
)Proceeds (payments) from long-term
    debt






(3
)






12







9Fees associated with financing






(7
)














(7
)Distribution to parent


(581
)


(581
)










581



(581
)Net cash provided by (used in)
    financing activities


(9
)


190







(14
)


9



176Exchange rate effects on cash














(99
)






(99
)Net increase in cash and cash
    equivalents






(5
)


(106
)


231







120Cash and cash equivalents at
    beginning of period






6



127



705







838Cash and cash equivalents at end of
    period






1



21



936







958  39




---



##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES
  NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
 STATEMENTS  (Continued)
   21.
    Subsequent
    Events     40




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  In this Quarterly Report on
    Form 10-Q,
    the term Celanese refers to Celanese Holdings LLC, a
    Delaware corporation, and not its subsidiaries. The terms the
    Company, we, our, and
    us, refer to Celanese and its subsidiaries on a
    consolidated basis. The term BCP Crystal refers to
    our subsidiary, BCP Crystal US Holdings Corp., a Delaware
    corporation, 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.
  Form 10-Q Form 10-K Form 10-Q.
  Change
    in Ownership
      Squeeze-Out
     41




---



##### Table of Contents



Overview
      Financial
    Reporting Changes
  Share Based Payment Accounting
    for Stock Issued to Employees
   42




---



##### Table of Contents



Results
    of Operations
  Financial
    Highlights
  Three Months Ended


Six Months Ended% of





% of





% of





% ofJune 30, 2006


Net Sales


June 30, 2005


Net Sales


June 30, 2006


Net Sales


June 30, 2005


Net Sales(Unaudited)(In $ millions)Statement of Operations
    Data:Net sales


1,674



100.0
%


1,506



100.0
%


3,326



100.0
%


2,984



100.0
%Gross profit


348



20.8
%


341



22.6
%


715



21.5
%


713



23.9
%Special (charges) gains


(12
)


(0.7
)%


(27
)


(1.8
)%


(12
)


(0.4
)%


(65
)


(2.2
)%Operating profit


164



9.8
%


154



10.2
%


365



11.0
%


313



10.5
%Equity in net earnings of affiliates


18



1.1
%


12



0.8
%


39



1.2
%


27



0.9
%Earnings from continuing operations
    before tax and minority interests


160



9.6
%


133



8.8
%


335



10.1
%


180



6.0
%Earnings from continuing operations


113



6.8
%


80



5.3
%


239



7.2
%


85



2.8
%Earnings from discontinued
    operations


















1



0.0
%


10



0.3
%Net earnings


113



6.8
%


80



5.3
%


240



7.2
%


95



3.2
%Depreciation and amortization


73



4.4
%


67



4.4
%


143



4.3
%


130



4.4
%   As of


As ofJune 30, 2006


December 31, 2005(In $ millions)(Unaudited)Balance Sheet Data:Short-term borrowings and current
    installments of long-term debt  third party and
    affiliates


174



155Plus: Long-term debt


2,921



2,903Total debt


3,095



3,058   Summary
    of Consolidated Results for the Three and Six Months Ended
    June 30, 2006 compared to the Three and Six Months Ended
    June 30, 2005
  Net
    Sales
  ®
  Gross
    Profit
   43




---



##### Table of Contents



Selling,
    General and Administrative Expenses
    Special
    (Charges) Gains
    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005(Unaudited)(In $ millions)Employee termination benefits


(9
)


(6
)


(11
)


(8
)Plant/office closures


(2
)


(1
)






(2
)Total restructuring


(11
)


(7
)


(11
)


(10
)Asset impairments






(24
)






(24
)Insurance recoveries associated
    with plumbing cases


2



4



3



4Other


(3
)






(4
)


(35
)Total special (charges) gains


(12
)


(27
)


(12
)


(65
)     Operating
    Profit
    Equity
    in Net Earnings of Affiliates
   44




---



##### Table of Contents



Interest
    Expense
    Other
    Income (Expense), Net
    Income
    Taxes
  non-U.S. jurisdictions.
    Earnings
    from Discontinued Operations
   45




---



##### Table of Contents



Selected
    Data by Business Segment
  Three Months Ended


Six Months EndedJune 30,


June 30,


Change


June 30,


June 30,


Change2006


2005


in $


2006


2005


in $(In $ millions)(Unaudited)Net SalesChemical Products


1,194



1,085



109



2,363



2,129



234Technical Polymers Ticona


230



223



7



461



462



(1
)Acetate Products


176



172



4



343



337



6Performance Products


48



47



1



97



94



3Other Activities


68



8



60



129



20



109Inter-segment Eliminations


(42
)


(29
)


(13
)


(67
)


(58
)


(9
)Total Net Sales


1,674



1,506



168



3,326



2,984



342Special (Charges)
    GainsChemical Products


(8
)


(3
)


(5
)


(7
)


(4
)


(3
)Technical Polymers Ticona


2



(20
)


22



4



(21
)


25Acetate Products


















(1
)


1Performance Products






















Other Activities


(6
)


(4
)


(2
)


(9
)


(39
)


30Total Special Charges


(12
)


(27
)


15



(12
)


(65
)


53Operating Profit
    (Loss)Chemical Products


141



155



(14
)


303



332



(29
)Technical Polymers Ticona


38



5



33



79



44



35Acetate Products


29



10



19



52



20



32Performance Products


16



15



1



33



28



5Other Activities


(60
)


(31
)


(29
)


(102
)


(111
)


9Total Operating Profit


164



154



10



365



313



52Earnings (Loss) from Continuing
    Operations Before Tax and Minority InterestsChemical Products


157



149



8



328



342



(14
)Technical Polymers Ticona


53



22



31



109



73



36Acetate Products


50



12



38



73



22



51Performance Products


17



14



3



32



26



6Other Activities


(117
)


(64
)


(53
)


(207
)


(283
)


76Total Earnings from Continuing
    Operations Before Tax and Minority Interests


160



133



27



335



180



155Depreciation &
    AmortizationChemical Products


41



39



2



79



73



6Technical Polymers Ticona


16



14



2



32



29



3Acetate Products


5



9



(4
)


12



18



(6
)Performance Products


4



3



1



8



6



2Other Activities


7



2



5



12



4



8Total Depreciation &
    Amortization


73



67



6



143



130



13  46




---



##### Table of Contents



Factors
    Affecting Second Quarter 2006 Segment Net Sales Compared to
    Second Quarter 2005
    Volume


Price


Currency


Other


Total(In percentages)Chemical Products


1



1



1



7
(a)


10Technical Polymers Ticona


7



(2
)


0



(2
)(b)


3Acetate Products


(5
)


7



0



0



2Performance Products


13



(11
)


0



0



2Total Company


2



0



0



9
(c)


11     (a)
    
    Includes net sales from the Acetex business, excluding
    AT Plastics.(b)
    
    Includes loss of sales related to the COC divestiture.(c)
    
    Includes the effects of AT Plastics and the captive
    insurance companies.  Factors
    Affecting Six Months Ended 2006 Segment Net Sales Compared to
    Six Months Ended 2005
  Volume


Price


Currency


Other


Total(In percentages)Chemical Products


0



4



(1
)


8
(a)


11Technical Polymers Ticona


4



0



(2
)


(2
)(b)


0Acetate Products


(5
)


7



0



0



2Performance Products


18



(11
)


(4
)


0



3Total Company


0



3



(1
)


9
(c)


11     (a)
    
    Includes net sales from the Acetex business, excluding
    AT Plastics.(b)
    
    Includes loss of sales related to the COC divestiture.(c)
    
    Includes the effects of AT Plastics and the captive
    insurance companies.   47




---



##### Table of Contents



Summary
    by Business Segment for the Three and Six Months Ended
    June 30, 2006 compared to the Three and Six Months Ended
    June 30, 2005
  Chemical
    Products
  Three Months Ended


Six Months EndedChange








ChangeJune 30, 2006


June 30, 2005


in $


June 30, 2006


June 30, 2005


in $(In $ millions)(Unaudited)Net sales


1,194



1,085



109



2,363



2,129



234Net sales variance:Volume


1
%










0
%Price


1
%










4
%Currency


1
%










(1
)%Other


7
%










8
%Operating profit


141



155



(14
)


303



332



(29
)Operating margin


11.8
%


14.3
%






12.8
%


15.6
%Special (charges) gains


(8
)


(3
)


(5
)


(7
)


(4
)


(3
)Earnings from continuing
    operations before tax and minority interests


157



149



8



328



342



(14
)Depreciation and amortization


41



39



2



79



73



6          48




---



##### Table of Contents



Technical
    Polymers Ticona
  Three Months Ended


Six Months EndedChange








ChangeJune 30, 2006


June 30, 2005


in $


June 30, 2006


June 30, 2005


in $(In $ millions)(Unaudited)Net sales


230



223



7



461



462



(1
)Net sales variance:Volume


7
%










4
%Price


(2
)%










0
%Currency


0
%










(2
)%Other


(2
)%










(2
)%Operating profit


38



5



33



79



44



35Operating margin


16.5
%


2.2
%






17.1
%


9.5
%Special (charges) gains


2



(20
)


22



4



(21
)


25Earnings from continuing
    operations before tax and minority interests


53



22



31



109



73



36Depreciation and amortization


16



14



2



32



29



3          49




---



##### Table of Contents



Acetate
    Products
  Three Months Ended


Six Months EndedChange








ChangeJune 30, 2006


June 30, 2005


in $


June 30, 2006


June 30, 2005


in $(In $ millions)(Unaudited)Net sales


176



172



4



343



337



6Net sales variance:Volume


(5
)%










(5
)%Price


7
%










7
%Currency


0
%










0
%Other


0
%










0
%Operating profit


29



10



19



52



20



32Operating margin


16.5
%


5.8
%






15.2
%


5.9
%Special (charges) gains


















(1
)


1Earnings from continuing
    operations before tax and minority interests


50



12



38



73



22



51Depreciation and amortization


5



9



(4
)


12



18



(6
)          50




---



##### Table of Contents



Performance
    Products
  Three Months Ended


Six Months EndedChange








ChangeJune 30, 2006


June 30, 2005


in $


June 30, 2006


June 30, 2005


in $(In $ millions)(Unaudited)Net sales


48



47



1



97



94



3Net sales variance:Volume


13
%










18
%Price


(11
)%










(11
)%Currency


0
%










(4
)%Other


0
%










0
%Operating profit


16



15



1



33



28



5Operating margin


33.3
%


31.9
%






34.0
%


29.8
%Special (charges) gains






















Earnings from continuing
    operations before tax and minority interests


17



14



3



32



26



6Depreciation and amortization


4



3



1



8



6



2   ®
      Other
    Activities
       51




---



##### Table of Contents



Liquidity
    and Capital Resources
    Cash
    Flows
    Net Cash
    Provided by Operating Activities
    Net Cash
    Used in Investing Activities
     52




---



##### Table of Contents



Net Cash
    (Used in)/Provided by Financing Activities
    
    Borrowings under the term loan facility of $1,135 million.
    Contribution from parent, net and Distribution to parent of
    $572 million and $581 million, respectively.
    Redemption and related premiums of the senior subordinated notes
    of $572 million.
    Repayment of floating rate term loan, including related premium,
    of $354 million.  Liquidity
    Debt
      Contractual Debt Obligations.
  Remaining


2007-


2009-


2011 andFixed Contractual Debt Obligations

Total


2006


2008


2010


Thereafter(In $ millions)Term Loan Facilities


1,718



9



35



35



1,639Interest Payments on Debt(3)


1,633



122



480



449



582Senior Subordinated Notes(1)


962















962Other Debt(3)


414



146



19



39



210Total Fixed Contractual Debt
    Obligations


4,727



277



534



523



3,393     (1)
    
    Does not include $3 million of premium.(2)
    
    Does not include a $2 million reduction due to purchase
    accounting.(3)
    
    For future interest expenses, we assumed no change in variable
    rates. (See Note 10 for the applicable interest rates.)  Senior Credit Facilities.
   53




---



##### Table of Contents



Deferred
    compensation
    Domination
    Agreement and Squeeze-Out
  Form 10-K
      Ausgleichszahlung)
 54




---



##### Table of Contents



(Ausgleichszahlung) (Ausgleichszahlung)
    and/or and/or
  Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies and Estimates
    Form 10-K Form 10-K
  Form 10-K
  Recent
    Accounting Pronouncements
  Form 10-Q
 55




---



##### Table of Contents



Factors
    That May Affect Future Results And Financial Condition
    
    changes in general economic, business, political and regulatory
    conditions in the countries or regions in which we operate;
    the length and depth of product and industry business cycles
    particularly in the automotive, electrical, electronics and
    construction industries;
    changes in the price and availability of raw materials,
    particularly changes in the demand for, supply of, and market
    prices of fuel oil, natural gas, coal, electricity and
    petrochemicals such as ethylene, propylene and butane, including
    changes in production quotas in OPEC countries and the
    deregulation of the natural gas transmission industry in Europe;
    the ability to pass increases in raw material prices on to
    customers or otherwise improve margins through price increases;
    the ability to maintain plant utilization rates and to implement
    planned capacity additions and expansions;
    the ability to reduce production costs and improve productivity
    by implementing technological improvements to existing plants;
    the existence of temporary industry surplus production capacity
    resulting from the integration and
    start-up of
    new world-scale plants;
    increased price competition and the introduction of competing
    products by other companies;
    the ability to develop, introduce and market innovative
    products, product grades and applications, particularly in the
    Ticona and Performance Products segments of our business;
    changes in the degree of patent and other legal protection
    afforded to our products;
    compliance costs and potential disruption or interruption of
    production due to accidents or other unforeseen events or delays
    in construction of facilities;
    potential liability for remedial actions under existing or
    future environmental regulations;
    potential liability resulting from pending or future litigation,
    or from changes in the laws, regulations or policies of
    governments or other governmental activities in the countries in
    which we operate;
    changes in currency exchange rates and interest rates;
    changes in the composition or restructuring of us or our
    subsidiaries and the successful completion of acquisitions,
    divestitures and venture activities;
    inability to successfully integrate current and future
    acquisitions;
    pending or future challenges to the Domination
    Agreement; and
    various other factors, both referenced and not referenced in
    this document.   56




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk  Form 10-K
  Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
    Rules 13a-15(e) 15d-15(e)
  Changes
    in Internal Control Over Financial Reporting
          Form 10-K.
   57




---



##### Table of Contents



58




---



##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Plumbing
    Actions
  Form 10-K
  Sorbates
    Antitrust Actions
  Form 10-K
  Shareholder
    Litigation
  (Ausgleich)
  Other
    Matters
  Form 10-K
  Item 1A.
    Risk
    Factors  Form 10-K
 59




---



##### Table of Contents



Because
    our Sponsor will continue to be able to significantly influence
    us as long as it holds at least 25% of the total voting power of
    Celanese Corporation Series A common stock, the influence
    of Celanese Corporations public shareholders over
    significant corporate actions may be limited, and conflicts of
    interest between our Sponsor and Celanese Corporation or you
    could arise in the future.
  Form 10-K
  The
    disposition by the Original Blackstone Shareholders of at least
    90% of their equity interest will satisfy a vesting condition
    under our deferred compensation plan.
    Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities   60




---



##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information    Item 6.
    Exhibits  ExhibitNumber

Description3
.1

Certificate of Formation of
    Registrant (incorporated by reference to Exhibit 3.3 to the
    Form S-4
    filed with the SEC on February 7, 2005 (the
    Form S-4)).3
.2

Limited Liability Company
    Agreement of Registrant (incorporated by reference to
    Exhibit 3.4 to the
    Form S-4).4
.1

Indenture, dated as of
    June 8, 2004, among BCP Caylux Holdings Luxembourg S.C.A.,
    BCP Crystal Holdings Ltd. 2 and The Bank of New York, as trustee
    (incorporated by reference to Exhibit 10.15 to the
    Registration Statement on
    Form S-1
    of Celanese Corporation filed with the SEC on November 3,
    2004 (the
    Form S-1)).4
.2

Registration Rights Agreement,
    dated as of June 3, 2004, among BCP Caylux Holdings
    Luxembourg S.C.A., BCP Crystal Holdings Ltd 2, Morgan Stanley
    & Co. Incorporated, Deutsche Bank Securities Inc. and Banc
    of America Securities LLC as representatives of the initial
    purchasers (incorporated by reference to Exhibit 4.2 to the
    Form S-4).4
.3

Registration Rights Agreement,
    dated as of July 1, 2004, among BCP Caylux Holdings
    Luxembourg S.C.A., BCP Crystal Holdings Ltd. 2, Morgan Stanley
    & Co. Incorporated and Banc of America Securities LLC
    (incorporated by reference to Exhibit 4.3 to the
    Form S-4).4
.4

Supplemental Indenture, dated as
    of October 5, 2004, among BCP Crystal US Holdings Corp.,
    BCP Caylux Holdings Luxembourg S.C.A., BCP Crystal Holdings Ltd.
    2 and The Bank of New York, as trustee (incorporated by
    reference to the Exhibit 10.16 to
    Form S-1).4
.5

Supplemental Indenture, dated as
    of October 5, 2004, among BCP Crystal US Holdings Corp.,
    the New Guarantors and The Bank of New York, as trustee
    (incorporated by reference to Exhibit  10.17 to the
    Form S-1).12


Computation of ratio of earnings
    to fixed charges (filed herewith). 61




---



##### Table of Contents



ExhibitNumber

Description31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (filed herewith).31
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (filed herewith).32
.1

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002 (filed herewith).32
.2

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002 (filed herewith).    62




---



##### Table of Contents



SIGNATURES      By:
    /s/  David
    N. Weidman    Title:
    President and Chief Executive Officer    By:
    /s/  John
    J. Gallagher III   Title:
    Executive Vice President and       63