##### 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 1934 
|  
|   |  | For the quarterly period ended March 31, 2006                                               
|  
|or
|  
|o  |  | 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)




10-Q 10-Q


þ o


12b-2


o o þ


12b-2


o þ


10-Q,










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##### 










CELANESE HOLDINGS LLC


Form 10-Q


For the Quarterly Period Ended March 31, 2006


TABLE OF CONTENTS


|                                                        |  |                                                                                           |    |                                                                                                            |    |      |   | 
|------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | -- | ---------------------------------------------------------------------------------------------------------- | -- | ---- | - | 
|                                                        |  |                                                                                           |    |                                                                                                            |    | Page |  
|                                                        |  |                                                                                           |    |                                                                                                            |    |      |  
|                                                        |  | Part I  Financial Information                                                            
|Item 1.                                                 |  | Financial Statements                                                                      |    |                                                                                                            |    |     
|                                                        |  | a)                                                                                        |    | Unaudited Consolidated Statements of
    Operations for the three months ended March 31, 2006 and
    2005 |    |      | 2 | 
|                                                        |  | b)                                                                                        |    | Consolidated Balance Sheets as of
    March 31, 2006 and December 31, 2005                                 |    |      | 3 | 
|                                                        |  | c)                                                                                        |    | Unaudited Consolidated Statements of Shareholders Equity
    for the three months ended March 31, 2006    |    |      | 4 | 
|                                                        |  | d)                                                                                        |    | Unaudited Consolidated Statements of Cash
    Flows for the three months ended March 31, 2006 and 2005     |    |      | 5 | 
|                                                        |  | e)                                                                                        |    | Notes to the Unaudited Interim Consolidated
    Financial Statements                                       |    |      | 6 | 
|Item 2.                                                 |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations |    |                                                                                                            | 37 |     
|Item 3.                                                 |  | Quantitative and Qualitative Disclosures
    about Market Risk                            |    |                                                                                                            | 52 |     
|Item 4.                                                 |  | Controls and Procedures                                                                   |    |                                                                                                            | 52 |     
|                                                        |  | Part II  Other
    Information                                                           
|Item 1.                                                 |  | Legal Proceedings                                                                         |    |                                                                                                            | 54 |     
|Item 1A.                                                |  | Risk Factors                                                                              |    |                                                                                                            | 54 |     
|Item 2.                                                 |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                           |    |                                                                                                            | 56 |     
|Item 3.                                                 |  | Defaults Upon Senior Securities                                                           |    |                                                                                                            | 56 |     
|Item 4.                                                 |  | Submission of Matters to a Vote of Security
    Holders                                   |    |                                                                                                            | 56 |     
|Item 5.                                                 |  | Other Information                                                                         |    |                                                                                                            | 56 |     
|Item 6.                                                 |  | Exhibits                                                                                  |    |                                                                                                            | 56 |     
|Signatures                                              |  |                                                                                           | 58 |                                                                                                           
|Certifications                                          |  |                                                                                           |    |                                                                                                           
|EX-12:COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
|EX-31.1: CERTIFICATION                                 
|EX-31.2: CERTIFICATION                                 
|EX-32.1: CERTIFICATION                                 
|EX-32.2: CERTIFICATION                                 



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##### Table of Contents






CELANESE HOLDINGS LLC AND SUBSIDIARIES


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                   |                                                                           |                            |        |     |                    |  |        |     |  
|-------------------------------------------------- | ------------------------------------------------------------------------- | -------------------------- | ------ | --- | ------------------ |  | ------ | --- | -
|                                                   |                                                                           | Three Months Ended         |        |     | Three Months Ended | 
|                                                   |                                                                           | March 31, 2006             |        |     | March 31, 2005     | 
|                                                   |                                                                           |                            |        |     |                    | 
|                                                   |                                                                           | (In $ millions, except for |       
|                                                   |                                                                           | share and per share data)  |       
|Net sales                                          |                                                                           |                            | 1,652  |     |                    |  | 1,478  |    
|Cost of sales                                      |                                                                           |                            | (1,285 | )   |                    |  | (1,106 | )  
|                                                   |                                                                           |                            |        |     |                    | 
|Gross profit                                       |                                                                           |                            | 367    |     |                    |  | 372    |    
|Selling, general and administrative expenses       |                                                                           |                            | (148   | )   |                    |  | (156   | )  
|Research and development expenses                  |                                                                           |                            | (18    | )   |                    |  | (23    | )  
|Special (charges) gains:                           |                                                                           |                            |        |     |                    |  |        |    
|                                                   | Insurance recoveries associated with plumbing cases                       |                            |        | 1   |                    |  |        |    |  
|                                                   | Restructuring, impairment and other special (charges) gains               |                            |        | (1  | )                  |  |        | (38 | )
|Foreign exchange gain, net                         |                                                                           |                            |       |     |                    |  | 3      |    
|Gain on disposition of assets, net                 |                                                                           |                            |       |     |                    |  | 1      |    
|                                                   |                                                                           |                            |        |     |                    | 
|                                                   | Operating profit                                                          |                            |        | 201 |                    |  |        | 159 |  
|Equity in net earnings of affiliates               |                                                                           |                            | 21     |     |                    |  | 15     |    
|Interest expense                                   |                                                                           |                            | (61    | )   |                    |  | (140   | )  
|Interest income                                    |                                                                           |                            | 8      |     |                    |  | 10     |    
|Other income, net                                  |                                                                           |                            | 6      |     |                    |  | 3      |    
|                                                   |                                                                           |                            |        |     |                    | 
|                                                   | Earnings from continuing operations before tax and minority
    interests |                            |        | 175 |                    |  |        | 47  |  
|Income tax provision                               |                                                                           |                            | (49    | )   |                    |  | (17    | )  
|                                                   |                                                                           |                            |        |     |                    | 
|                                                   | Earnings from continuing operations before minority interests             |                            |        | 126 |                    |  |        | 30  |  
|Minority interests                                 |                                                                           |                            |       |     |                    |  | (25    | )  
|                                                   |                                                                           |                            |        |     |                    | 
|                                                   | Earnings from continuing operations                                       |                            |        | 126 |                    |  |        | 5   |  
|Earnings from operation of discontinued operations |                                                                           |                            | 1      |     |                    |  | 10     |    
|                                                   |                                                                           |                            |        |     |                    | 
|Net earnings                                       |                                                                           |                            | 127    |     |                    |  | 15     |    
|                                                   |                                                                           |                            |        |     |                    | 



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   |  |       |      |     | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ---------------------- | ----- | ---- | ----------------- |  | ----- | ---- | --- | 
|                                                                                                                                                                 |                                                                                                   | As of                  |       |      | As of             | 
|                                                                                                                                                                 |                                                                                                   | March 31, 2006         |       |      | December 31, 2005 | 
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|                                                                                                                                                                 |                                                                                                   | (Unaudited)            |       |      |                  
|                                                                                                                                                                 |                                                                                                   | (In $ millions)        |      
|ASSETS                                                                                                                                                           |                                                                                                   |                        |       |      |                   |  |       |     
|Current assets:                                                                                                                                                  |                                                                                                   |                        |       |      |                   |  |       |     
|                                                                                                                                                                 | Cash and cash equivalents                                                                         |                        |       | 311  |                   |  |       | 389  |    
|                                                                                                                                                                 | Restricted cash                                                                                   |                        |       | 42   |                   |  |       |     |    
|                                                                                                                                                                 | Receivables:                                                                                      |                        |       |      |                   |  |       |      |    
|                                                                                                                                                                 |                                                                                                   | Trade receivables, net |       |      | 1,000             |  |       |      | 919 | 
|                                                                                                                                                                 |                                                                                                   | Other receivables      |       |      | 549               |  |       |      | 486 | 
|                                                                                                                                                                 | Inventories                                                                                       |                        |       | 678  |                   |  |       | 661  |    
|                                                                                                                                                                 | Deferred income taxes                                                                             |                        |       | 31   |                   |  |       | 37   |    
|                                                                                                                                                                 | Other assets                                                                                      |                        |       | 78   |                   |  |       | 91   |    
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Total current assets                                                                                                                                             |                                                                                                   |                        | 2,689 |      |                   |  | 2,583 |     
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Investments                                                                                                                                                      |                                                                                                   |                        | 793   |      |                   |  | 775   |     
|Property, plant and equipment, net of accumulated depreciation
    of $500 million and $444 million as of March 31,
    2006 and December 31, 2005, respectively |                                                                                                   |                        | 2,035 |      |                   |  | 2,040 |     
|Deferred income taxes                                                                                                                                            |                                                                                                   |                        | 121   |      |                   |  | 139   |     
|Other assets                                                                                                                                                     |                                                                                                   |                        | 460   |      |                   |  | 474   |     
|Goodwill                                                                                                                                                         |                                                                                                   |                        | 928   |      |                   |  | 949   |     
|Intangible assets, net                                                                                                                                           |                                                                                                   |                        | 487   |      |                   |  | 481   |     
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Total assets                                                                                                                                                     |                                                                                                   |                        | 7,513 |      |                   |  | 7,441 |     
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|                                                                                                                                                                
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                             |                                                                                                   |                        |       |      |                   |  |       |     
|Current liabilities:                                                                                                                                             |                                                                                                   |                        |       |      |                   |  |       |     
|                                                                                                                                                                 | Short-term borrowings and current installments of long-term
    debt  third party and affiliates |                        |       | 212  |                   |  |       | 155  |    
|                                                                                                                                                                 | Trade payables  third party and affiliates                                                       |                        |       | 745  |                   |  |       | 811  |    
|                                                                                                                                                                 | Other current liabilities                                                                         |                        |       | 762  |                   |  |       | 787  |    
|                                                                                                                                                                 | Deferred income taxes                                                                             |                        |       | 16   |                   |  |       | 36   |    
|                                                                                                                                                                 | Income taxes payable                                                                              |                        |       | 245  |                   |  |       | 224  |    
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Total current liabilities                                                                                                                                        |                                                                                                   |                        | 1,980 |      |                   |  | 2,013 |     
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Long-term debt                                                                                                                                                   |                                                                                                   |                        | 2,918 |      |                   |  | 2,903 |     
|Deferred income taxes                                                                                                                                            |                                                                                                   |                        | 287   |      |                   |  | 285   |     
|Benefit obligations                                                                                                                                              |                                                                                                   |                        | 1,116 |      |                   |  | 1,126 |     
|Other liabilities                                                                                                                                                |                                                                                                   |                        | 420   |      |                   |  | 440   |     
|Minority interests                                                                                                                                               |                                                                                                   |                        | 65    |      |                   |  | 64    |     
|Commitments and contingencies                                                                                                                                    |                                                                                                   |                        |       |      |                   |  |       |     
|Shareholders equity:                                                                                                                                            |                                                                                                   |                        |       |      |                   |  |       |     
|                                                                                                                                                                 | Additional paid-in capital                                                                        |                        |       | 813  |                   |  |       | 807  |    
|                                                                                                                                                                 | Retained earnings                                                                                 |                        |       | 274  |                   |  |       | 156  |    
|                                                                                                                                                                 | Loan to shareholder                                                                               |                        |       | (227 | )                 |  |       | (227 | )  
|                                                                                                                                                                 | Accumulated other comprehensive income (loss), net                                                |                        |       | (133 | )                 |  |       | (126 | )  
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Total shareholders equity                                                                                                                                       |                                                                                                   |                        | 727   |      |                   |  | 610   |     
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 
|Total liabilities and shareholders equity                                                                                                                       |                                                                                                   |                        | 7,513 |      |                   |  | 7,441 |     
|                                                                                                                                                                 |                                                                                                   |                        |       |      |                   | 



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS
EQUITY


|                                         |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |   |      |   |   |  |     |     |     |  
|---------------------------------------- | ---------------------------------- | --------------------------------------- | - | ---------- | ------- |  | --- | ----------- | ------------- |  | -------------- | --- | - | ----------- | ---- | - | ------------- | - | ---- | - | - |  | --- | --- | --- | -
|                                         |                                    |                                         |   |            |         |  |     | Accumulated |               |  |                |     |  
|                                         |                                    |                                         |   |            |         |  |     | Other       |               |  |                |     |  
|                                         |                                    |                                         |   | Additional |         |  |     |             | Comprehensive |  |                |     |   | Total       |     
|                                         |                                    | Common                                  |   |            | Paid-In |  |     | Retained    |               |  | Income (Loss), |     |   | Loan to     |      |   | Shareholders |  
|                                         |                                    | Stock                                   |   |            | Capital |  |     | Earnings    |               |  | Net            |     |   | Shareholder |      |   | Equity        |  
|                                         |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |  
|                                         |                                    | (In $ millions)                         |  
|Balance at December 31, 2005             |                                    |                                         |  |            |         |  | 807 |             |               |  | 156            |     |   |             | (126 | ) |               |   | (227 | ) |   |  | 610 |    
|Comprehensive income (loss), net of tax: |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |   |      |   |   |  |     |    
|                                         | Net earnings                       |                                         |   |           |         |  |     |            |               |  |                | 127 |   |             |      |  |               |   |      |  |   |  |     | 127 |    
|                                         | Other comprehensive income (loss): |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |   |      |   |   |  |     |     |    
|                                         |                                    | Unrealized gain on securities           |   |            |        |  |     |             |              |  |                |     |  |             |      |   | 1             |   |      |   |  |  |     |     | 1   |  
|                                         |                                    | Unrealized gain on derivative contracts |   |            |        |  |     |             |              |  |                |     |  |             |      |   | 4             |   |      |   |  |  |     |     | 4   |  
|                                         |                                    | Additional minimum pension liability    |   |            |        |  |     |             |              |  |                |     |  |             |      |   | (1            | ) |      |   |  |  |     |     | (1  | )
|                                         |                                    | Foreign currency translation            |   |            |        |  |     |             |              |  |                |     |  |             |      |   | (11           | ) |      |   |  |  |     |     | (11 | )
|                                         |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |  
|                                         |                                    | Other comprehensive income (loss)       |   |            |        |  |     |             |              |  |                |     |  |             |      |   | (7            | ) |      |   |  |  |     |     | (7  | )
|                                         |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |  
|Comprehensive income                     |                                    |                                         |  |            |         |  |    |             |               |  |               |     |   |             |     |   |               |   |     |   |   |  | 120 |    
|Indemnification of demerger liability    |                                    |                                         |  |            |         |  | 1   |             |               |  |               |     |   |             |     |   |               |   |      |   |   |  | 1   |    
|Distribution to Parent                   |                                    |                                         |  |            |         |  |    |             |               |  | (9             | )   |   |             |     |   |               |   |     |   |   |  | (9  | )  
|Stock-based compensation                 |                                    |                                         |  |            |         |  | 5   |             |               |  |               |     |   |             |     |   |               |   |     |   |   |  | 5   |    
|                                         |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |  
|Balance at March 31, 2006                |                                    |                                         |  |            |         |  | 813 |             |               |  | 274            |     |   |             | (133 | ) |               |   | (227 | ) |   |  | 727 |    
|                                         |                                    |                                         |   |            |         |  |     |             |               |  |                |     |   |             |      |   |               |  



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                  |                                                                        |                                             |   |     |                |   |     |       |      |  
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------- | - | --- | -------------- | - | --- | ----- | ---- | -
|                                                                                                  |                                                                        | Three Months                                |   |     | Three Months   |  
|                                                                                                  |                                                                        | Ended                                       |   |     | Ended          |  
|                                                                                                  |                                                                        | March 31, 2006                              |   |     | March 31, 2005 |  
|                                                                                                  |                                                                        |                                             |   |     |                |  
|                                                                                                  |                                                                        | (In $ millions)                             |  
|Operating activities:                                                                             |                                                                        |                                             |   |     |                |   |     |      
|                                                                                                  | Net earnings                                                           |                                             |   | 127 |                |   |     | 15    |     
|Adjustments to reconcile net earnings to net cash provided by
    (used in) operating activities: |                                                                        |                                             |   |     |                |   |     |      
|                                                                                                  | Special (charges) gains, net of amounts used                           |                                             |   | (14 | )              |   |     | (10   | )   
|                                                                                                  | Stock-based compensation                                               |                                             |   | 5   |                |   |     |      |     
|                                                                                                  | Depreciation                                                           |                                             |   | 51  |                |   |     | 47    |     
|                                                                                                  | Amortization of intangibles and other assets                           |                                             |   | 19  |                |   |     | 16    |     
|                                                                                                  | Amortization of deferred financing fees                                |                                             |   | 3   |                |   |     | 26    |     
|                                                                                                  | Loss on extinguishment of debt                                         |                                             |   |    |                |   |     | 55    |     
|                                                                                                  | Change in equity of affiliates                                         |                                             |   | (3  | )              |   |     | 21    |     
|                                                                                                  | Deferred income taxes                                                  |                                             |   | 3   |                |   |     | (15   | )   
|                                                                                                  | (Gain) loss on disposition of assets, net                              |                                             |   |    |                |   |     | (1    | )   
|                                                                                                  | (Gain) loss on foreign currency transactions                           |                                             |   | (16 | )              |   |     |      |     
|                                                                                                  | Minority interests                                                     |                                             |   |    |                |   |     | 25    |     
|                                                                                                  | Operating cash provided by (used in) discontinued operations           |                                             |   |    |                |   |     | 17    |     
|                                                                                                  | Changes in operating assets and liabilities:                           |                                             |   |     |                |   |     |       |     
|                                                                                                  |                                                                        | Trade receivables, net                      |   |     | (70            | ) |     |       | (138 | )
|                                                                                                  |                                                                        | Other receivables                           |   |     | (61            | ) |     |       | 33   |  
|                                                                                                  |                                                                        | Prepaid expenses                            |   |     | 14             |   |     |       | (27  | )
|                                                                                                  |                                                                        | Inventories                                 |   |     | (12            | ) |     |       | (12  | )
|                                                                                                  |                                                                        | Trade payables  third party and affiliates |   |     | (73            | ) |     |       | 43   |  
|                                                                                                  |                                                                        | Benefit obligations and other liabilities   |   |     | (20            | ) |     |       | (86  | )
|                                                                                                  |                                                                        | Income taxes payable                        |   |     | 18             |   |     |       | 36   |  
|                                                                                                  |                                                                        | Other, net                                  |   |     | 8              |   |     |       | (13  | )
|                                                                                                  |                                                                        |                                             |   |     |                |  
|                                                                                                  | Net cash provided by (used in) operating activities                    |                                             |   | (21 | )              |   |     | 32    |     
|Investing activities:                                                                             |                                                                        |                                             |   |     |                |   |     |      
|                                                                                                  | Capital expenditures on property, plant and equipment                  |                                             |   | (44 | )              |   |     | (40   | )   
|                                                                                                  | Acquisition of CAG, net of cash acquired                               |                                             |   |    |                |   |     | (2    | )   
|                                                                                                  | Fees associated with acquisitions                                      |                                             |   |    |                |   |     | (7    | )   
|                                                                                                  | Acquisition of Vinamul, net of cash reimbursed                         |                                             |   |    |                |   |     | (208  | )   
|                                                                                                  | Net proceeds from disposal of discontinued operations                  |                                             |   |    |                |   |     | 75    |     
|                                                                                                  | Proceeds from sale of marketable securities                            |                                             |   | 20  |                |   |     | 104   |     
|                                                                                                  | Purchases of marketable securities                                     |                                             |   | (20 | )              |   |     | (27   | )   
|                                                                                                  | Increase in restricted cash                                            |                                             |   | (42 | )              |   |     |      |     
|                                                                                                  |                                                                        |                                             |   |     |                |  
|                                                                                                  | Net cash provided by (used in) investing activities                    |                                             |   | (86 | )              |   |     | (105  | )   
|Financing activities:                                                                             |                                                                        |                                             |   |     |                |   |     |      
|                                                                                                  | Contribution from parent, net                                          |                                             |   |    |                |   |     | 572   |     
|                                                                                                  | Distribution to parent                                                 |                                             |   | (9  | )              |   |     |      |     
|                                                                                                  | Redemption of senior subordinated notes, including related
    premium |                                             |   |    |                |   |     | (572  | )   
|                                                                                                  | Repayment of floating rate term loan, including related premium        |                                             |   |    |                |   |     | (354  | )   
|                                                                                                  | Borrowings under term loan facility                                    |                                             |   |    |                |   |     | 1,135 |     
|                                                                                                  | Short-term borrowings (repayments), net                                |                                             |   | 32  |                |   |     | (10   | )   
|                                                                                                  | Proceeds from long-term debt                                           |                                             |   | 7   |                |   |     | 6     |     
|                                                                                                  | Payments of long-term debt                                             |                                             |   | (5  | )              |   |     | (3    | )   
|                                                                                                  | Fees associated with financings                                        |                                             |   |    |                |   |     | (7    | )   
|                                                                                                  |                                                                        |                                             |   |     |                |  
|                                                                                                  | Net cash provided by (used in) financing activities                    |                                             |   | 25  |                |   |     | 767   |     
|Exchange rate effects on cash                                                                     |                                                                        |                                             | 4 |     |                |   | (22 | )    
|                                                                                                  |                                                                        |                                             |   |     |                |  
|                                                                                                  | Net increase (decrease) in cash and cash equivalents                   |                                             |   | (78 | )              |   |     | 672   |     
|                                                                                                  | Cash and cash equivalents at beginning of period                       |                                             |   | 389 |                |   |     | 838   |     
|                                                                                                  |                                                                        |                                             |   |     |                |  
|                                                                                                  | Cash and cash equivalents at end of period                             |                                             |   | 311 |                |   |     | 1,510 |     
|                                                                                                  |                                                                        |                                             |   |     |                |  



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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

10-Q, (Kommanditgesellschaft, KG)






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    |      
|                 |  | Ended           |      
|                 |  | March 31, 2005  |      
|                 |  |                 |      
|                 |  | (In $ millions) |      
|Net sales        |  |                 | 1,478 | 
|Operating profit |  |                 | 157   | 
|Net earnings     |  |                 | 36    | 







| |            
| | -----------
| | 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

       






(Landgericht)


9



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(Landgericht)


(Landgericht)


Organizational Restructuring


Organizational
Restructuring











|   |                                                  
|-- | -------------------------------------------------
|4. | Initial Public Offering and Concurrent Financings





10



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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.


11



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                                        
|-- | ---------------------------------------
|6. | Acquisitions, Divestitures and Ventures

Acquisitions






|                                 |                     |                 |      |     | 
|-------------------------------- | ------------------- | --------------- | ---- | --- | 
|                                 |                     | Acetex(1)       |     
|                                 |                     |                 |     
|                                 |                     | (In $ millions) |     
|Cash                             |                     |                 | 54   |    
|Inventories                      |                     |                 | 80   |    
|Property, plant, and equipment   |                     |                 | 264  |    
|Goodwill                         |                     |                 | 172  |    
|Intangible assets                |                     |                 | 76   |    
|Debt                             |                     |                 | (316 | )  
|Pensions liabilities             |                     |                 | (28  | )  
|Other current assets/liabilities |                     |                 | (16  | )  
|                                 |                     |                 |     
|                                 | Net assets acquired |                 |      | 286 | 
|                                 |                     |                 |     






|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Acetex purchase price allocation is preliminary. The Company
    expects to finalize the purchase price allocation by
    June 30, 2006.

Divestitures


10-K Accounting for the Impairment or
Disposal of Long-Lived Assets


12



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                 
|-- | ----------------
|7. | Receivables, net

|                                                                 |                 |                 |       |       |                   |  |     |       | 
|---------------------------------------------------------------- | --------------- | --------------- | ----- | ----- | ----------------- |  | --- | ----- | 
|                                                                 |                 | As of           |       |       | As of             | 
|                                                                 |                 | March 31, 2006  |       |       | December 31, 2005 | 
|                                                                 |                 |                 |       |       |                   | 
|                                                                 |                 | (In $ millions) |      
|Trade receivables, net                                           |                 |                 | 1,017 |       |                   |  | 935 |      
|Reinsurance receivables                                          |                 |                 | 142   |       |                   |  | 117 |      
|Other                                                            |                 |                 | 407   |       |                   |  | 369 |      
|                                                                 |                 |                 |       |       |                   | 
|                                                                 | Subtotal        |                 |       | 1,566 |                   |  |     | 1,421 | 
|Allowance for doubtful accounts  third party and
    affiliates |                 |                 | (17   | )     |                   |  | (16 | )    
|                                                                 |                 |                 |       |       |                   | 
|                                                                 | Net receivables |                 |       | 1,549 |                   |  |     | 1,405 | 
|                                                                 |                 |                 |       |       |                   | 



|   |            
|-- | -----------
|8. | Inventories

|                           |                   |                 |     |     |                   |  |     |     | 
|-------------------------- | ----------------- | --------------- | --- | --- | ----------------- |  | --- | --- | 
|                           |                   | As of           |     |     | As of             | 
|                           |                   | March 31, 2006  |     |     | December 31, 2005 | 
|                           |                   |                 |     |     |                   | 
|                           |                   | (In $ millions) |    
|Finished goods             |                   |                 | 513 |     |                   |  | 504 |    
|Work-in-process            |                   |                 | 28  |     |                   |  | 27  |    
|Raw materials and supplies |                   |                 | 137 |     |                   |  | 130 |    
|                           |                   |                 |     |     |                   | 
|                           | Total inventories |                 |     | 678 |                   |  |     | 661 | 
|                           |                   |                 |     |     |                   | 



|   |                               
|-- | ------------------------------
|9. | Goodwill and Intangible Assets

Goodwill


|                        |                       |                 |     |    |          |  |     |        |   |             |          |    |   |       |    |   |       |  |    |    |   |  |     |     |  
|----------------------- | --------------------- | --------------- | --- | -- | -------- |  | --- | ------ | - | ----------- | -------- | -- | - | ----- | -- | - | ----- |  | -- | -- | - |  | --- | --- | -
|                        |                       | Chemical        |     |    | Acetate  |  |     |        |   | Performance |          |    |   |       |   
|                        |                       | Products        |     |    | Products |  |     | Ticona |   |             | Products |    |   | Other |    |   | Total | 
|                        |                       |                 |     |    |          |  |     |        |   |             |          |    |   |       |    |   |       | 
|                        |                       | (In $ millions) |    
|As of December 31, 2005 |                       |                 | 380 |    |          |  | 188 |        |   |             | 285      |    |   |       | 79 |   |       |  | 17 |    |   |  | 949 |    
|                        | Acquisition of Acetex |                 |     | 7  |          |  |     |       |   |             |          |   |   |       |    |  |       |  |    | (1 | ) |  |     | 6   |  
|                        | Acquisition of CAG(1) |                 |     | (9 | )        |  |     | (3     | ) |             |          | (4 | ) |       |    |  |       |  |    |   |   |  |     | (16 | )
|                        | Exchange rate changes |                 |     | (8 | )        |  |     |       |   |             |          | (4 | ) |       |    | 1 |       |  |    |   |   |  |     | (11 | )
|                        |                       |                 |     |    |          |  |     |        |   |             |          |    |   |       |    |   |       | 
|As of March 31, 2006    |                       |                 | 370 |    |          |  | 185 |        |   |             | 277      |    |   |       | 80 |   |       |  | 16 |    |   |  | 928 |    
|                        |                       |                 |     |    |          |  |     |        |   |             |          |    |   |       |    |   |       | 






|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The adjustments recorded during the three months ended
    March 31, 2006 consist primarily of the reversals of
    certain pre-acquisition tax valuation allowances.





13



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Other Intangible
Assets


|                                   |  |                 |      |   |                   |  |     |  
|---------------------------------- |  | --------------- | ---- | - | ----------------- |  | --- | -
|                                   |  | As of           |      |   | As of             | 
|                                   |  | March 31, 2006  |      |   | December 31, 2005 | 
|                                   |  |                 |      |   |                   | 
|                                   |  | (In $ millions) |     
|Trademarks and tradenames          |  |                 | 76   |   |                   |  | 73  |  
|Customer related intangible assets |  |                 | 496  |   |                   |  | 474 |  
|Developed technology               |  |                 | 12   |   |                   |  | 12  |  
|Covenants not to compete           |  |                 | 11   |   |                   |  | 11  |  
|                                   |  |                 |      |   |                   | 
|Total intangible assets, gross     |  |                 | 595  |   |                   |  | 570 |  
|Less: accumulated amortization     |  |                 | (108 | ) |                   |  | (89 | )
|                                   |  |                 |      |   |                   | 
|Total intangible assets, net       |  |                 | 487  |   |                   |  | 481 |  
|                                   |  |                 |      |   |                   | 





|    |     
|--- | ----
|10. | Debt

|                                                                                                                                |          |                                                                                                         |                      |       |                   |       |       |       |     |       | 
|------------------------------------------------------------------------------------------------------------------------------- | -------- | ------------------------------------------------------------------------------------------------------- | -------------------- | ----- | ----------------- | ----- | ----- | ----- | --- | ----- | 
|                                                                                                                                |          | As of                                                                                                   |                      |       | As of             |      
|                                                                                                                                |          | March 31, 2006                                                                                          |                      |       | December 31, 2005 |      
|                                                                                                                                |          |                                                                                                         |                      |       |                   |      
|                                                                                                                                |          | (In $ millions)                                                                                         |                     
|Short-term borrowings and current installments of long-term
    debt  third party and affiliates                               |          |                                                                                                         |                      |       |                   |       |       |      
|Current installments of long-term debt                                                                                          |          |                                                                                                         | 20                   |       |                   |       | 20    |      
|Short-term borrowings, principally comprised of amounts due to
    affiliates                                                   |          |                                                                                                         | 192                  |       |                   |       | 135   |      
|                                                                                                                                |          |                                                                                                         |                      |       |                   |      
|                                                                                                                                |          | Total short-term borrowings and current installments of
    long-term debt  third party and affiliates |                      |       | 212               |       |       |       | 155 |      
|                                                                                                                                |          |                                                                                                         |                      |       |                   |      
|Long-term debt                                                                                                                  |          |                                                                                                         |                      |       |                   |       |       |      
|Senior Credit Facilities: Term loan facility                                                                                    |          |                                                                                                         | 1,712                |       |                   |       | 1,708 |      
|Senior Subordinated Notes 9.625%, due 2014                                                                                      |          |                                                                                                         | 800                  |       |                   |       | 800   |      
|Senior Subordinated Notes 10.375%, due 2014                                                                                     |          |                                                                                                         | 157                  |       |                   |       | 153   |      
|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                             |          |                                                                                                         | 27                   |       |                   |       | 28    |      
|Other borrowings                                                                                                                |          |                                                                                                         | 37                   |       |                   |       | 29    |      
|                                                                                                                                |          |                                                                                                         |                      |       |                   |      
|                                                                                                                                | Subtotal |                                                                                                         |                      | 2,938 |                   |       |       | 2,923 |    
|                                                                                                                                |          | Less: Current installments of long-term debt                                                            |                      |       | 20                |       |       |       | 20  |      
|                                                                                                                                |          |                                                                                                         |                      |       |                   |      
|                                                                                                                                |          |                                                                                                         | Total long-term debt |       |                   | 2,918 |       |       |     | 2,903 | 
|                                                                                                                                |          |                                                                                                         |                      |       |                   |      




14



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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 |    |    | Three Months Ended | 
|                                                                                                    |                        | March 31, 2006     |    |    | March 31, 2005     | 
|                                                                                                    |                        |                    |    |    |                    | 
|                                                                                                    |                        | (In $ millions)    |   
|Accelerated amortization of deferred financing costs on early
    redemption and prepayment of debt |                        |                    |   |    |                    |  | 28 |    
|Premium paid on early redemption of debt                                                            |                        |                    |   |    |                    |  | 74 |    
|Interest expense                                                                                    |                        |                    | 61 |    |                    |  | 38 |    
|                                                                                                    |                        |                    |    |    |                    | 
|                                                                                                    | Total interest expense |                    |    | 61 |                    |  |    | 140 | 
|                                                                                                    |                        |                    |    |    |                    | 



|    |                          
|--- | -------------------------
|11. | Other Current Liabilities

|                              |                                 |                 |     |     |                   |  |     |     | 
|----------------------------- | ------------------------------- | --------------- | --- | --- | ----------------- |  | --- | --- | 
|                              |                                 | As of           |     |     | As of             | 
|                              |                                 | March 31, 2006  |     |     | December 31, 2005 | 
|                              |                                 |                 |     |     |                   | 
|                              |                                 | (In $ millions) |    
|Accrued salaries and benefits |                                 |                 | 152 |     |                   |  | 159 |    
|Environmental liabilities     |                                 |                 | 25  |     |                   |  | 25  |    
|Accrued restructuring         |                                 |                 | 38  |     |                   |  | 44  |    
|Insurance liabilities         |                                 |                 | 115 |     |                   |  | 125 |    
|Accrued legal                 |                                 |                 | 138 |     |                   |  | 133 |    
|Other                         |                                 |                 | 294 |     |                   |  | 301 |    
|                              |                                 |                 |     |     |                   | 
|                              | Total other current liabilities |                 |     | 762 |                   |  |     | 787 | 
|                              |                                 |                 |     |     |                   | 

15



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                    
|--- | -------------------
|12. | Benefit Obligations



|                                        |                           |                    |     |   |                         |  |     |                    |  |  |                    |   |  |  |    |   | 
|--------------------------------------- | ------------------------- | ------------------ | --- | - | ----------------------- |  | --- | ------------------ |  |  | ------------------ | - |  |  | -- | - | 
|                                        |                           | Pension Benefits   |     |   | Postretirement Benefits | 
|                                        |                           |                    |     |   |                         | 
|                                        |                           | Three Months Ended |     |   | Three Months Ended      |  |     | Three Months Ended |  |  | Three Months Ended |  
|                                        |                           | March 31, 2006     |     |   | March 31, 2005          |  |     | March 31, 2006     |  |  | March 31, 2005     |  
|                                        |                           |                    |     |   |                         |  |     |                    |  |  |                    |  
|                                        |                           | (In $ millions)    |    
|Components of net periodic benefit cost |                           |                    |     |   |                         |  |     |                    |  |  |                    |   |  |  |    |  
|Service cost                            |                           |                    | 10  |   |                         |  | 10  |                    |  |  | 1                  |   |  |  | 1  |  
|Interest cost                           |                           |                    | 46  |   |                         |  | 45  |                    |  |  | 5                  |   |  |  | 6  |  
|Expected return on plan assets          |                           |                    | (51 | ) |                         |  | (49 | )                  |  |  |                   |   |  |  |   |  
|Recognized actuarial gain               |                           |                    |    |   |                         |  |    |                    |  |  |                   |   |  |  |   |  
|Settlement loss                         |                           |                    |    |   |                         |  |    |                    |  |  |                   |   |  |  | (1 | )
|                                        |                           |                    |     |   |                         |  |     |                    |  |  |                    |  
|                                        | Net periodic benefit cost |                    |     | 5 |                         |  |     | 6                  |  |  |                    | 6 |  |  |    | 6 | 
|                                        |                           |                    |     |   |                         |  |     |                    |  |  |                    |  









|    |                     
|--- | --------------------
|13. | Shareholders Equity



Accumulated Other
Comprehensive Income (Loss)






|    |                              
|--- | -----------------------------
|14. | Commitments and Contingencies



10-K


16



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Plumbing Actions
















17



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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.




18



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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)


(Landgericht)




(Anfechtungs- und Nichtigkeitsklagen) (Landgericht)


19



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




(Landgericht) (Nichtigkeitsklage) (Landgericht)


(Amtsgericht) (Landgericht) (Amtslöschungsverfahren) (Landgericht) (Amtsgericht)


(Landgericht)




(Abfindung) (Ausgleich) (Spruchverfahren) (Abfindung) (Ausgleich)


Guarantees




20



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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.





| |   |                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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






21



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Plumbing Insurance
Indemnifications


®






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
    April 1, 2006 to April 30, 2012 is estimated to be
    approximately $47 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






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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










23



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                        
|--- | -----------------------
|15. | Special (Charges) Gains



|                                                    |                               |                 |    |   |                |  |     |     |  
|--------------------------------------------------- | ----------------------------- | --------------- | -- | - | -------------- |  | --- | --- | -
|                                                    |                               | Three Months    |    |   | Three Months   | 
|                                                    |                               | Ended           |    |   | Ended          | 
|                                                    |                               | March 31, 2006  |    |   | March 31, 2005 | 
|                                                    |                               |                 |    |   |                | 
|                                                    |                               | (In $ millions) |   
|Employee termination benefits                       |                               |                 | (2 | ) |                |  | (2  | )  
|Plant/office closures                               |                               |                 | 2  |   |                |  | (1  | )  
|                                                    |                               |                 |    |   |                | 
|                                                    | Total restructuring           |                 |    |  |                |  |     | (3  | )
|Insurance recoveries associated with plumbing cases |                               |                 | 1  |   |                |  |    |    
|Other                                               |                               |                 | (1 | ) |                |  | (35 | )  
|                                                    |                               |                 |    |   |                | 
|                                                    | Total special (charges) gains |                 |    |  |                |  |     | (38 | )
|                                                    |                               |                 |    |   |                | 





|                                           |                         |                 |    |    |              |  |    |       |   |  |    |     |  
|------------------------------------------ | ----------------------- | --------------- | -- | -- | ------------ |  | -- | ----- | - |  | -- | --- | -
|                                           |                         | Employee        |    |    |              |  |   
|                                           |                         | Termination     |    |    | Plant/Office |  |    |      
|                                           |                         | Benefits        |    |    | Closures     |  |    | Total |  
|                                           |                         |                 |    |    |              |  |    |       |  
|                                           |                         | (In $ millions) |   
|Restructuring reserve at December 31, 2005 |                         |                 | 51 |    |              |  | 14 |       |   |  | 65 |    
|                                           | Restructuring additions |                 |    | 2  |              |  |    | (2    | ) |  |    |    |  
|                                           | Cash and noncash uses   |                 |    | (8 | )            |  |    | (3    | ) |  |    | (11 | )
|                                           |                         |                 |    |    |              |  |    |       |  
|Restructuring reserve at March 31, 2006    |                         |                 | 45 |    |              |  | 9  |       |   |  | 54 |    
|                                           |                         |                 |    |    |              |  |    |       |  



|    |                                                    
|--- | ---------------------------------------------------
|16. | Stock-based and Other Management Compensation Plans





Deferred compensation




24



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Long-Term Incentive
Plan




Stock-based
compensation








25



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                        |                                                            |                 |   |   |                |  |   |   | 
|--------------------------------------- | ---------------------------------------------------------- | --------------- | - | - | -------------- |  | - | - | 
|                                        |                                                            | Three Months    |   |   | Three Months   | 
|                                        |                                                            | Ended           |   |   | Ended          | 
|                                        |                                                            | March 31, 2006  |   |   | March 31, 2005 | 
|                                        |                                                            |                 |   |   |                | 
|                                        |                                                            | (In $ millions) |  
|Included in reported Operating earnings |                                                            |                 |   |   |                |  |   |  
|Selling, general and administrative     |                                                            |                 | 5 |   |                |  |  |  
|Incremental pro forma                   |                                                            |                 |   |   |                |  |   |  
|Selling, general and administrative     |                                                            |                 |  |   |                |  | 2 |  
|                                        |                                                            |                 |   |   |                | 
|                                        | Actual/pro forma stock-based employee compensation expense |                 |   | 5 |                |  |   | 2 | 
|                                        |                                                            |                 |   |   |                | 



|                                   |  |  |      |  
|---------------------------------- |  |  | ---- | -
|Risk free interest rate            |  |  | 4.0  | %
|Estimated life in years            |  |  | 7.5  |  
|Dividend yield                     |  |  | 0.75 | %
|Volatility                         |  |  | 26.0 | %
|Expected annual forfeiture rate(1) |  |  | 0    | %



|    |                                                                                  
|--- | ---------------------------------------------------------------------------------
|(1) | At March 31, 2006, the expected annual forfeiture rate is
    estimated to be 5%.





|                                                            |  |                                   |    |           |            |  |         |             |  |           |                 |  |  |  |    | 
|----------------------------------------------------------- |  | --------------------------------- | -- | --------- | ---------- |  | ------- | ----------- |  | --------- | --------------- |  |  |  | -- | 
|                                                            |  | Three Months Ended March 31, 2006 |   
|                                                            |  |                                   |   
|                                                            |  |                                   |    | Weighted- |            |  |        
|                                                            |  |                                   |    | Weighted- |            |  | Average |             |  | Aggregate |                
|                                                            |  | Number of                         |    |           | Average    |  |         | Remaining   |  |           | Intrinsic       | 
|                                                            |  | Options                           |    |           | Grant      |  |         | Contractual |  |           | Value           | 
|                                                            |  | (In millions)                     |    |           | Price in $ |  |         | Term        |  |           | (In $ millions) | 
|                                                            |  |                                   |    |           |            |  |         |             |  |           |                 | 
|Outstanding at beginning of period                          |  |                                   | 12 |           |            |  | 16.15   |             |  |           | 9               |  |  |  | 38 | 
|Granted                                                     |  |                                   |   |           |            |  |        |             |  |           |                |  |  |  |   | 
|Exercised                                                   |  |                                   |   |           |            |  |        |             |  |           |                |  |  |  |   | 
|Forfeited                                                   |  |                                   |   |           |            |  |        |             |  |           |                |  |  |  |   | 
|                                                            |  |                                   |    |           |            |  |         |             |  |           |                 | 
|Outstanding at end of period                                |  |                                   | 12 |           |            |  | 16.15   |             |  |           | 9               |  |  |  | 58 | 
|                                                            |  |                                   |    |           |            |  |         |             |  |           |                 | 
|Vested and expected to vest in the future at March 31, 2006 |  |                                   | 10 |           |            |  | 16.14   |             |  |           | 9               |  |  |  | 47 | 
|                                                            |  |                                   |    |           |            |  |         |             |  |           |                 | 
|Options exercisable at end of period                        |  |                                   | 5  |           |            |  | 16.07   |             |  |           | 9               |  |  |  | 24 | 
|                                                            |  |                                   |    |           |            |  |         |             |  |           |                 | 

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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Prior Period Pro Forma
Presentations


Accounting for Stock-Based Compensation 
Transition and Disclosure, an amendment of FASB Statement
No. 123


|                                                                                                                     |  |                 |    |  
|-------------------------------------------------------------------------------------------------------------------- |  | --------------- | -- | -
|                                                                                                                     |  | Three Months    |   
|                                                                                                                     |  | Ended           |   
|                                                                                                                     |  | March 31, 2005  |   
|                                                                                                                     |  |                 |   
|                                                                                                                     |  | Net Earnings    |   
|                                                                                                                     |  | (Loss)          |   
|                                                                                                                     |  |                 |   
|                                                                                                                     |  | (In $ millions) |   
|Net earnings (loss) as reported                                                                                      |  |                 | 15 |  
|Add: 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                                |  |                 | (2 | )
|Pro forma net earnings (loss)                                                                                        |  |                 | 13 |  



|    |             
|--- | ------------
|17. | Income Taxes





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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                  
|--- | -----------------
|18. | Business Segments

|                                                                                 |  |                 |       |  |        |  |         |          |  |             |          |  |       |          |     |       |            |  |       |                |  |  |              |   |  |  |     |   |  |  |       | 
|-------------------------------------------------------------------------------- |  | --------------- | ----- |  | ------ |  | ------- | -------- |  | ----------- | -------- |  | ----- | -------- | --- | ----- | ---------- |  | ----- | -------------- |  |  | ------------ | - |  |  | --- | - |  |  | ----- | 
|                                                                                 |  | Chemical        |       |  |        |  | Acetate |          |  | Performance |          |  | Total |          |     | Other |            |  |       |                | 
|                                                                                 |  | Products        |       |  | Ticona |  |         | Products |  |             | Products |  |       | Segments |     |       | Activities |  |       | Reconciliation |  |  | Consolidated |  
|                                                                                 |  |                 |       |  |        |  |         |          |  |             |          |  |       |          |     |       |            |  |       |                |  |  |              |  
|                                                                                 |  | (In $ millions) |      
|As of and for the three months ended March 31, 2006                              |  |                 |       |  |        |  |         |          |  |             |          |  |       |          |     |       |            |  |       |                |  |  |              |   |  |  |     |   |  |  |       | 
|Sales to external customers                                                      |  |                 | 1,144 |  |        |  | 231     |          |  |             | 167      |  |       |          | 49  |       |            |  | 1,591 |                |  |  | 61           |   |  |  |    |   |  |  | 1,652 | 
|Inter-segment revenues                                                           |  |                 | 25    |  |        |  |        |          |  |             |         |  |       |          |    |       |            |  | 25    |                |  |  |             |   |  |  | (25 | ) |  |  |      | 
|Operating profit                                                                 |  |                 | 162   |  |        |  | 41      |          |  |             | 23       |  |       |          | 17  |       |            |  | 243   |                |  |  | (42          | ) |  |  |    |   |  |  | 201   | 
|Earnings (loss) from continuing operations before tax and
    minority interests |  |                 | 171   |  |        |  | 56      |          |  |             | 23       |  |       |          | 15  |       |            |  | 265   |                |  |  | (90          | ) |  |  |    |   |  |  | 175   | 
|Depreciation and amortization                                                    |  |                 | 38    |  |        |  | 16      |          |  |             | 7        |  |       |          | 4   |       |            |  | 65    |                |  |  | 5            |   |  |  |    |   |  |  | 70    | 
|Capital expenditures                                                             |  |                 | 22    |  |        |  | 5       |          |  |             | 16       |  |       |          |    |       |            |  | 43    |                |  |  | 1            |   |  |  |    |   |  |  | 44    | 
|Total assets                                                                     |  |                 | 3,395 |  |        |  | 1,608   |          |  |             | 725      |  |       |          | 355 |       |            |  | 6,083 |                |  |  | 1,430        |   |  |  |     |   |  |  | 7,513 | 
|As of and for the three months ended March 31, 2005                              |  |                 |       |  |        |  |         |          |  |             |          |  |       |          |     |       |            |  |       |                |  |  |              |   |  |  |     |   |  |  |       | 
|Sales to external customers                                                      |  |                 | 1,015 |  |        |  | 239     |          |  |             | 165      |  |       |          | 47  |       |            |  | 1,466 |                |  |  | 12           |   |  |  |    |   |  |  | 1,478 | 
|Inter-segment revenues                                                           |  |                 | 29    |  |        |  |        |          |  |             |         |  |       |          |    |       |            |  | 29    |                |  |  |             |   |  |  | (29 | ) |  |  |      | 
|Operating profit                                                                 |  |                 | 177   |  |        |  | 39      |          |  |             | 10       |  |       |          | 13  |       |            |  | 239   |                |  |  | (80          | ) |  |  |    |   |  |  | 159   | 
|Earnings (loss) from continuing operations before tax and
    minority interests |  |                 | 193   |  |        |  | 51      |          |  |             | 10       |  |       |          | 12  |       |            |  | 266   |                |  |  | (219         | ) |  |  |    |   |  |  | 47    | 
|Depreciation and amortization                                                    |  |                 | 34    |  |        |  | 15      |          |  |             | 9        |  |       |          | 3   |       |            |  | 61    |                |  |  | 2            |   |  |  |    |   |  |  | 63    | 
|Capital expenditures                                                             |  |                 | 18    |  |        |  | 14      |          |  |             | 5        |  |       |          | 2   |       |            |  | 39    |                |  |  | 1            |   |  |  |    |   |  |  | 40    | 
|Total 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 March 31, 2005, these amounts
    represent the balances as of December 31, 2005.



|    |                                                                       
|--- | ----------------------------------------------------------------------
|19. | Transactions and Relationships with Affiliates and Related
    Parties







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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                              
|--- | ---------------------------------------------
|20. | Consolidating Guarantor Financial Information



Non-Guarantors.


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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


UNAUDITED CONSOLIDATING STATEMENT OF OPERATIONS
INFORMATION


|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              |  |      |      |   |  |        |     |  
|-------------------------------------------------- | -------------------------------------------------------------------------------- | --------------------------------- | --- | --- | ------ |  | ---------- | ---------- |  | ---- | ---------- | -- | - | ------------ | ----- | --- | ------------ |  | ---- | ---- | - |  | ------ | --- | -
|                                                   |                                                                                  | Three Months Ended March 31, 2006 |    
|                                                   |                                                                                  |                                   |    
|                                                   |                                                                                  | Parent                            |     |     |        |  | Subsidiary |            |  | Non- |            |    |  
|                                                   |                                                                                  | Guarantor                         |     |     | Issuer |  |            | Guarantors |  |      | Guarantors |    |   | Eliminations |       |     | Consolidated | 
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|                                                   |                                                                                  | (In $ millions)                   |    
|Net sales                                          |                                                                                  |                                   |    |     |        |  |           |            |  |      | 753        |    |   |              | 1,176 |     |              |  | (277 | )    |   |  | 1,652  |    
|Cost of sales                                      |                                                                                  |                                   |    |     |        |  |           |            |  |      | (591       | )  |   |              | (971  | )   |              |  | 277  |      |   |  | (1,285 | )  
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|Gross profit                                       |                                                                                  |                                   |    |     |        |  |           |            |  |      | 162        |    |   |              | 205   |     |              |  |     |      |   |  | 367    |    
|Selling, general and administrative expenses       |                                                                                  |                                   |    |     |        |  |            |            |  |      | (65        | )  |   |              | (84   | )   |              |  | 1    |      |   |  | (148   | )  
|Research and development expenses                  |                                                                                  |                                   |    |     |        |  |           |            |  |      | (10        | )  |   |              | (8    | )   |              |  |     |      |   |  | (18    | )  
|Special (charges) gains:                           |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              |  |      |      |   |  |        |    
|                                                   | Insurance recoveries associated with plumbing cases                              |                                   |     |    |        |  |            |           |  |      |            |   |   |              |       | 1   |              |  |      |     |   |  |        | 1   |  
|                                                   | Restructuring, impairment and other special (charges) gains                      |                                   |     |    |        |  |            |           |  |      |            | (2 | ) |              |       | 1   |              |  |      |     |   |  |        | (1  | )
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|                                                   | Operating profit (loss)                                                          |                                   |     |    |        |  |            |           |  |      |            | 85 |   |              |       | 115 |              |  |      | 1    |   |  |        | 201 |  
|Equity in net earnings of affiliates               |                                                                                  |                                   | 127 |     |        |  | 140        |            |  |      | 38         |    |   |              | 13    |     |              |  | (297 | )    |   |  | 21     |    
|Interest expense                                   |                                                                                  |                                   |    |     |        |  | (53        | )          |  |      | (40        | )  |   |              | (11   | )   |              |  | 43   |      |   |  | (61    | )  
|Interest income                                    |                                                                                  |                                   |    |     |        |  | 39         |            |  |      | 3          |    |   |              | 9     |     |              |  | (43  | )    |   |  | 8      |    
|Other income (expense), net                        |                                                                                  |                                   |    |     |        |  | 1          |            |  |      |           |    |   |              | 5     |     |              |  |     |      |   |  | 6      |    
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|                                                   | Earnings (loss) from continuing operations before tax and
    minority interests |                                   |     | 127 |        |  |            | 127        |  |      |            | 86 |   |              |       | 131 |              |  |      | (296 | ) |  |        | 175 |  
|Income tax benefit (provision)                     |                                                                                  |                                   |    |     |        |  |           |            |  |      | (8         | )  |   |              | (41   | )   |              |  |     |      |   |  | (49    | )  
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|                                                   | Earnings (loss) from continuing operations before minority
    interests         |                                   |     | 127 |        |  |            | 127        |  |      |            | 78 |   |              |       | 90  |              |  |      | (296 | ) |  |        | 126 |  
|Minority interests                                 |                                                                                  |                                   |    |     |        |  |           |            |  |      |           |    |   |              |      |     |              |  |     |      |   |  |       |    
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|                                                   | Earnings (loss) from continuing operations                                       |                                   |     | 127 |        |  |            | 127        |  |      |            | 78 |   |              |       | 90  |              |  |      | (296 | ) |  |        | 126 |  
|Earnings from operation of discontinued operations |                                                                                  |                                   |    |     |        |  |           |            |  |      | 1          |    |   |              |      |     |              |  |     |      |   |  | 1      |    
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 
|                                                   | Net earnings (loss)                                                              |                                   |     | 127 |        |  |            | 127        |  |      |            | 79 |   |              |       | 90  |              |  |      | (296 | ) |  |        | 127 |  
|                                                   |                                                                                  |                                   |     |     |        |  |            |            |  |      |            |    |   |              |       |     |              | 

30



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##### 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 March 31, 2005 |   
|                                                   |                                                                                  |                                   |   
|                                                   |                                                                                  | Parent                            |    |    |        |  | Subsidiary |            |   | Non- |            |    |  
|                                                   |                                                                                  | Guarantor                         |    |    | Issuer |  |            | Guarantors |   |      | Guarantors |    |   | Eliminations |       |     | Consolidated | 
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 
|                                                   |                                                                                  | (In $ millions)                   |   
|Net sales                                          |                                                                                  |                                   |   |    |        |  |           |            |   |      | 719        |    |   |              | 1,035 |     |              |  | (276 | )    |   |  | 1,478  |    
|Cost of sales                                      |                                                                                  |                                   |   |    |        |  |           |            |   |      | (596       | )  |   |              | (786  | )   |              |  | 276  |      |   |  | (1,106 | )  
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 
|Gross profit                                       |                                                                                  |                                   |   |    |        |  |           |            |   |      | 123        |    |   |              | 249   |     |              |  |     |      |   |  | 372    |    
|Selling, general and administrative expenses       |                                                                                  |                                   |   |    |        |  | (10        | )          |   |      | (73        | )  |   |              | (74   | )   |              |  | 1    |      |   |  | (156   | )  
|Research and development expenses                  |                                                                                  |                                   |   |    |        |  |           |            |   |      | (9         | )  |   |              | (14   | )   |              |  |     |      |   |  | (23    | )  
|Special (charges) gains:                           |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              |  |      |      |   |  |        |    
|                                                   | Insurance recoveries associated with plumbing cases                              |                                   |    |   |        |  |            |           |   |      |            |   |   |              |       |    |              |  |      |     |   |  |        |    |  
|                                                   | Restructuring, impairment and other special (charges) gains                      |                                   |    |   |        |  |            | (35        | ) |      |            | (2 | ) |              |       | (1  | )            |  |      |     |   |  |        | (38 | )
|Foreign exchange gain (loss), net                  |                                                                                  |                                   |   |    |        |  | 3          |            |   |      |           |    |   |              |      |     |              |  |     |      |   |  | 3      |    
|Gain on disposition of assets, net                 |                                                                                  |                                   |   |    |        |  |           |            |   |      | 1          |    |   |              |      |     |              |  |     |      |   |  | 1      |    
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 
|                                                   | Operating profit (loss)                                                          |                                   |    |   |        |  |            | (42        | ) |      |            | 40 |   |              |       | 160 |              |  |      | 1    |   |  |        | 159 |  
|Equity in net earnings of
    affiliates           |                                                                                  |                                   | 15 |    |        |  | 172        |            |   |      | 56         |    |   |              | 7     |     |              |  | (235 | )    |   |  | 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 |                                   |    | 15 |        |  |            | 15         |   |      |            | 65 |   |              |       | 186 |              |  |      | (234 | ) |  |        | 47  |  
|Income tax benefit (provision)                     |                                                                                  |                                   |   |    |        |  |           |            |   |      | (2         | )  |   |              | (15   | )   |              |  |     |      |   |  | (17    | )  
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 
|                                                   | Earnings (loss) from continuing operations before minority
    interests         |                                   |    | 15 |        |  |            | 15         |   |      |            | 63 |   |              |       | 171 |              |  |      | (234 | ) |  |        | 30  |  
|Minority interests                                 |                                                                                  |                                   |   |    |        |  |           |            |   |      |           |    |   |              | (25   | )   |              |  |     |      |   |  | (25    | )  
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 
|                                                   | Earnings (loss) from continuing operations                                       |                                   |    | 15 |        |  |            | 15         |   |      |            | 63 |   |              |       | 146 |              |  |      | (234 | ) |  |        | 5   |  
|Earnings from operation of discontinued operations |                                                                                  |                                   |   |    |        |  |           |            |   |      | 8          |    |   |              | 2     |     |              |  |     |      |   |  | 10     |    
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 
|                                                   | Net earnings (loss)                                                              |                                   |    | 15 |        |  |            | 15         |   |      |            | 71 |   |              |       | 148 |              |  |      | (234 | ) |  |        | 15  |  
|                                                   |                                                                                  |                                   |    |    |        |  |            |            |   |      |            |    |   |              |       |     |              | 

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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


UNAUDITED CONSOLIDATING BALANCE SHEET INFORMATION


|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |       |       | 
|------------------------------------------ | ------------------------------------------------------------------------------------------------- | ---------------------- | --- | --- | ------ |  | ---------- | ---------- | --- | ---- | ---------- | ----- | --- | ------------ | ----- | ----- | ------------ |  | ------ | ------ | ------ | - | ----- | ----- | ----- | 
|                                           |                                                                                                   | As of March 31, 2006   |    
|                                           |                                                                                                   |                        |    
|                                           |                                                                                                   | Parent                 |     |     |        |  | Subsidiary |            |     | Non- |            |       |    
|                                           |                                                                                                   | Guarantor              |     |     | Issuer |  |            | Guarantors |     |      | Guarantors |       |     | Eliminations |       |       | Consolidated | 
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|                                           |                                                                                                   | (In $ millions)        |    
|ASSETS                                     |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|Current assets:                            |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|                                           | Cash and cash equivalents                                                                         |                        |     |    |        |  |            | 61         |     |      |            | 34    |     |              |       | 216   |              |  |        |       |        |   |       | 311   |      
|                                           | Restricted cash                                                                                   |                        |     |    |        |  |            |           |     |      |            |      |     |              |       | 42    |              |  |        |       |        |   |       | 42    |      
|                                           | Receivables:                                                                                      |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |       |      
|                                           |                                                                                                   | Trade receivables, net |     |     |       |  |            |            |    |      |            |       | 274 |              |       |       | 726          |  |        |        |       |   |       |       | 1,000 | 
|                                           |                                                                                                   | Other receivables      |     |     |       |  |            |            | 946 |      |            |       | 201 |              |       |       | 538          |  |        |        | (1,136 | ) |       |       | 549   | 
|                                           | Inventories                                                                                       |                        |     |    |        |  |            |           |     |      |            | 259   |     |              |       | 419   |              |  |        |       |        |   |       | 678   |      
|                                           | Deferred income taxes                                                                             |                        |     |    |        |  |            |           |     |      |            |      |     |              |       | 31    |              |  |        |       |        |   |       | 31    |      
|                                           | Other assets                                                                                      |                        |     |    |        |  |            |           |     |      |            | 30    |     |              |       | 48    |              |  |        |       |        |   |       | 78    |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total current assets                       |                                                                                                   |                        |    |     |        |  | 1,007      |            |     |      | 798        |       |     |              | 2,020 |       |              |  | (1,136 | )      |        |   | 2,689 |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|                                           | Investments                                                                                       |                        |     | 727 |        |  |            | 1,381      |     |      |            | 2,169 |     |              |       | 472   |              |  |        | (3,956 | )      |   |       | 793   |      
|                                           | Property, plant and equipment, net                                                                |                        |     |    |        |  |            |           |     |      |            | 864   |     |              |       | 1,171 |              |  |        |       |        |   |       | 2,035 |      
|                                           | Deferred income taxes                                                                             |                        |     |    |        |  |            |           |     |      |            | 3     |     |              |       | 118   |              |  |        |       |        |   |       | 121   |      
|                                           | Other assets                                                                                      |                        |     |    |        |  |            | 1,044      |     |      |            | 253   |     |              |       | 463   |              |  |        | (1,300 | )      |   |       | 460   |      
|                                           | Goodwill                                                                                          |                        |     |    |        |  |            |           |     |      |            | 352   |     |              |       | 576   |              |  |        |       |        |   |       | 928   |      
|                                           | Intangible assets, net                                                                            |                        |     |    |        |  |            |           |     |      |            | 106   |     |              |       | 381   |              |  |        |       |        |   |       | 487   |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total assets                               |                                                                                                   |                        | 727 |     |        |  | 3,432      |            |     |      | 4,545      |       |     |              | 5,201 |       |              |  | (6,392 | )      |        |   | 7,513 |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|                                          
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |      
|Current liabilities:                       |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|                                           | Short-term borrowings and current installments of long-term
    debt  third party and affiliates |                        |     |    |        |  |            | 17         |     |      |            | 940   |     |              |       | 108   |              |  |        | (853   | )      |   |       | 212   |      
|                                           | Trade payables  third party and affiliates                                                       |                        |     |    |        |  |            |           |     |      |            | 282   |     |              |       | 463   |              |  |        |       |        |   |       | 745   |      
|                                           | Other current liabilities                                                                         |                        |     |    |        |  |            | 29         |     |      |            | 261   |     |              |       | 755   |              |  |        | (283   | )      |   |       | 762   |      
|                                           | Deferred income taxes                                                                             |                        |     |    |        |  |            |           |     |      |            |      |     |              |       | 16    |              |  |        |       |        |   |       | 16    |      
|                                           | Income taxes payable                                                                              |                        |     |    |        |  |            |           |     |      |            | 51    |     |              |       | 194   |              |  |        |       |        |   |       | 245   |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total current liabilities                  |                                                                                                   |                        |    |     |        |  | 46         |            |     |      | 1,534      |       |     |              | 1,536 |       |              |  | (1,136 | )      |        |   | 1,980 |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Long-term debt                             |                                                                                                   |                        |    |     |        |  | 2,652      |            |     |      | 1,166      |       |     |              | 370   |       |              |  | (1,270 | )      |        |   | 2,918 |      
|Deferred income taxes                      |                                                                                                   |                        |    |     |        |  |           |            |     |      |           |       |     |              | 287   |       |              |  |       |        |        |   | 287   |      
|Benefit obligations                        |                                                                                                   |                        |    |     |        |  |           |            |     |      | 942        |       |     |              | 174   |       |              |  |       |        |        |   | 1,116 |      
|Other liabilities                          |                                                                                                   |                        |    |     |        |  | 7          |            |     |      | 211        |       |     |              | 232   |       |              |  | (30    | )      |        |   | 420   |      
|Minority interests                         |                                                                                                   |                        |    |     |        |  |           |            |     |      |           |       |     |              | 65    |       |              |  |       |        |        |   | 65    |      
|Commitments and contingencies              |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|Shareholders equity                       |                                                                                                   |                        | 727 |     |        |  | 727        |            |     |      | 692        |       |     |              | 2,537 |       |              |  | (3,956 | )      |        |   | 727   |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total liabilities and shareholders equity |                                                                                                   |                        | 727 |     |        |  | 3,432      |            |     |      | 4,545      |       |     |              | 5,201 |       |              |  | (6,392 | )      |        |   | 7,513 |      
|                                           |                                                                                                   |                        |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 

32



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##### 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, 2005 |    
|                                           |                                                                                                   |                         |    
|                                           |                                                                                                   | Parent                  |     |     |        |  | Subsidiary |            |     | Non- |            |       |    
|                                           |                                                                                                   | Guarantor               |     |     | Issuer |  |            | Guarantors |     |      | Guarantors |       |     | Eliminations |       |       | Consolidated | 
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|                                           |                                                                                                   | (In $ millions)         |    
|ASSETS                                     |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|Current assets:                            |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|                                           | Cash and cash equivalents                                                                         |                         |     |    |        |  |            | 61         |     |      |            | 93    |     |              |       | 235   |              |  |        |       |        |   |       | 389   |    
|                                           | Receivables:                                                                                      |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |       |    
|                                           |                                                                                                   | Trade receivables, net  |     |     |       |  |            |            |    |      |            |       | 252 |              |       |       | 667          |  |        |        |       |   |       |       | 919 | 
|                                           |                                                                                                   | Other receivables       |     |     |       |  |            |            | 949 |      |            |       | 191 |              |       |       | 596          |  |        |        | (1,250 | ) |       |       | 486 | 
|                                           | Inventories                                                                                       |                         |     |    |        |  |            |           |     |      |            | 250   |     |              |       | 411   |              |  |        |       |        |   |       | 661   |    
|                                           | Deferred income taxes                                                                             |                         |     |    |        |  |            |           |     |      |            |      |     |              |       | 37    |              |  |        |       |        |   |       | 37    |    
|                                           | Other assets                                                                                      |                         |     |    |        |  |            |           |     |      |            | 47    |     |              |       | 44    |              |  |        |       |        |   |       | 91    |    
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total current assets                       |                                                                                                   |                         |    |     |        |  | 1,010      |            |     |      | 833        |       |     |              | 1,990 |       |              |  | (1,250 | )      |        |   | 2,583 |      
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|                                           | Investments                                                                                       |                         |     | 610 |        |  |            | 1,230      |     |      |            | 2,142 |     |              |       | 454   |              |  |        | (3,661 | )      |   |       | 775   |    
|                                           | Property, plant and equipment, net                                                                |                         |     |    |        |  |            |           |     |      |            | 870   |     |              |       | 1,170 |              |  |        |       |        |   |       | 2,040 |    
|                                           | Deferred income taxes                                                                             |                         |     |    |        |  |            |           |     |      |            |      |     |              |       | 139   |              |  |        |       |        |   |       | 139   |    
|                                           | Other assets                                                                                      |                         |     |    |        |  |            | 1,044      |     |      |            | 261   |     |              |       | 475   |              |  |        | (1,306 | )      |   |       | 474   |    
|                                           | Goodwill                                                                                          |                         |     |    |        |  |            |           |     |      |            | 352   |     |              |       | 597   |              |  |        |       |        |   |       | 949   |    
|                                           | Intangible assets, net                                                                            |                         |     |    |        |  |            |           |     |      |            | 110   |     |              |       | 371   |              |  |        |       |        |   |       | 481   |    
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total assets                               |                                                                                                   |                         | 610 |     |        |  | 3,284      |            |     |      | 4,568      |       |     |              | 5,196 |       |              |  | (6,217 | )      |        |   | 7,441 |      
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|                                          
|LIABILITIES AND SHAREHOLDERS EQUITY      
|Current liabilities:                       |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|                                           | Short-term borrowings and current installments of long-term
    debt  third party and affiliates |                         |     |    |        |  |            | 17         |     |      |            | 945   |     |              |       | 149   |              |  |        | (956   | )      |   |       | 155   |    
|                                           | Trade payables  third party and affiliates                                                       |                         |     |    |        |  |            |           |     |      |            | 306   |     |              |       | 505   |              |  |        |       |        |   |       | 811   |    
|                                           | Other current liabilities                                                                         |                         |     |    |        |  |            | 10         |     |      |            | 313   |     |              |       | 758   |              |  |        | (294   | )      |   |       | 787   |    
|                                           | Deferred income taxes                                                                             |                         |     |    |        |  |            |           |     |      |            |      |     |              |       | 36    |              |  |        |       |        |   |       | 36    |    
|                                           | Income taxes payable                                                                              |                         |     |    |        |  |            |           |     |      |            | 52    |     |              |       | 172   |              |  |        |       |        |   |       | 224   |    
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total current liabilities                  |                                                                                                   |                         |    |     |        |  | 27         |            |     |      | 1,616      |       |     |              | 1,620 |       |              |  | (1,250 | )      |        |   | 2,013 |      
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Long-term debt                             |                                                                                                   |                         |    |     |        |  | 2,644      |            |     |      | 1,175      |       |     |              | 360   |       |              |  | (1,276 | )      |        |   | 2,903 |      
|Deferred income taxes                      |                                                                                                   |                         |    |     |        |  |           |            |     |      |           |       |     |              | 285   |       |              |  |       |        |        |   | 285   |      
|Benefit obligations                        |                                                                                                   |                         |    |     |        |  |           |            |     |      | 953        |       |     |              | 173   |       |              |  |       |        |        |   | 1,126 |      
|Other liabilities                          |                                                                                                   |                         |    |     |        |  | 3          |            |     |      | 227        |       |     |              | 240   |       |              |  | (30    | )      |        |   | 440   |      
|Minority interests                         |                                                                                                   |                         |    |     |        |  |           |            |     |      |           |       |     |              | 64    |       |              |  |       |        |        |   | 64    |      
|Commitments and contingencies              |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              |  |        |        |        |   |       |      
|Shareholders equity                       |                                                                                                   |                         | 610 |     |        |  | 610        |            |     |      | 597        |       |     |              | 2,454 |       |              |  | (3,661 | )      |        |   | 610   |      
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 
|Total liabilities and shareholders equity |                                                                                                   |                         | 610 |     |        |  | 3,284      |            |     |      | 4,568      |       |     |              | 5,196 |       |              |  | (6,217 | )      |        |   | 7,441 |      
|                                           |                                                                                                   |                         |     |     |        |  |            |            |     |      |            |       |     |              |       |       |              | 

33



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS
INFORMATION


|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              |  |   |    |   |  |     |     |  
|--------------------------------------------------- | ----------------------------------------------------- | --------------------------------- | - | -- | ------ |  | ---------- | ---------- | - | ---- | ---------- | --- | - | ------------ | --- | --- | ------------ |  | - | -- | - |  | --- | --- | -
|                                                    |                                                       | Three Months Ended March 31, 2006 |  
|                                                    |                                                       |                                   |  
|                                                    |                                                       | Parent                            |   |    |        |  | Subsidiary |            |   | Non- |            |     |  
|                                                    |                                                       | Guarantor                         |   |    | Issuer |  |            | Guarantors |   |      | Guarantors |     |   | Eliminations |     |     | Consolidated | 
|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              | 
|                                                    |                                                       | (In $ millions)                   |  
|Net cash provided by (used in) operating activities |                                                       |                                   |  |    |        |  | 13         |            |   |      | (37        | )   |   |              | 3   |     |              |  |  |    |   |  | (21 | )  
|Investing activities from continuing operations:    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              |  |   |    |   |  |     |    
|                                                    | Capital expenditures on property, plant and equipment |                                   |   |   |        |  |            |           |   |      |            | (17 | ) |              |     | (27 | )            |  |   |   |   |  |     | (44 | )
|                                                    | Proceeds from sale of marketable securities           |                                   |   |   |        |  |            |           |   |      |            |    |   |              |     | 20  |              |  |   |   |   |  |     | 20  |  
|                                                    | Purchases of marketable securities                    |                                   |   |   |        |  |            |           |   |      |            |    |   |              |     | (20 | )            |  |   |   |   |  |     | (20 | )
|                                                    | Increase in restricted cash                           |                                   |   |   |        |  |            |           |   |      |            |    |   |              |     | (42 | )            |  |   |   |   |  |     | (42 | )
|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              | 
|Net cash provided by (used in) investing activities |                                                       |                                   |  |    |        |  |           |            |   |      | (17        | )   |   |              | (69 | )   |              |  |  |    |   |  | (86 | )  
|Financing activities from continuing operations:    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              |  |   |    |   |  |     |    
|                                                    | Short-term borrowings (repayments), net               |                                   |   |   |        |  |            |           |   |      |            | (5  | ) |              |     | 37  |              |  |   |   |   |  |     | 32  |  
|                                                    | Proceeds from long-term debt                          |                                   |   |   |        |  |            |           |   |      |            |    |   |              |     | 7   |              |  |   |   |   |  |     | 7   |  
|                                                    | Payments of long-term debt                            |                                   |   |   |        |  |            | (4         | ) |      |            |    |   |              |     | (1  | )            |  |   |   |   |  |     | (5  | )
|                                                    | Dividends from subsidiary                             |                                   |   | 9  |        |  |            |           |   |      |            |    |   |              |     |    |              |  |   | (9 | ) |  |     |    |  
|                                                    | Dividends to parent                                   |                                   |   | (9 | )      |  |            | (9         | ) |      |            |    |   |              |     |    |              |  |   | 9  |   |  |     | (9  | )
|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              | 
|Net cash provided by (used in) financing activities |                                                       |                                   |  |    |        |  | (13        | )          |   |      | (5         | )   |   |              | 43  |     |              |  |  |    |   |  | 25  |    
|                                                    | Exchange rate effects on cash                         |                                   |   |   |        |  |            |           |   |      |            |    |   |              |     | 4   |              |  |   |   |   |  |     | 4   |  
|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              | 
|Net increase in cash and cash equivalents           |                                                       |                                   |  |    |        |  |           |            |   |      | (59        | )   |   |              | (19 | )   |              |  |  |    |   |  | (78 | )  
|Cash and cash equivalents at beginning of period    |                                                       |                                   |  |    |        |  | 61         |            |   |      | 93         |     |   |              | 235 |     |              |  |  |    |   |  | 389 |    
|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              | 
|Cash and cash equivalents at end of period          |                                                       |                                   |  |    |        |  | 61         |            |   |      | 34         |     |   |              | 216 |     |              |  |  |    |   |  | 311 |    
|                                                    |                                                       |                                   |   |    |        |  |            |            |   |      |            |     |   |              |     |     |              | 

34



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##### Table of Contents



CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


UNAUDITED CONSOLIDATING STATEMENT OF CASH FLOWS
INFORMATION


|                                                    |                                                                        |                                   |      |      |        |  |            |            |   |      |            |      |   |              |       |     |              |  |   |   |  |  |       |       |  
|--------------------------------------------------- | ---------------------------------------------------------------------- | --------------------------------- | ---- | ---- | ------ |  | ---------- | ---------- | - | ---- | ---------- | ---- | - | ------------ | ----- | --- | ------------ |  | - | - |  |  | ----- | ----- | -
|                                                    |                                                                        | Three Months Ended March 31, 2005 |     
|                                                    |                                                                        |                                   |     
|                                                    |                                                                        | Parent                            |      |      |        |  | Subsidiary |            |   | Non- |            |      |  
|                                                    |                                                                        | Guarantor                         |      |      | Issuer |  |            | Guarantors |   |      | 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   | )
|                                                    | Investments in subsidiaries, net                                       |                                   |      | (572 | )      |  |            | 572        |   |      |            |     |   |              |       | (2  | )            |  |   |  |  |  |       | (2    | )
|                                                    | Fees associated with acquisitions                                      |                                   |      |     |        |  |            |           |   |      |            | (5   | ) |              |       | (2  | )            |  |   |  |  |  |       | (7    | )
|                                                    | Acquisition of Vinamul, net of cash reimbursed                         |                                   |      |     |        |  |            | (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   | )
|                                                    |                                                                        |                                   |      |      |        |  |            |            |   |      |            |      |   |              |       |     |              | 
|Net cash provided by (used in) investing activities |                                                                        |                                   | (572 | )    |        |  | 516        |            |   |      | (156       | )    |   |              | 107   |     |              |  |  |   |  |  | (105  | )    
|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  | )
|                                                    | Borrowings under term loan facilities                                  |                                   |      |     |        |  |            | 1,135      |   |      |            |     |   |              |       |    |              |  |   |  |  |  |       | 1,135 |  
|                                                    | Contribution from Parent                                               |                                   |      | 572  |        |  |            |           |   |      |            |     |   |              |       |    |              |  |   |  |  |  |       | 572   |  
|                                                    | Short-term borrowings (repayments), net                                |                                   |      |     |        |  |            |           |   |      |            |     |   |              |       | (10 | )            |  |   |  |  |  |       | (10   | )
|                                                    | Proceeds from long-term debt                                           |                                   |      |     |        |  |            |           |   |      |            |     |   |              |       | 6   |              |  |   |  |  |  |       | 6     |  
|                                                    | Payments of long-term debt                                             |                                   |      |     |        |  |            | (2         | ) |      |            |     |   |              |       | (1  | )            |  |   |  |  |  |       | (3    | )
|                                                    | Fees associated with financing                                         |                                   |      |     |        |  |            | (7         | ) |      |            |     |   |              |       |    |              |  |   |  |  |  |       | (7    | )
|                                                    |                                                                        |                                   |      |      |        |  |            |            |   |      |            |      |   |              |       |     |              | 
|Net cash provided by (used in) financing activities |                                                                        |                                   | 572  |      |        |  | 200        |            |   |      |           |      |   |              | (5    | )   |              |  |  |   |  |  | 767   |      
|                                                    | Exchange rate effects on cash                                          |                                   |      |     |        |  |            |           |   |      |            |     |   |              |       | (22 | )            |  |   |  |  |  |       | (22   | )
|                                                    |                                                                        |                                   |      |      |        |  |            |            |   |      |            |      |   |              |       |     |              | 
|Net increase 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 |      
|                                                    |                                                                        |                                   |      |      |        |  |            |            |   |      |            |      |   |              |       |     |              | 

35



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CELANESE HOLDINGS LLC AND SUBSIDIARIES


NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                  
|--- | -----------------
|21. | Subsequent Events







36



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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

In this Annual report on Form 10-K, 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.


10-Q 10-K 10-Q.




| |                    
| | -------------------
| | Change in Ownership







| |            
| | -----------
| | Squeeze-Out






37



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##### Table of Contents







| |         
| | --------
| | Overview







| |                            
| | ---------------------------
| | Financial Reporting Changes

Share Based
Payment, Accounting for Stock Issued to Employees


38



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##### Table of Contents





| |                      
| | ---------------------
| | Results of Operations



| |                     
| | --------------------
| | Financial Highlights

|                                                                          |  |                |       |  |           |  |              |                |  |  |           |   |  |  |       |   
|------------------------------------------------------------------------- |  | -------------- | ----- |  | --------- |  | ------------ | -------------- |  |  | --------- | - |  |  | ----- | --
|                                                                          |  | Three Months   |       |  |           |  | Three Months |                |  | 
|                                                                          |  | Ended          |       |  | % of      |  |              | Ended          |  |  | % of      |  
|                                                                          |  | March 31, 2006 |       |  | Net Sales |  |              | March 31, 2005 |  |  | Net Sales |  
|                                                                          |  |                |       |  |           |  |              |                |  |  |           |  
|                                                                          |  | (Unaudited)    |       |  |           |  | (Unaudited)  |                |  | 
|(In $ millions)                                                           |  |                |       |  |           |  |              |                |  |  |           |   |  |  |       |   
|                                                                         
|Statement of Operations Data:                                             |  |                |       |  |           |  |              |                |  |  |           |   |  |  |       |   
|Net sales                                                                 |  |                | 1,652 |  |           |  | 100.0        | %              |  |  | 1,478     |   |  |  | 100.0 | % 
|Gross profit                                                              |  |                | 367   |  |           |  | 22.2         | %              |  |  | 372       |   |  |  | 25.2  | % 
|Special (charges) gains                                                   |  |                |      |  |           |  |             |                |  |  | (38       | ) |  |  | (2.6  | )%
|Operating profit                                                          |  |                | 201   |  |           |  | 12.2         | %              |  |  | 159       |   |  |  | 10.8  | % 
|Equity in net earnings of affiliates                                      |  |                | 21    |  |           |  | 1.3          | %              |  |  | 15        |   |  |  | 1.0   | % 
|Earnings from continuing operations before tax and minority
    interests |  |                | 175   |  |           |  | 10.6         | %              |  |  | 47        |   |  |  | 3.2   | % 
|Earnings from continuing operations                                       |  |                | 126   |  |           |  | 7.6          | %              |  |  | 5         |   |  |  | 0.3   | % 
|Earnings from discontinued operations                                     |  |                | 1     |  |           |  |             |                |  |  | 10        |   |  |  | 0.7   | % 
|Net earnings                                                              |  |                | 127   |  |           |  | 7.7          | %              |  |  | 15        |   |  |  | 1.0   | % 
|Depreciation and amortization                                             |  |                | 70    |  |           |  | 4.2          | %              |  |  | 63        |   |  |  | 4.3   | % 

|                                                                                                  |  |                 |       |  |                   |  |       | 
|------------------------------------------------------------------------------------------------- |  | --------------- | ----- |  | ----------------- |  | ----- | 
|                                                                                                  |  | As of           |       |  | As of             | 
|                                                                                                  |  | March 31, 2006  |       |  | December 31, 2005 | 
|                                                                                                  |  |                 |       |  |                   | 
|                                                                                                  |  | (In $ millions) |      
|                                                                                                  |  | (Unaudited)     |       |  |                  
|Balance Sheet Data:                                                                               |  |                 |       |  |                   |  |       | 
|Short-term borrowings and current installments of long-term
    debt  third party and affiliates |  |                 | 212   |  |                   |  | 155   | 
|Plus: Long-term debt                                                                              |  |                 | 2,918 |  |                   |  | 2,903 | 
|                                                                                                  |  |                 |       |  |                   | 
|Total debt                                                                                        |  |                 | 3,130 |  |                   |  | 3,058 | 
|                                                                                                  |  |                 |       |  |                   | 

Summary of Consolidated Results  Three Months
Ended March 31, 2006 Compared with Three Months Ended
March 31, 2005




| |          
| | ---------
| | Net Sales





| |              
| | -------------
| | Cost of Sales



39



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| |             
| | ------------
| | Gross Profit





| |                                             
| | --------------------------------------------
| | Selling, General and Administrative Expenses





| |                        
| | -----------------------
| | Special (Charges) Gains



|                                                    |                               |                 |    |   |                |  |     |     |  
|--------------------------------------------------- | ----------------------------- | --------------- | -- | - | -------------- |  | --- | --- | -
|                                                    |                               | Three Months    |    |   | Three Months   | 
|                                                    |                               | Ended           |    |   | Ended          | 
|                                                    |                               | March 31, 2006  |    |   | March 31, 2005 | 
|                                                    |                               |                 |    |   |                | 
|                                                    |                               | (Unaudited)     |   
|                                                    |                               | (In $ millions) |   
|Employee termination benefits                       |                               |                 | (2 | ) |                |  | (2  | )  
|Plant/office closures                               |                               |                 | 2  |   |                |  | (1  | )  
|                                                    |                               |                 |    |   |                | 
|                                                    | Total restructuring           |                 |    |  |                |  |     | (3  | )
|Insurance recoveries associated with plumbing cases |                               |                 | 1  |   |                |  |    |    
|Other                                               |                               |                 | (1 | ) |                |  | (35 | )  
|                                                    |                               |                 |    |   |                | 
|                                                    | Total special (charges) gains |                 |    |  |                |  |     | (38 | )
|                                                    |                               |                 |    |   |                | 





| |                 
| | ----------------
| | Operating Profit





| |                                     
| | ------------------------------------
| | Equity in Net Earnings of Affiliates



40



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##### Table of Contents





| |                 
| | ----------------
| | Interest Expense





| |                            
| | ---------------------------
| | Other Income (Expense), Net





| |             
| | ------------
| | Income Taxes

non-U.S.






| |                                      
| | -------------------------------------
| | Earnings from Discontinued Operations





| |             
| | ------------
| | Net Earnings



41



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##### Table of Contents



Selected Data by Business Segment  Three Months
Ended March 31, 2006 Compared with Three Months Ended
March 31, 2005


|                                                                                 |  |                 |       |   |                |  |       |        |  |  |     |  
|-------------------------------------------------------------------------------- |  | --------------- | ----- | - | -------------- |  | ----- | ------ |  |  | --- | -
|                                                                                 |  | Three Months    |       |   | Three Months   |  |       |       
|                                                                                 |  | Ended           |       |   | Ended          |  |       | Change | 
|                                                                                 |  | March 31, 2006  |       |   | March 31, 2005 |  |       | in $   | 
|                                                                                 |  |                 |       |   |                |  |       |        | 
|                                                                                 |  | (In $ millions) |       |   |               
|                                                                                 |  | (Unaudited)     |       |   |               
|Net Sales                                                                        |  |                 |       |   |                |  |       |        |  |  |     |  
|Chemical Products                                                                |  |                 | 1,169 |   |                |  | 1,044 |        |  |  | 125 |  
|Technical Polymers Ticona                                                        |  |                 | 231   |   |                |  | 239   |        |  |  | (8  | )
|Acetate Products                                                                 |  |                 | 167   |   |                |  | 165   |        |  |  | 2   |  
|Performance Products                                                             |  |                 | 49    |   |                |  | 47    |        |  |  | 2   |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Segment Total                                                                    |  |                 | 1,616 |   |                |  | 1,495 |        |  |  | 121 |  
|Other Activities                                                                 |  |                 | 61    |   |                |  | 12    |        |  |  | 49  |  
|Inter-segment Eliminations                                                       |  |                 | (25   | ) |                |  | (29   | )      |  |  | 4   |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Total Net Sales                                                                  |  |                 | 1,652 |   |                |  | 1,478 |        |  |  | 174 |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Special (Charges) Gains                                                          |  |                 |       |   |                |  |       |        |  |  |     |  
|Chemical Products                                                                |  |                 | 1     |   |                |  | (1    | )      |  |  | 2   |  
|Technical Polymers Ticona                                                        |  |                 | 2     |   |                |  | (1    | )      |  |  | 3   |  
|Acetate Products                                                                 |  |                 |      |   |                |  | (1    | )      |  |  | 1   |  
|Performance Products                                                             |  |                 |      |   |                |  |      |        |  |  |    |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Segment Total                                                                    |  |                 | 3     |   |                |  | (3    | )      |  |  | 6   |  
|Other Activities                                                                 |  |                 | (3    | ) |                |  | (35   | )      |  |  | 32  |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Total Special Charges                                                            |  |                 |      |   |                |  | (38   | )      |  |  | 38  |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Operating Profit (Loss)                                                          |  |                 |       |   |                |  |       |        |  |  |     |  
|Chemical Products                                                                |  |                 | 162   |   |                |  | 177   |        |  |  | (15 | )
|Technical Polymers Ticona                                                        |  |                 | 41    |   |                |  | 39    |        |  |  | 2   |  
|Acetate Products                                                                 |  |                 | 23    |   |                |  | 10    |        |  |  | 13  |  
|Performance Products                                                             |  |                 | 17    |   |                |  | 13    |        |  |  | 4   |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Segment Total                                                                    |  |                 | 243   |   |                |  | 239   |        |  |  | 4   |  
|Other Activities                                                                 |  |                 | (42   | ) |                |  | (80   | )      |  |  | 38  |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Total Operating Profit                                                           |  |                 | 201   |   |                |  | 159   |        |  |  | 42  |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Earnings (Loss) from Continuing Operations Before Tax and
    Minority Interests |  |                 |       |   |                |  |       |        |  |  |     |  
|Chemical Products                                                                |  |                 | 171   |   |                |  | 193   |        |  |  | (22 | )
|Technical Polymers Ticona                                                        |  |                 | 56    |   |                |  | 51    |        |  |  | 5   |  
|Acetate Products                                                                 |  |                 | 23    |   |                |  | 10    |        |  |  | 13  |  
|Performance Products                                                             |  |                 | 15    |   |                |  | 12    |        |  |  | 3   |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Segment Total                                                                    |  |                 | 265   |   |                |  | 266   |        |  |  | (1  | )
|Other Activities                                                                 |  |                 | (90   | ) |                |  | (219  | )      |  |  | 129 |  
|                                                                                 |  |                 |       |   |                |  |       |        | 
|Total Earnings from Continuing Operations Before Tax and
    Minority Interests  |  |                 | 175   |   |                |  | 47    |        |  |  | 128 |  
|                                                                                 |  |                 |       |   |                |  |       |        | 

42



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Selected Data by Business Segment  Three Months
Ended March 31, 2006 Compared with Three Months Ended
March 31, 2005 (continued)


|                                  |  |                 |    |  |                |  |    |        |  |  |    |  
|--------------------------------- |  | --------------- | -- |  | -------------- |  | -- | ------ |  |  | -- | -
|                                  |  | Three Months    |    |  | Three Months   |  |    |       
|                                  |  | Ended           |    |  | Ended          |  |    | Change | 
|                                  |  | March 31, 2006  |    |  | March 31, 2005 |  |    | in $   | 
|                                  |  |                 |    |  |                |  |    |        | 
|                                  |  | (In $ millions) |    |  |               
|                                  |  | (Unaudited)     |    |  |               
|Depreciation & Amortization       |  |                 |    |  |                |  |    |        |  |  |    |  
|Chemical Products                 |  |                 | 38 |  |                |  | 34 |        |  |  | 4  |  
|Technical Polymers Ticona         |  |                 | 16 |  |                |  | 15 |        |  |  | 1  |  
|Acetate Products                  |  |                 | 7  |  |                |  | 9  |        |  |  | (2 | )
|Performance Products              |  |                 | 4  |  |                |  | 3  |        |  |  | 1  |  
|                                  |  |                 |    |  |                |  |    |        | 
|Segment Total                     |  |                 | 65 |  |                |  | 61 |        |  |  | 4  |  
|Other Activities                  |  |                 | 5  |  |                |  | 2  |        |  |  | 3  |  
|                                  |  |                 |    |  |                |  |    |        | 
|Total Depreciation & Amortization |  |                 | 70 |  |                |  | 63 |        |  |  | 7  |  
|                                  |  |                 |    |  |                |  |    |        | 

Factors Affecting First Quarter 2006 Segment Net Sales
Compared to First Quarter 2005


|                          |  |                  |    |   |       |  |     |          |  |  |        |   |  |       |    |   |  |  |    |  
|------------------------- |  | ---------------- | -- | - | ----- |  | --- | -------- |  |  | ------ | - |  | ----- | -- | - |  |  | -- | -
|                          |  | Volume           |    |   | Price |  |     | Currency |  |  | Other* |   |  | Total |   
|                          |  |                  |    |   |       |  |     |          |  |  |        |   |  |       |   
|                          |  | (In percentages) |   
|Chemical Products         |  |                  | (1 | ) |       |  | 8   |          |  |  | (3     | ) |  |       | 8  |   |  |  | 12 |  
|Technical Polymers Ticona |  |                  | 1  |   |       |  | 3   |          |  |  | (5     | ) |  |       | (2 | ) |  |  | (3 | )
|Acetate Products          |  |                  | (6 | ) |       |  | 7   |          |  |  |       |   |  |       |   |   |  |  | 1  |  
|Performance Products      |  |                  | 23 |   |       |  | (12 | )        |  |  | (7     | ) |  |       |   |   |  |  | 4  |  
|                         
|                         
|                         
|Total Company             |  |                  | (1 | ) |       |  | 6   |          |  |  | (3     | ) |  |       | 10 |   |  |  | 12 |  
|                         






|  |                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Primarily represents net sales from the Acetex business, AT
    Plastics and captive insurance companies, which are included in
    Other Activities, and the loss of sales related to the
    cyclo-olefine copolymer (COC) divestiture.

43



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Summary by Business Segment  Three Months Ended
March 31, 2006 Compared with Three Months Ended
March 31, 2005




| |                  
| | -----------------
| | Chemical Products

|                                                                          |          |                 |       |    |                |  |       |        |  |  |     |   | 
|------------------------------------------------------------------------- | -------- | --------------- | ----- | -- | -------------- |  | ----- | ------ |  |  | --- | - | 
|                                                                          |          | Three Months    |       |    | Three Months   |  |       |       
|                                                                          |          | Ended           |       |    | Ended          |  |       | Change | 
|                                                                          |          | March 31, 2006  |       |    | March 31, 2005 |  |       | in $   | 
|                                                                          |          |                 |       |    |                |  |       |        | 
|                                                                          |          | (In $ millions) |       |    |               
|                                                                          |          | (Unaudited)     |       |    |               
|Net sales                                                                 |          |                 | 1,169 |    |                |  | 1,044 |        |  |  | 125 |  
|Net sales variance:                                                       |          |                 |       |    |                |  |       |        |  |  |     |  
|                                                                          | Volume   |                 |       | (1 | )%             |  |       |        |  |  |     |   | 
|                                                                          | Price    |                 |       | 8  | %              |  |       |        |  |  |     |   | 
|                                                                          | Currency |                 |       | (3 | )%             |  |       |        |  |  |     |   | 
|                                                                          | Other    |                 |       | 8  | %              |  |       |        |  |  |     |   | 
|Operating profit                                                          |          |                 | 162   |    |                |  | 177   |        |  |  | (15 | )
|Operating margin                                                          |          |                 | 13.9  | %  |                |  | 17.0  | %      |  |  |     |  
|Special (charges) gains                                                   |          |                 | 1     |    |                |  | (1    | )      |  |  | 2   |  
|Earnings from continuing operations before tax and minority
    interests |          |                 | 171   |    |                |  | 193   |        |  |  | (22 | )
|Depreciation and amortization                                             |          |                 | 38    |    |                |  | 34    |        |  |  | 4   |  









44



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| |                          
| | -------------------------
| | Technical Polymers Ticona

|                                                                          |          |                 |      |    |                |  |      |        |  |  |    |   | 
|------------------------------------------------------------------------- | -------- | --------------- | ---- | -- | -------------- |  | ---- | ------ |  |  | -- | - | 
|                                                                          |          | Three Months    |      |    | Three Months   |  |      |       
|                                                                          |          | Ended           |      |    | Ended          |  |      | Change | 
|                                                                          |          | March 31, 2006  |      |    | March 31, 2005 |  |      | in $   | 
|                                                                          |          |                 |      |    |                |  |      |        | 
|                                                                          |          | (In $ millions) |      |    |               
|                                                                          |          | (Unaudited)     |      |    |               
|Net sales                                                                 |          |                 | 231  |    |                |  | 239  |        |  |  | (8 | )
|Net sales variance:                                                       |          |                 |      |    |                |  |      |        |  |  |    |  
|                                                                          | Volume   |                 |      | 1  | %              |  |      |        |  |  |    |   | 
|                                                                          | Price    |                 |      | 3  | %              |  |      |        |  |  |    |   | 
|                                                                          | Currency |                 |      | (5 | )%             |  |      |        |  |  |    |   | 
|                                                                          | Other    |                 |      | (2 | )%             |  |      |        |  |  |    |   | 
|Operating profit                                                          |          |                 | 41   |    |                |  | 39   |        |  |  | 2  |  
|Operating margin                                                          |          |                 | 17.7 | %  |                |  | 16.3 | %      |  |  |    |  
|Special (charges) gains                                                   |          |                 | 2    |    |                |  | (1   | )      |  |  | 3  |  
|Earnings from continuing operations before tax and minority
    interests |          |                 | 56   |    |                |  | 51   |        |  |  | 5  |  
|Depreciation and amortization                                             |          |                 | 16   |    |                |  | 15   |        |  |  | 1  |  









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Acetate Products


|                                                                          |        |                 |      |    |                |  |     |        |  |  |    |   | 
|------------------------------------------------------------------------- | ------ | --------------- | ---- | -- | -------------- |  | --- | ------ |  |  | -- | - | 
|                                                                          |        | Three Months    |      |    | Three Months   |  |     |       
|                                                                          |        | Ended           |      |    | Ended          |  |     | Change | 
|                                                                          |        | March 31, 2006  |      |    | March 31, 2005 |  |     | in $   | 
|                                                                          |        |                 |      |    |                |  |     |        | 
|                                                                          |        | (In $ millions) |      |    |               
|                                                                          |        | (Unaudited)     |      |    |               
|Net sales                                                                 |        |                 | 167  |    |                |  | 165 |        |  |  | 2  |  
|Net sales variance:                                                       |        |                 |      |    |                |  |     |        |  |  |    |  
|                                                                          | Volume |                 |      | (6 | )%             |  |     |        |  |  |    |   | 
|                                                                          | Price  |                 |      | 7  | %              |  |     |        |  |  |    |   | 
|Operating profit                                                          |        |                 | 23   |    |                |  | 10  |        |  |  | 13 |  
|Operating margin                                                          |        |                 | 13.8 | %  |                |  | 6.1 | %      |  |  |    |  
|Special (charges) gains                                                   |        |                 |     |    |                |  | (1  | )      |  |  | 1  |  
|Earnings from continuing operations before tax and minority
    interests |        |                 | 23   |    |                |  | 10  |        |  |  | 13 |  
|Depreciation and amortization                                             |        |                 | 7    |    |                |  | 9   |        |  |  | (2 | )









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| |                     
| | --------------------
| | Performance Products

|                                                                          |          |                 |      |     |                |  |      |        |  |  |   |  | 
|------------------------------------------------------------------------- | -------- | --------------- | ---- | --- | -------------- |  | ---- | ------ |  |  | - |  | 
|                                                                          |          | Three Months    |      |     | Three Months   |  |      |       
|                                                                          |          | Ended           |      |     | Ended          |  |      | Change | 
|                                                                          |          | March 31, 2006  |      |     | March 31, 2005 |  |      | in $   | 
|                                                                          |          |                 |      |     |                |  |      |        | 
|                                                                          |          | (In $ millions) |      |     |               
|                                                                          |          | (Unaudited)     |      |     |               
|Net sales                                                                 |          |                 | 49   |     |                |  | 47   |        |  |  | 2 | 
|Net sales variance:                                                       |          |                 |      |     |                |  |      |        |  |  |   | 
|                                                                          | Volume   |                 |      | 23  | %              |  |      |        |  |  |   |  | 
|                                                                          | Price    |                 |      | (12 | )%             |  |      |        |  |  |   |  | 
|                                                                          | Currency |                 |      | (7  | )%             |  |      |        |  |  |   |  | 
|Operating profit                                                          |          |                 | 17   |     |                |  | 13   |        |  |  | 4 | 
|Operating margin                                                          |          |                 | 34.7 | %   |                |  | 27.7 | %      |  |  |   | 
|Special (charges) gains                                                   |          |                 |     |     |                |  |     |        |  |  |  | 
|Earnings from continuing operations before tax and minority
    interests |          |                 | 15   |     |                |  | 12   |        |  |  | 3 | 
|Depreciation and amortization                                             |          |                 | 4    |     |                |  | 3    |        |  |  | 1 | 

®










| |                 
| | ----------------
| | Other Activities









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Liquidity and Capital Resources




Cash Flows






| |                                                    
| | ---------------------------------------------------
| | Net Cash Provided by/(Used in) Operating Activities







| |                                      
| | -------------------------------------
| | Net Cash Used in Investing Activities







| |                                          
| | -----------------------------------------
| | Net Cash Provided by Financing Activities





| |   |                                                                                      
| | - | -------------------------------------------------------------------------------------
| |  | Borrowings under the term loan facility of $1,135 million.                           
|
| |  | Redemption and related premiums of the senior subordinated notes
    of $572 million.
|
| |  | Repayment of floating rate term loan, including related premium,
    of $354 million.

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| |          
| | ---------
| | Liquidity





| |     
| | ----
| | Debt





Contractual Debt Obligations.


|                                   |                                          |                 |       |           |      |  |       |      |  |       |      |    |          |            |    |    |  |  |       |       | 
|---------------------------------- | ---------------------------------------- | --------------- | ----- | --------- | ---- |  | ----- | ---- |  | ----- | ---- | -- | -------- | ---------- | -- | -- |  |  | ----- | ----- | 
|                                   |                                          |                 |       | Remaining |      |  | 2007- |      |  | 2009- |      |    | 2011 and |           
|Fixed Contractual Debt Obligations |                                          | Total           |       |           | 2006 |  |       | 2008 |  |       | 2010 |    |          | Thereafter |   
|                                   |                                          |                 |       |           |      |  |       |      |  |       |      |    |          |            |   
|                                   |                                          | (In $ millions) |      
|Term Loan Facilities               |                                          |                 | 1,712 |           |      |  | 13    |      |  |       | 34   |    |          |            | 33 |    |  |  | 1,632 |      
|Senior Subordinated Notes(1)       |                                          |                 | 954   |           |      |  |      |      |  |       |     |    |          |            |   |    |  |  | 954   |      
|Other Debt(2)                      |                                          |                 | 463   |           |      |  | 194   |      |  |       | 19   |    |          |            | 39 |    |  |  | 211   |      
|                                   |                                          |                 |       |           |      |  |       |      |  |       |      |    |          |            |   
|                                   | Total Fixed Contractual Debt Obligations |                 |       | 3,129     |      |  |       | 207  |  |       |      | 53 |          |            |    | 72 |  |  |       | 2,797 | 
|                                   |                                          |                 |       |           |      |  |       |      |  |       |      |    |          |            |   






|    |                                                                        
|--- | -----------------------------------------------------------------------
|(1) | Does not include $3 million of premium.                                
|   
|(2) | Does not include a $2 million reduction due to purchase
    accounting.

Senior Credit Facilities.











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##### Table of Contents





| |                    
| | -------------------
| | Recent Transactions











| |                     
| | --------------------
| | Domination Agreement

10-K


  


   




50



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##### Table of Contents





Off-Balance Sheet Arrangements




Critical Accounting Policies and Estimates




10-K 10-K


10-K


Recent Accounting Pronouncements


10-Q


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;

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| |   |                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                                                                                                                                                                                                                                                                          








|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures about Market
    Risk

10-K







|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Disclosure Controls and Procedures


13a-15(e)


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##### Table of Contents





Changes in Internal Control Over Financial Reporting






10-K.






53



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##### Table of Contents






PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings





| |                 
| | ----------------
| | Plumbing Actions

10-K




| |                           
| | --------------------------
| | Sorbates Antitrust Actions

10-K




| |                       
| | ----------------------
| | Shareholder Litigation

 (Ausgleich)




| |              
| | -------------
| | Other Matters

10-K







|         |             
|-------- | ------------
|Item 1A. | Risk Factors

10-K


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As a result of the announced secondary offering by
Celanese Corporation, our ultimate parent, Celanese Corporation
will no longer be a controlled company within the
meaning of the New York Stock Exchange rules; however, it will
be permitted to phase in certain corporate governance
requirements over the course of 12 months.






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.




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##### Table of Contents








|        |                                                                
|------- | ---------------------------------------------------------------
|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

|        |   |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | - | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |            
|Number  |   | Description
|        |   |            
|        | 3 | .1          |  | Second Amended and Restated Certificate of Incorporation of
    Registrant (incorporated by reference to Exhibit 3.1 to the
    Registrants Current Report on Form 8-K (File No.
    001-32410) filed with the SEC on January 28, 2005)                                                                                                                                                                                                                                                            
|        | 3 | .2          |  | Amended and Restated By-laws of Registrant (incorporated by
    reference to Exhibit 3.2 to the Registrants
    Registration Statement on Form S-4 (File
    No. 333-124049-01) filed with the SEC on April 13,
    2005).                                                                                                                                                                                                                                                                         
|        | 3 | .3          |  | Certificate of Designations of Convertible Perpetual Preferred
    Stock (incorporated by reference to Exhibit 3.2 to the
    Registrants Current Report on Form 8-K (File No.
    001-32410) filed with the SEC on January 28, 2005)                                                                                                                                                                                                                                                              
|        | 4 | .1          |  | Form of certificate of Series A common stock (incorporated
    by reference to Exhibit 4.1 to Amendment No. 6 to the
    Registrants Registration Statement on Form S-1 (File
    No. 333-120187) (the Form S-1) filed with
    the SEC on January 19, 2005)                                                                                                                                                                                                                                     
|        | 4 | .2          |  | Form of certificate of Convertible Perpetual Preferred Stock
    (incorporated by reference to Exhibit 4.2 to Amendment
    No. 5 to the Form S-1 filed with the SEC on
    January 13, 2005)                                                                                                                                                                                                                                                                                                       
|        | 4 | .3          |  | Third Amended and Restated Shareholders Agreement, dated
    as of October 31, 2005, among Celanese Corporation,
    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. (incorporated by reference to Exhibit 4.3 to the
    Registrants Registration Statement filed on Form S-1
    (File No. 333-127902) filed with the SEC on
    November 1, 2005)
|        | 4 | .4          |  | Amended and Restated Registration Rights Agreement, dated as of
    January 26, 2005, among Blackstone Capital Partners
    (Cayman) Ltd. 1, Blackstone Capital Partners (Cayman)
    Ltd. 2, Blackstone Capital Partners (Cayman) Ltd. 3,
    BA Capital Investors Sidecar Fund, L.P. and Celanese Corporation
    (incorporated by reference to Exhibit 10.2 to the
    Form 8-K (File No. 001-32410) filed with the SEC on
    January 28, 2005)                                                 
|        | 4 | .5          |  | Amendment No. 1 to the Third Amended and Restated
    Shareholders Agreement, dated November 14, 2005, by
    and among Celanese Corporation, 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. (incorporated by
    reference to Current Report on Form 8-K, filed with the SEC
    on November 18, 2005)                                            

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|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 4  | .6          |  | Amendment No. 2, dated March 30, 2006, to the Third
    Amended and Restated Shareholders Agreement, dated as of
    October 31, 2005, as amended (the Agreement),
    by and among Celanese Corporation, Blackstone Capital Partners
    (Cayman) Ltd. 1 (BCP 1), Blackstone
    Capital Partners (Cayman) Ltd. 2 (BCP 2),
    Blackstone Capital Partners (Cayman) Ltd. 3
    (BCP 3 and, together with BCP 1 and
    BCP 2 and their respective successors and permitted
    assigns, the Blackstone Entities) and BA Capital
    Investors Sidecar Fund, L.P., a Cayman Islands limited
    partnership (BACI) (incorporated by reference to
    Exhibit 4.6 to the Form 10-K filed with the SEC on
    March 31, 2006)
|        | 12 |             |  | Computation of ratio of earnings to fixed charges (filed
    herewith)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 31 | .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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



57



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SIGNATURES






| |                      
| | ---------------------
| | CELANESE HOLDINGS LLC



| |     |                     
| | --- | --------------------
| | By: | /s/ David N. Weidman

| |                        
| | -----------------------
| |                        
| | Name:  David N. Weidman

| |        |                                      
| | ------ | -------------------------------------
| | Title: | President and Chief Executive Officer

| |                     
| | --------------------
| | Date:   May 11, 2006



| |     |                          
| | --- | -------------------------
| | By: | /s/ John J. Gallagher III

| |                             
| | ----------------------------
| |                             
| | Name:  John J. Gallagher III

| |        |                             
| | ------ | ----------------------------
| | Title: | Executive Vice President and

| |                              
| | -----------------------------
| | Chief Financial Officer      
| | (Principal Financial Officer)
| | Date:   May 11, 2006         

58