|As Filed with the
Securities and Exchange Commission on February 28, 2003
|-------------------------------------------------------------------------
|                                                                         

# UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

---

# FORM 20-F

# ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2002

# Commission file
number 1-15419

|CELANESE AG                                           
|------------------------------------------------------
|(Exact name of Registrant as specified in its charter)

|CELANESE CORPORATION                           
|-----------------------------------------------
|(Translation of Registrants name into English)

|FEDERAL REPUBLIC OF GERMANY                    
|-----------------------------------------------
|(Jurisdiction of incorporation or organization)

|61476 KRONBERG/TAUNUS, GERMANY          
|----------------------------------------
|(Address of principal executive offices)

Securities
registered pursuant to Section 12(b) of the Act:

|Title of each class
Ordinary Shares with no par value | Name of each exchange on which registered
New York Stock Exchange
|----------------------------------------------------- | -----------------------------------------------------------------

---

Securities
registered or to be registered pursuant to Section 12(g) of the Act:

NONE(Title of Class)

---

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

NONE(Title of Class)

---

Indicate
the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the Annual Report:

|Ordinary Shares with no par value | 50,058,476
|--------------------------------- | ----------
|(as of December 31, 2002)        

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes
[X]               No
[_]

Indicate
by check mark which financial statement item the registrant has elected to follow.

Item 17 [_]               Item 18 [X]

---

---



# TABLE OF CONTENTS

# Part I

|                                                                  | Page
|----------------------------------------------------------------- | ----
|Item 1.     Identity of Directors, Senior Management and Advisers |     
|Item 2.     Offer Statistics and Expected Timetable               |     
|Item 3.     Key Information                                       |     
|Selected Financial Data                                           |     
|Exchange Rate Information                                         |     
|Risk Factors                                                      |     
|Item 4.     Information on the Company                            |     
|Introduction                                                      |     
|History and Development of the Company                            |     
|Business Summary                                                  |     
|Segment Overview                                                  |     
|Strategy                                                          |     
|Business Segments                                                 |     
|Other Activities                                                  |     
|Acquisitions and Divestitures                                     |     
|Raw Materials and Energy                                          |     
|Research and Development                                          |     
|Intellectual Property                                             |     
|Environmental and Other Regulation                                |     
|Organizational Structure                                          |     
|Description of Property                                           |     
|Item 5.     Operating and Financial Review and Prospects          |     
|Basis of Presentation                                             |     
|Major Events in 2002                                              |     
|Financial Highlights                                              |     
|Overview  2002 Compared with 2001                                |     
|Selected Data by Business Segment                                 |     
|Summary by Business Segment  2002 Compared with 2001             |     
|Summary of Consolidated Results  2002 Compared with 2001         |     
|Summary by Business Segment  2001 Compared with 2000             |     
|Summary of Consolidated Results  2001 Compared with 2000         |     
|Liquidity and Capital Resources                                   |     
|Market Risks                                                      |     
|Critical Accounting Policies and Estimates                        |     
|New Accounting Standards                                          |     
|Outlook                                                           |     
|Item 6.     Directors, Senior Management and Employees            |     
|Directors and Senior Management                                   |     
|Compensation of Directors and Officers                            |     
|Incentive Plans                                                   |     
|Board Practices                                                   |     
|Employees                                                         |     
|Share Ownership                                                   |     
|Item 7.     Major Shareholders and Related Party Transactions     |     
|Major Shareholders                                                |     
|Related Party Transactions                                        |     
|Item 8.     Financial Information                                 |     
|Export Sales                                                      |     
|Legal Proceedings                                                 |     
|Dividend Policy                                                   |     
|Significant Changes                                               |     

i

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|                                                                                          | Page
|----------------------------------------------------------------------------------------- | ----
|Item 9.     The Offer and Listing                                                         |     
|Nature of Trading Market                                                                  |     
|Item 10.     Additional Information                                                       |     
|Code of Ethics                                                                            |     
|Articles of Association                                                                   |     
|Material Contracts                                                                        |     
|Exchange Controls and Other Limitations Affecting Security Holders                        |     
|Taxation                                                                                  |     
|Documents on Display                                                                      |     
|Item 11.     Quantitative and Qualitative Disclosures About Market Risk                   |     
|Interest-Rate Risk Management                                                             |     
|Foreign-Exchange Risk Management                                                          |     
|Commodity Risk Management                                                                 |     
|Stock Based Compensation Risk Management                                                  |     
|Item 12.     Description of Securities Other Than Equity Securities                       |     
|                                                                                         
|PART II                                                                                  
|                                                                                         
|Item 13.     Defaults, Dividend Arrearages and Delinquencies                              |     
|Item 14.     Material Modifications to the Rights of Security Holders and Use of Proceeds |     
|Item 15.     Certain Disclosures                                                          |     
|Controls and Procedures                                                                   |     
|Item 16.     Reserved                                                                     |     
|                                                                                         
|PART III                                                                                 
|                                                                                         
|Item 17.     Financial Statements                                                         |     
|Item 18.     Financial Statements                                                         |     
|Item 19.    Exhibits                                                                      |     
|Certification of Chief Executive Officer                                                  |     
|Certification of Chief Financial Officer                                                  |     
|Index to Consolidated Financial Statements                                                |     

---

ii

---



# INTRODUCTION

Celanese
AG is incorporated as a stock corporation organized under the laws of the
Federal Republic of Germany. As used in this Annual Report, Celanese
refers to Celanese AG, its consolidated subsidiaries and, except for accounting
purposes, its non-consolidated affiliates. For accounting purposes,
Celanese refers solely to Celanese AG and its consolidated
affiliates. See Note 1 to the Consolidated Financial Statements for Celanese
contained in this Annual Report (the Consolidated Financial
Statements).

---

# BASIS OF PRESENTATION

The
Consolidated Financial Statements were prepared in accordance with U.S.
Generally Accepted Accounting Principles (U.S. GAAP) for all periods
presented. The Consolidated Financial Statements reflect, for the periods
indicated, the financial condition, results of operations and cash flows of the
businesses transferred to Celanese from Hoechst Aktiengesellschaft, also
referred to as Hoechst, in a demerger that became effective on October 22, 1999.
The Consolidated Financial Statements and other financial information included
in this Annual Report, unless otherwise specified, have been presented to
exclude the effects of discontinued operations. The Consolidated Financial
Statements, for the periods prior to the effective date of the demerger from
Hoechst, assume that Celanese had existed as a separate legal entity with five
business segments, Acetyl Products, Chemical Intermediates, Acetate Products,
Technical Polymers Ticona and Performance Products, as well as the other
businesses and activities of Hoechst transferred to Celanese in the demerger.
The financial results of Celanese, prior to the effective date of the demerger,
have been carved out from the consolidated financial statements of Hoechst using
the historical results of operations and assets and liabilities of these
businesses and activities and reflect the accounting policies adopted by Hoechst
in the preparation of its financial statements and thus do not necessarily
reflect the accounting policies which Celanese might have adopted had it been an
independent company during those periods.

# CURRENCY TRANSLATION

Since
January 1, 1999 Celaneses Consolidated Financial Statements have been
preparted in euro. The Consolidated Financial Statements for the period ending
December 31, 1998 have been prepared using the Deutsche Mark or DM and have been
restated into euro using the official fixed conversion rate between the euro and
the Deutsche Mark of DM 1.95583 per 1.00. Celanese does not represent that
these restated euro amounts for the period ended December 31, 1998, actually
represent the DM amounts in the Consolidated Financial Statements as prepared or
could be converted into DM at the rate indicated. U.S. dollar or U.S.$ amounts
as of and for the year ended December 31, 2002 are unaudited, and have been
converted solely for the convenience of the readers for 2002 from euro into U.S.
dollars, at an exchange rate of U.S.$1.0485 per 1.00, the noon buying rate
in the City of New York for cable transfers in foreign currencies announced by
the Federal Reserve Bank of New York for customs purposes (the Noon Buying
Rate) on December 31, 2002. For information regarding recent rates of
exchange between euro and U.S. dollar, see Item 3. Key Information
Exchange Rate Information. Celanese does not represent that the U.S.
dollar amounts presented in the U.S. dollar convenience translation or any
amounts translated from euro into other currencies could have been converted
from euro at the rates indicated.

On
February 10, 2003, the Noon Buying Rate for the euro was U.S.$1.0740 per
1.00.

---

# FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE

Investors
are cautioned that the forward-looking statements contained in this Annual
Report involve both risk and uncertainty. Many important factors could cause
actual results to differ materially from those anticipated by these statements.
Many of these statements are macroeconomic in nature and are, therefore, beyond
the control of management. See Forward-Looking Statements May Prove
Inaccurate in Item 5. Operating and Financial Review and
Prospects.

1

---



# PART I

## Item 1. Identity of
Directors, Senior Management and Advisers

Not
applicable.

## Item 2. Offer
Statistics and Expected Timetable

Not
applicable.

## Item 3. Key Information

## Selected Financial Data

The
following table presents selected consolidated financial information of
Celanese. You should read this table in conjunction with Item 5. Operating
and Financial Review and Prospects, the audited Consolidated Financial
Statements and the notes to those statements that are included elsewhere in this
Annual Report.

The
balance sheet data set forth below for 2002 and 2001, and the statement of
operations data for 2002, 2001 and 2000, all of which are set forth below, are
derived from the audited Consolidated Financial Statements included elsewhere in
this Annual Report and should be read in conjunction with those financial
statements and the notes thereto. The balance sheet data for 2000, 1999 and 1998
and the statement of operations data for 1999 and 1998 are derived from audited
Consolidated Financial Statements not included in this Annual Report.

2

---



|                                              | Year Ended December 31,
|--------------------------------------------- | -----------------------
|
|
|
|
|Statement of Operations Data:                 |                        
|Net sales                                     |                        
|Cost of sales                                 |                        
|Gross profit                                  |                        
|Selling, general and administrative expenses  |                        
|Research and development expenses             |                        
|Special charges, net(2)                       |                        
|Operating profit (loss)(3)                    |                        
|Interest and other income, net(4)             |                        
|Income tax benefit (provision)                |                        
|Minority interests                            |                        
|Earnings (loss) from continuing operations    |                        
|Earnings (loss) from discontinued operations  |                        
|Extraordinary loss, net of income tax         |                        
|Cumulative effect of changes in accounting    |                        
|principles, net of income tax                 |                        
|Net earnings (loss)                           |                        
|Earnings (loss) per common share             |                        
|basic and diluted(5)                          |                        
|                                             
|Balance Sheet Data:                           |                        
|Total assets                                  |                        
|Debt                                          |                        
|Shareholders equity                          |                        
|Dividends paid per share(6)                   |                        
|Common stock                                  |                        
|Weighted average shares  basic               |                        
|and diluted (in thousands)                    |                        
|                                             
|Other Data:                                   |                        
|Operating margin (%)                          |                        
|Depreciation and amortization of tangible     |                        
|and intangible assets                         |                        
|Capital expenditures on tangible fixed assets |                        
|Trade Working Capital(7)                      |                        
|Number of employees on a continuing           |                        
|basis (end of period) in thousands            |                        

---

|(1) |  | The U.S.$ figures are
unaudited and have been translated solely for the convenience of the reader at an exchange
rate of U.S. $1.0485 per 1.00, the noon buying rate of the Federal Reserve Bank of
New York on December 31, 2002.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Special
charges represent charges for the impairment of assets, litigation charges and
restructuring charges, which include employee termination costs, plant and office closures
and other costs. See Note 26 to the Consolidated Financial Statements.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Hoechst
acquired substantially all the 49 percent minority interest in its Mexican subsidiary,
Grupo Celanese S.A., in December 1998, and contributed it to Celanese. If this minority
interest had been contributed to Celanese as of January 1, 1998, Celaneses operating
profit for 1998 would have been reduced by 30 million, because of the amortization
of goodwill associated with the acquisition.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Interest and other
income, net, represents equity in net earnings of affiliates, interest expense, and
interest and other income, net, as set forth in the Consolidated Financial
Statements.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Earnings
(loss) per common share  basic and diluted is calculated by dividing net earnings
(loss) by the weighted average shares outstanding. At December 31, 2002, Celanese did not
have any dilutive common stock equivalents. On the effective date of the demerger, Hoechst
issued 55,915,369 shares of Celanese to existing Hoechst shareholders; these shares are
deemed to be outstanding for 1999 and all prior periods presented.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | See Item 8.
Financial Information  Dividend Policy.
|--- |  | ------------------------------------------------------

|(7) |  | Celanese defines trade
working capital as trade accounts receivable from third parties and affiliates net of
allowance for doubtful accounts, plus inventories, less trade accounts payable to third
parties and affiliates.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

---



## Exchange Rate Information

As
noted in Currency Translation above, Celanese began using the euro
as its reporting currency on January 1, 1999 and pays dividends on its shares in
euro. Furthermore, prices quoted for the Celanese shares on the Frankfurt Stock
Exchange are quoted in euro.

Fluctuations
in the exchange rate between the euro and the U.S. $ will affect:

| |  |  | The
U.S. $ equivalent for dividends received by U.S. holders of Celanese shares; and
| | - |  | ------------------------------------------------------------------------------------

| |  |  | The
trading market price of Celanese shares on the Frankfurt and New York Stock Exchanges.
| | - |  | ------------------------------------------------------------------------------------------

The
table below sets forth the Noon Buying Rates for the Deutsche Mark or DM versus
the U.S. $, restated in euro for 1998, and, for all subsequent periods, sets
forth the Noon Buying Rates for the euro in U.S. $. For the calculation of the
euro amounts for 1998, Celanese has restated the applicable Noon Buying Rate for
the DM per U.S. $ into euro at the official fixed DM/euro conversion rate of DM
1.95583 per 1.00. This restatement matches the restatement into euro of
the Consolidated Financial Statements, which, for 1998, were prepared in
Deutsche Mark and restated into euro. Celanese does not represent that the U.S.
$ amounts referred to below could have been or could be converted into euro at
any particular rate indicated. The average amounts set forth below under
Average are calculated as the average of the Noon Buying Rates on
the last business day of each month.

|Year                                 | Low |        | High |        | Average |        | End |       
|------------------------------------ | --- | ------ | ---- | ------ | ------- | ------ | --- | ------
|1998                                 |     | 1.0548 |      | 1.2178 |         | 1.1115 |     | 1.1733
|1999                                 |     | 1.0080 |      | 1.1825 |         | 1.0660 |     | 1.0046
|2000                                 |     | 0.8270 |      | 0.9757 |         | 0.9231 |     | 0.9388
|2001                                 |     | 0.8455 |      | 0.9308 |         | 0.8909 |     | 0.8901
|2002                                 |     |        |      |        |         |        |     |       
|July                                 |     | 0.9730 |      | 1.0156 |         | 0.9935 |     | 0.9769
|August                               |     | 0.9640 |      | 0.9882 |         | 0.9781 |     | 0.9806
|September                            |     | 0.9685 |      | 0.9959 |         | 0.9806 |     | 0.9879
|October                              |     | 0.9708 |      | 0.9881 |         | 0.9812 |     | 0.9881
|November                             |     | 0.9895 |      | 1.0139 |         | 1.0013 |     | 0.9932
|December                             |     | 0.9927 |      | 1.0485 |         | 1.0194 |     | 1.0485
|2003                                 |     |        |      |        |         |        |     |       
|January                              |     | 1.0469 |      | 1.0861 |         | 1.0622 |     | 1.0739
|February (through February 10, 2003) |     | 1.0740 |      | 1.0875 |         | 1.0808 |     | 1.0740

For
a more complete discussion of exchange rate fluctuations and the hedging
techniques used by Celanese to manage its exposure to these fluctuations, please
see Risk Factors set forth below and Item 5. Operating and
Financial Review and Prospects  Market Risks and Item 11.
Quantitative and Qualitative Disclosures About Market Risk.

## Risk Factors

Many
factors could have an effect on Celaneses financial condition, cash flows
and results of operations. Celanese is subject to various risks resulting from
changing economic, environmental, political, industry, business and financial
conditions. The principal factors are described below.

Celanese is an
international company and is exposed to general economic, political and
regulatory conditions and risks in the countries in which it has significant
operations

Celanese
operates in the global market and has customers in many countries. Celanese has
major facilities located in North America, Europe and the Pacific Rim, including
facilities in China, Japan, Korea and Saudi Arabia operated through joint
ventures. Its principal customers are similarly global in scope, and the prices
of its most significant products are typically world market prices.
Consequently, Celaneses business and financial results are affected
directly and indirectly by world economic, political and regulatory conditions.

4

---



Conditions
such as the uncertainties associated with war, terrorist activities, or
political instability in any of the countries in which Celanese operates could
affect Celanese by causing delays or losses in the supply or delivery of raw
materials and products as well as increased security costs, insurance premiums
and other expenses. These conditions could also result in or lengthen economic
recession in the United States, Germany, Asia or elsewhere. Moreover, changes in
laws or regulations, such as unexpected changes in regulatory requirements
(including import or export licensing requirements), or changes in the reporting
requirements of United States, German or European Union governmental agencies,
could increase the cost of doing business in these regions. Any of these
conditions may have an effect on Celaneses business and financial results
as a whole and may result in volatile current and future prices for Celanese
shares.

Cyclicality in the
industrial chemicals industry has in the past and may in the future result in
reduced operating margins or operating losses

Consumption
of the basic chemicals that Celanese manufactures, in particular those in acetyl
and acrylate products, such as methanol, formaldehyde, acetic acid, vinyl
acetate monomer, and acrylic acid, has increased significantly over the past 30
years. Despite this growth in consumption, producers have experienced
alternating periods of inadequate capacity and excess capacity for these
products. Periods of inadequate capacity, including some due to raw material
shortages, have usually resulted in increased selling prices and operating
margins. This has often been followed by periods of capacity additions, which
have resulted in declining capacity utilization rates, selling prices and
operating margins.

Celanese
expects that these cyclical trends in selling prices and operating margins
relating to capacity shortfalls and additions will likely persist in the future,
principally due to the continuing combined impact of five factors:

| |  |  | Significant
capacity additions, whether through plant expansion or construction, can take  two to
three years to come on stream and are therefore necessarily based upon estimates of
future demand.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | When
demand is rising, competition to build new capacity may be heightened because new
capacity tends to be more profitable, with a lower marginal cost of production. This
tends  to amplify upswings in capacity.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | When
demand is falling, the high fixed cost structure of the capital intensive  chemicals
industry leads producers to compete aggressively on price in order to  maximize capacity
utilization.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | As
competition in these products is focused on price, being a low-cost producer  is critical
to profitability. This favors the construction of larger plants,  which maximize
economies of scale, but which also lead to major increases in  capacity which can
outstrip current growth in demand.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Cyclical
trends in general business and economic activity produce swings in  demand for chemicals.
| | - |  | --------------------------------------------------------------------------------------------------

Celanese
believes that the basic chemicals industry, particularly in the commodity
chemicals manufactured by Celaneses Acetyl Products and Chemical
Intermediates segments, is currently characterized by overcapacity, and that
there may be further capacity additions in the next few years.

The length and depth
of product and industry business cycles of Celaneses markets, particularly
in the automotive, electrical, construction and textile industries, may result
in reduced operating margins or operating losses

Some
of the markets in which Celaneses customers participate, such as the
automotive, electrical, construction and textile industries, are cyclical in
nature, thus posing a risk to Celanese which is beyond its control. These
markets are highly competitive, to a large extent driven by end-use markets, and
may be subject to overcapacity, all of which may affect demand for and pricing
of Celaneses products.

Celanese
is subject to risks associated with the increased volatility in raw materials prices and
the availability of key raw  materials

Celanese
purchases significant amounts of natural gas, ethylene, butane and propylene from third
parties for use in its production of basic chemicals in the Acetyl Products and Chemical
Intermediates segments, principally methanol, formaldehyde, acetic acid, vinyl acetate
monomer, as well as acrylates and oxo products. Celanese uses a portion of its output of
these chemicals, in turn, as inputs in the production of further products in the Acetyl
Products, Chemical Intermediates and Acetate Products segments, as well as some products
in the Technical

5

---



Polymers Ticona, also referred to
as Ticona, and Performance Products  segments. Celanese also purchases significant
amounts of cellulose or wood pulp  for use in its production of cellulose acetate in the
Acetate Products segment.  Celanese purchases significant amounts of natural gas,
electricity, coal and  fuel oil to supply the energy required in its production processes.

Although
Celanese has agreements providing for the supply of natural gas, ethylene,
propylene, wood pulp, electricity, coal and fuel oil, the contractual prices for
these raw materials and energy vary with market conditions and may be highly
volatile. Factors which have caused volatility in Celaneses raw material
prices in the past and which may do so in the future include:

| |  |  | Shortages
of raw materials due to increasing demand, e.g., from growing uses or  new uses;
| | - |  | ------------------------------------------------------------------------------------------

| |  |  | Capacity
constraints, e.g., due to construction delays, strike  action or involuntary shutdowns;
| | - |  | ------------------------------------------------------------------------------------------------

| |  |  | The
general level of business and  economic activity; and
| | - |  | ---------------------------------------------------------

| |  |  | The
direct or indirect effect of governmental  regulation.
| | - |  | ----------------------------------------------------------

Celanese
is striving to improve profit margins of many of its products through price
increases when warranted and accepted by the market, however, Celaneses
operating margins may decrease if it cannot pass on increased raw material
prices to customers, or Celanese may not be able to capture the benefit of raw
material price declines if raw material prices fall to levels below those at
which Celanese is committed to purchase under forward purchase contracts. Even
in periods during which raw material prices decline, Celanese may suffer
decreasing operating profit margins if raw material price reductions occur at a
slower rate than decreases in the selling prices of Celaneses products.

A
substantial portion of Celaneses products and raw materials are
commodities whose prices fluctuate as market supply/demand fundamentals change.
Celanese manages its exposure through the use of derivative instruments and
forward purchase contracts for commodity price hedging, entering into long-term
supply agreements, and multi-year purchasing and sales agreements.
Celaneses policy allows the forward purchase of up to 80 percent of its
natural gas and butane requirements, generally for up to 18 months using forward
purchase or cash-settled swap contracts. During 2002, Celanese entered into
forward purchase and cash-settled swap contracts for approximately 50 percent of
its estimated natural gas requirements, generally for up to three to six months
forward. As these forward contracts expire, Celanese may be exposed to future
price fluctuations if the forward purchase contracts are not replaced, or if it
elects to replace them, Celanese may have to do so at higher costs. In the first
quarter of 2003, Celanese also purchased option contracts related to approximately 5
to 10 percent of its ethylene requirements. In addition, in 2002 Celanese
pre-paid $25 million (24 million) in a cost-based supply agreement and
anticipates additional payments approximating 70 million over the next
three years. Although Celanese seeks to offset increases in raw material prices
with corresponding increases in the prices of its products, it may not be able
to do so, and there may be periods when such product price increases lag behind
raw material cost increases. In the future, Celanese may modify its practice of
purchasing a portion of its commodity requirements forward, and consider
utilizing a variety of other raw material hedging instruments in addition to
forward purchase contracts in accordance with changes in market conditions.

Celanese
has a policy of maintaining, when available, multiple sources of supply for raw
materials. However, some of Celaneses individual plants may have single
sources of supply for some of their raw materials, such as carbon monoxide,
acetaldehyde and wood pulp. There can be no assurance that the ability to obtain
sufficient raw materials will not be adversely affected by unforeseen
developments that would cause an interruption in supply. Even if Celanese has
multiple sources of supply for a raw material, there can be no assurance that
these sources can make up for the loss of a major supplier. Nor can there be any
guarantee that profitability will not be affected should Celanese be required to
qualify additional sources of supply in the event of the loss of a sole or a
major supplier.

Failure to develop new
products and production technologies or to implement productivity and cost
reduction initiatives successfully may harm Celaneses competitive position

Celaneses
operating results, especially in its Performance Products and Technical Polymers
Ticona segments, depend significantly on the development of commercially viable
new products, product grades and applications, as well as production
technologies. If Celanese is unsuccessful in developing new products,
applications and production processes in the future, its competitive position
and operating results will be negatively affected.

6

---



Likewise, Celanese has  undertaken
and is continuing to undertake initiatives in all segments to improve  productivity and
performance and to generate cost savings. There can, however,  be no assurance that these
initiatives will be completed or beneficial or that  the estimated cost savings from such
activities will be realized.

Environmental
liabilities and compliance costs may have a significant negative effect on Celaneses
operating results

Costs
related to Celaneses compliance with and potential obligations under
environmental laws for remediation of contaminated sites may have a significant
negative impact on its operating results. These include obligations related to
sites currently or formerly owned or operated by Celanese, or where waste from
its operations was disposed. Celanese also has obligations related to the
indemnity agreement contained in the demerger and transfer agreement between
Celanese AG and Hoechst, also referred to as the demerger agreement.
Celaneses accruals for environmental remediation obligations may be
insufficient if the assumptions underlying those accruals prove incorrect or if
Celanese is held responsible for currently undiscovered contamination. See
Celanese and Hoechst have obligations to pay each other certain amounts,
some of which are not yet determinable below, Item 4. Information on
the Company  Environmental and Other Regulation, and Notes 24 and 25 to
the Consolidated Financial Statements.

Stricter
environmental, safety and health laws, regulations and enforcement policies
could result in substantial costs and liabilities to Celanese and could subject
Celaneses handling, manufacture, use, reuse or disposal of substances or
pollutants to more rigorous scrutiny than at present. Consequently, compliance
with these laws could result in significant capital expenditures as well as
other costs and liabilities and materially adversely affect Celaneses
business and operating results.

Furthermore,
Celanese is involved in several claims, lawsuits and administrative proceedings
relating to environmental matters. While Celanese does not believe, based upon
currently available facts, that the ultimate resolution of any such pending
matters will have a material adverse effect on Celaneses operating
results, an adverse outcome in any of them may negatively affect Celaneses
earnings in a particular reporting period.

Changes in
environmental, health and safety regulatory requirements could have a
significant negative effect on the demand for Celaneses products

New
or revised governmental regulations relating to health, safety and the
environment may also affect demand for Celaneses products.

Various
United States programs, including the Voluntary Childrens Chemical
Evaluation Program and High Production Volume Chemical Initiative, and various
European Commission programs, including the White Paper on Strategy for a Future
Chemicals Policy, will potentially require toxicological testing and risk
assessments of a wide variety of chemicals, including chemicals used or produced
by Celanese.

Pursuant
to the European Union regulation on Risk Assessment of Existing Chemicals, the
European Chemicals Bureau of the European Commission has been conducting risk
assessments on approximately 140 major chemicals. Some of the chemicals
initially being evaluated include competitors products, such as styrene
and 1,3-butadiene, as well as vinyl acetate monomer or VAM, which Celanese also
produces. These risk assessments entail a multi-stage process to determine to
what extent the European Commission should classify the chemical as a carcinogen
and, if so, whether this classification and related labeling requirements should
apply only to finished products that contain specified threshold concentrations
of a particular chemical. In the case of VAM, a final ruling is not expected
until the end of 2003. Celanese and other VAM producers are participating in
this process with detailed scientific analyses supporting the industrys
position that VAM is not a probable human carcinogen and that labeling of final
products should not be required but that, if it is, should only be at relatively
high ppm levels. It is not possible for Celanese to predict the outcome or
effect of any final ruling.

Depending
on the outcome of the above-mentioned assessments in the United States and
Europe, additional requirements may be placed on the production, handling,
labeling or use of the subject chemicals. Such additional requirements could
increase the cost incurred by Celaneses customers to use its chemical
products and otherwise limit the use of these products, which could adversely
affect the demand for these products.

7

---



Celaneses
production facilities handle the processing of some volatile and hazardous
materials which subject Celanese to operating risks which could adversely affect
Celaneses operating results

Celaneses
operations are subject to operating risks associated with chemical
manufacturing, including the related storage and transportation of raw
materials, products and wastes. These hazards include, among other things:

| |  |  | Pipeline
and storage tank leaks and ruptures;
| | - |  | ---------------------------------------------

| |  |  | Explosions
and fires; and
| | - |  | -------------------------

| |  |  | Discharges
or releases of toxic or hazardous substances.
| | - |  | --------------------------------------------------------

These
operating risks can cause personal injury, property damage and environmental
contamination, and may result in the shutdown of affected facilities and the
imposition of civil or criminal penalties. The occurrence of any of these events
may materially adversely affect the productivity and profitability of a
particular manufacturing facility and Celaneses operating results.

Celanese
maintains property, business interruption and casualty insurance which it
believes is in accordance with customary industry practices, but Celanese cannot
provide any assurance that this insurance will be adequate to fully cover all
potential hazards incidental to its business.

For
more detailed information on environmental issues, see Item 4. Information on the
Company  Environmental and Other Regulations and Note 25 to the Consolidated
Financial Statements

Fluctuations in
exchange and interest rates may affect Celaneses operating results

Celanese
is exposed to market risk through commercial and financial operations.
Celaneses market risk consists principally of exposure to fluctuations in
currency exchange and interest rates.

As
Celanese conducts a significant portion of its operations outside the euro zone,
fluctuations in currencies of countries outside the euro zone, especially the
U.S. dollar, may materially affect Celaneses operating results. For
example, changes in currency exchange rates may affect:

| |  |  | The
relative prices at which Celanese and its competitors sell products in the  same market;
and
| | - |  | ------------------------------------------------------------------------------------------------

| |  |  | The
cost of items required in Celaneses  operations.
| | - |  | -----------------------------------------------------

From
time to time, Celanese uses financial instruments to hedge its  exposure to foreign
currency fluctuations. The notional amounts under such  foreign currency contracts
outstanding at December 31, 2002 were 955  million.

Celanese
holds a variety of interest rate sensitive assets and liabilities to manage the
liquidity and cash needs of its day-to-day operations. Celanese is primarily
exposed to changes in interest rates in the U.S. dollar and the euro. To manage
these risks, Celanese enters into interest rate swap agreements to reduce the
exposure of interest rate risk inherent in Celaneses debt portfolio.
Celanese uses swaps for hedging purposes only. The maturities of these swaps
depend on the underlying debt portfolio.

Significant changes in
pension fund investment performance or assumptions relating to pension costs may
have a material effect on the valuation of pension obligations, the funded
status of pension plans, and Celaneses pension costs.

Celaneses
funding policy for pension plans is to accumulate plan assets that, over the
long run, will approximate the present value of projected benefit obligations.
Celaneses pension cost is materially affected by the discount rate used to
measure pension obligations, the level of plan assets available to fund those
obligations at the measurement date and the expected long-term rate of return on
plan assets. Significant changes in investment performance or a change in the
portfolio mix of invested assets can result in corresponding increases and
decreases in the valuation of plan assets, particularly equity securities, or in
a change of the expected rate of return on plan assets. A change in discount
rate would result in a significant increase or decrease in the valuation of
pension obligations, affecting the reported funded status of Celaneses
pension plans as well as the net periodic pension cost in the following
financial year. Similarly, changes in the expected return on plan assets
assumption can result in significant changes in the net periodic pension cost of
the following financial year. For further information see Item 5:
Operating and Financial Review and Prospects  Critical Accounting
Policies and Note 19 to the Consolidated Financial Statements.

8

---



Celanese and
Hoechst have obligations to pay each other certain amounts, some of which are not yet
determinable

Under
the demerger agreement, Celanese agreed to indemnify Hoechst for environmental
liabilities that Hoechst may incur with respect to Celaneses German
production sites, which were transferred from Hoechst to Celanese in connection
with the demerger. Celanese also agreed to indemnify Hoechst against liabilities
for environmental damages or contamination arising under 19 divestiture
agreements entered into by Hoechst prior to the demerger. Celaneses
obligation regarding two of these agreements had been settled as of December 31,
2002. As the indemnification obligations depend on the occurrence of
unpredictable future events, the costs associated with them are not yet
determinable and may materially affect operating results.

Celaneses
obligation to indemnify Hoechst against liabilities for environmental
contamination in connection with the divestiture agreements is subject to the
following thresholds:

| |  |  | Celanese
will indemnify Hoechst for the total amount of these liabilities up to 250 million;
| | - |  | ---------------------------------------------------------------------------------------------

| |  |  | Hoechst
will bear the full amount of those liabilities between 250 million and 750
million; and
| | - |  | -------------------------------------------------------------------------------------------------

| |  |  | Celanese
will indemnify Hoechst for one third of those liabilities for amounts exceeding 750
million.
| | - |  | ------------------------------------------------------------------------------------------------------

Celanese
has made payments through December 31, 2002 of 32 million for environmental
contamination liabilities in connection with the divestiture agreements. As of December
31, 2002, Celanese has reserves of 57 million for this contingency,
and may be required to record additional reserves in the future.

Also,
Celanese has undertaken in the demerger agreement to indemnify Hoechst to the
extent that Hoechst is required to discharge liabilities, including tax
liabilities, in relation to assets included in the demerger, where such
liabilities have not been demerged due to transfer or other restrictions.
Celanese did not make any payments to Hoechst in either 2001 or 2002 in
connection with this indemnity.

Under
the demerger agreement, Celanese will also be responsible, directly or
indirectly, for all of Hoechsts obligations to past employees of
businesses that were demerged to Celanese. Under the demerger agreement, Hoechst
agreed to indemnify Celanese from liabilities (other than liabilities for
environmental contamination) stemming from the agreements governing the
divestiture of Hoechsts polyester businesses, which were demerged to
Celanese, so far as such liabilities relate to the European part of that
business. Hoechst has also agreed to bear 80 percent of the financial
obligations arising in connection with the government investigation and
litigation associated with the sorbates industry for price fixing described in
Item 8. Financial Information  Legal Proceedings and Note 24
to the Consolidated Financial Statements, and Celanese has agreed to bear the
remaining 20 percent.

Kuwait Petroleum
Corporation holds a significant number of shares in Celanese and may be able to
block some corporate actions

Kuwait
Petroleum Corporation owned 28.8 percent of the Celanese shares outstanding as
of December 31, 2002. Kuwait Petroleum Corporation thus has the ability, as a
matter of German corporate law, to block some corporate actions by Celanese such
as mergers, spin-offs and capital measures which require either a majority of 75
percent of the votes cast or 75 percent of the share capital represented at a
shareholders meeting. Celanese is not aware of any voting agreements or
agreements of any kind between Kuwait Petroleum Corporation and any of
Celaneses other shareholders. In addition, an officer of Kuwait Petroleum
Corporation has been elected as one of the shareholder representatives on the
Supervisory Board of Celanese.

## Item 4. Information on the Company

## Introduction

Celanese
AG was incorporated as Diogenes Erste Vermögensverwaltungs GmbH as a stock
corporation organized under the laws of the Federal Republic of Germany on
November 22, 1996. It changed its name to Celanese AG upon its demerger from
Hoechst on October 22, 1999. Celaneses registered office is located at
Frankfurter Straße 111, 61476 Kronberg/Taunus, Germany, telephone +49 69
305 16000.

9

---



## History and
Development of the Company

Celanese
traces its roots to 1918 when The American Cellulose & Chemical
Manufacturing Company was founded in the United States by two Swiss brothers,
Drs. Camille and Henry Dreyfus, to produce acetate fibers for fabrics used in
linings, apparel and home furnishings.

Following
the successful start-up of this company, it expanded its operations in the
United States and changed its name to Celanese. In the mid-1940s, Celanese
commenced operation of facilities for the production of basic chemicals and
chemical intermediates. In the 1950s, Celanese became a supplier of acetate tow.

In
the 1960s, Celanese further expanded the scope of its activities. Celanese
started production of non-cellulosic fibers, such as polyester and nylon, and
developed and commercialized acetal copolymer resin technology.

Since
the mid-1940s, Celanese constructed and acquired significant production and
research facilities in North America and abroad, and also entered into a number
of joint ventures in North America, Europe and the Far East with other acetate,
basic chemicals and plastics producers. In particular, in the technical polymers
area, Celanese entered into two joint ventures, one with Hoechst, which was
named Ticona, and another with the Japanese company Daicel Chemical Industries
Ltd. (Daicel), named Polyplastics Co., Ltd.
(Polyplastics), to manufacture and market acetal copolymer resins
based on Celanese licensed technology.

In
1987, Hoechst acquired Celanese Corporation. Following the acquisition, Hoechst
proceeded to integrate its complementary chemicals and technical polymers
operations with the businesses of Celanese, establishing a combined basic
chemicals, acetates and technical polymers business of global scale.

In
1994, Hoechst embarked on a comprehensive review and re-evaluation of its
strategic goals. Hoechst decided to concentrate on life sciences and to transfer
operational responsibility for the different businesses to the management of
legally separate companies. In implementing the strategy to realign and to
change the focus of its business, Hoechst restructured and divested many of its
activities in the industrial sector. As part of this process, Hoechst
shareholders, at an extraordinary general meeting on July 15 and 16, 1999,
approved the demerger, or spin-off, to Celanese AG of the basic chemicals,
acetate and technical polymers businesses that were reported by Hoechst in its
Celanese and Ticona segments, as well as some other businesses and activities of
Hoechst. The demerger became effective on October 22, 1999. On that date,
Hoechst distributed all of the outstanding shares of Celanese to Hoechsts
shareholders, with each Hoechst shareholder receiving one Celanese share for
every 10 Hoechst shares owned.

## Business Summary

Celanese
is a leading global industrial chemicals company with strong competitive
positions in its major products and production technologies. Its business
involves processing chemical raw materials, such as ethylene and propylene, and
natural products, including natural gas and wood pulp, into value-added
chemicals and chemical-based products. Celaneses leadership position is
based on two key factors: its significant market shares and competitive cost
structures in its major products. Celaneses competitive cost structures
are based on economies of scale, vertical integration, technical know-how and
the use of advanced technologies. The Celanese portfolio consists of five main
business segments: Acetyl Products, Chemical Intermediates, Acetate Products,
Technical Polymers Ticona and Performance Products.

In
2002, Celanese had net sales of 4,325 million and an operating profit of
155 million from continuing operations. At December 31, 2002, Celanese had
approximately 10,700 employees worldwide. As of December 31, 2002, Celanese had
26 production plants and four research centers in eleven countries. Most of
Celaneses facilities are located in the Americas, principally in the three
North America Free Trade Agreement, or NAFTA, countries: the United States,
Canada and Mexico. Celanese also has major operations, including significant
joint ventures, in Asia. In 2002, 52 percent of net sales was derived from sales
in North America, 36 percent from sales in Europe, 11 percent from sales in Asia
and Australia and 1 percent from sales in the rest of the world. Celanese has a
large and diverse global customer base consisting principally of major
industrial companies. In 2002, sales to the 10 largest customers of Celanese
accounted for less than 25 percent of its net sales and the single largest
customer represented less than 5 percent of its net sales.

10

---



Celaneses
aggregate capital expenditures for property, plant and equipment were 218 million in
2002, 217 million in 2001, and 218 million in 2000. North America and Europe
accounted for 53 percent and 47 percent, respectively, of Celaneses capital
expenditures in 2002. The capital expenditures were financed by means of Celaneses
operating cash flows, cash reserves and additional funds drawn down from existing credit
facilities. See also Business Segments for capital expenditures by business
segment. For a description of principal acquisitions and dispositions of businesses during
the last three years, see Acquisitions and Divestitures, Item 5.
Operating and Financial Review and Prospects  Summary of Consolidated Results 
2002 Compared to 2001  Discontinued Operations for the Years Ended December 31,
2002, 2001 and 2000 and Note 6 to the Consolidated Financial Statements.

As
of December 31, 2002, Celanese had 50,058,476 shares outstanding and
approximately 100,000 shareholders. Its ordinary shares are traded on the
Frankfurt Stock Exchange under the symbol CZZ and on the New York Stock Exchange
under the symbol CZ.

## Segment Overview

Celanese
is an integrated company that operates through five principal business segments:
Acetyl Products, Chemical Intermediates, Acetate Products, Technical Polymers
Ticona and Performance Products.

Acetyl
Products.This segment produces and supplies acetyl products, including
acetic acid, acetate esters, vinyl acetate monomer, and polyvinyl alcohol, and
as of December 31, 2002, emulsions and emulsion powders. Acetic acid is a
commodity used in the production of other basic chemicals. Acetate esters are
used in coatings and inks. Vinyl acetate monomer is primarily used in a variety
of adhesives, paints and coatings. Polyvinyl alcohol is made from vinyl acetate
monomer and is used in adhesives, building products, paper coatings, films and
textiles. Emulsions and emulsion powders are a key component of water-based
quality surface coatings, adhesives, non-woven textiles and other applications.
Celanese is the worlds leading producer of acetic acid and vinyl acetate
monomer and the largest North American producer of methanol, the major raw
material used for the production of acetic acid. Celanese is the largest
polyvinyl alcohol producer in North America and the second largest producer in
the world. The emulsions and emulsion powders business, which Celanese acquired
from Clariant AG on December 31, 2002, holds a number two position in
conventional emulsions (excluding styrene butadiene resins or SBRs) in Europe
and a number one position in European VAM-based emulsions. The business is also
a leading supplier of emulsion powders globally.

Chemical
Intermediates.This segment produces and supplies chemical intermediates,
including acrylic acid, acrylate esters, organic solvents and other
intermediates. Acrylic acid and acrylate esters are used in the manufacture of
superabsorbent polymers, paints and coatings, adhesives and in water treatment
applications. Most of the other chemicals produced in this segment are organic
solvents and intermediates for pharmaceutical, agricultural and chemical
products.

Acetate
Products.This segment primarily produces and supplies acetate tow (filter
products) and acetate filament. Products from this segment are found in
cigarette filters, fashion apparel, linings, and home furnishings. Celanese is
one of the worlds leading producers of acetate tow and acetate filament,
including production by its joint ventures in Asia.

Technical
Polymers Ticona.This segment develops, produces and supplies a broad
portfolio of high performance technical polymers for application in automotive
and electronics products and in other consumer goods, often replacing metal or
glass. Together with its 45 percent-owned affiliate Polyplastics, its 50
percent-owned affiliate Korea Engineering Plastics Company Ltd., and Fortron
Industries, its 50-50 joint venture with Kureha Chemicals Industry of Japan,
Celanese is a leading participant in the global technical polymers business.

Performance
Products.This segment consists of Nutrinova, the food ingredients business,
which produces and sells high intensity sweeteners and food protection
ingredients, such as sorbic acids and sorbates, for the food, beverage and
pharmaceuticals industries.

11

---



The
table below illustrates each segments share of total segment net sales to
external customers for the years ended December 31, 2002, 2001 and 2000.

# Net Sales to External Customers by Segment

|                          | Year Ended December 31,
|------------------------- | -----------------------
|
|
|
|Acetyl Products           |                        
|Chemical Intermediates    |                        
|Acetate Products          |                        
|Technical Polymers Ticona |                        
|Performance Products      |                        

---

|(1) |  | The
percentages in  this column represent the percentage contribution of each segment to the
total  of all segments.
|--- |  | --------------------------------------------------------------------------------------------------------------------

Other Activities

The
portfolio of Celanese contains other businesses and activities separate from its
principal chemical operations, which consists primarily of general corporate
functions, captive insurance companies, the innovative products subsidiaries
Celanese Ventures GmbH and Celanese Advanced Materials, Inc., companies that
provide infrastructure services, and other ancillary businesses. Celanese
Advanced Materials, Inc. consists of the high performance polymer,
polybenzimidazole or PBI, and the Vectran® polymer fiber product lines.

## Strategy

Celanese
is continuing on its strategic course of pursuing growth opportunities, driving
productivity, optimizing its portfolio, and ensuring sound financial management.

Celanese is pursuing
growth opportunities internally by increasing and creating more efficient
production capacities and developing new products and externally by extending
its value chain and portfolio into higher value products and strengthening its
presence in various geographic regions.

Celanese
is extending its strong value chain in its Acetyl Products segment into higher
value products. At the end of 2002, it acquired Clariant AGs European
emulsions and global emulsion powders business for 147 million. The
business holds leading positions in emulsions and emulsion powders in Europe and
globally. The products serve as the primary ingredients in quality surface
coatings, adhesives, non-woven textiles and other applications.

Early
in 2002, Celanese and Hatco Corporation formed EsteCH, a joint venture for neo
polyol esters, a product used in synthetic lubricants for specialized
applications in the aerospace, automotive and refrigeration industries. EsteCH
began construction of a neo polyol esters plant at Celaneses Oberhausen,
Germany site in October 2002. The plant is scheduled to start up in the fourth
quarter of 2003. Celanese will provide the joint venture with its most important
raw materials, carboxylic acids and polyols.

With
the completion of its 30,000 ton GUR® ultra-high molecular weight
polyethylene plant in Bishop, Texas, Celanese doubled its capacity for this
highly wear-resistant polymer and further improved manufacturing efficiencies
and product quality, placing Celanese in a position to meet growing market
demand. The expansion of its Vectra® liquid crystal polymer plant in
Shelby, North Carolina to 6,000 tons per year anticipates customer needs for
both existing and emerging markets, such as medical applications. At the
beginning of 2002, the U.S. Food and Drug Administration approved Vectras
use in packaging materials for pharmaceuticals and food ingredients. The
expansion of its polyacetal facility in Kelsterbach, Germany to 100,000 metric
tons per year, which began in the fourth quarter of 2002, will enable Celanese
to produce an even greater variety of standard and specialty products to meet
customer demand.

12

---



Celanese
also made major progress in developing new products. In October 2002, the
company opened the worlds first pilot plant to manufacture
high-temperature membrane electrode assemblies for use in fuel cells. Located in
Frankfurt, Germany, the plant will allow Celanese to supply its partners with
product and to further develop its fuel cell technology for automotive,
telecommunication and residential uses.

In
2002, Celaneses Nutrinova food ingredients business began market
development of the omega-3 fatty acid, docosahexanoeic acid (DHA), which will be
sold under the brand name DHActive. The product has a broad range of
health benefits for use in food, dietary supplements, pharmaceuticals and animal
feed.

During
2002, Ticona continued market development for Topas® cycloolefin
copolymers, or COCs, in medical, optical and film applications. Future plans for
the COC business include exploring strategic alliances with suitable partners,
to develop this business fully and more quickly.

Celanese
is building on its over 30 years of experience in Asia to expand its already
strong presence in this growing market. Celaneses Ticona segment and its
existing Asian partners announced plans to construct a 60,000-metric ton
polyacetal plant in China, the worlds fastest growing engineering plastics
market. The new plant is expected to start operations during 2005.

Celaneses
Acetyl Products segment, with a major production facility in Singapore and a
growing sales presence in China, is in a good position to support the expanding
Asian market while exploring additional growth opportunities.

Celanese is continuing
to strive for cost and productivity leadership by using a number of operational
excellence tools, such as Six Sigma

Celanese
is enjoying the benefits of its Focus and Forward
restructuring initiatives that commenced in 2001. These initiatives included the
closure of high-cost facilities and the simplification of administrative
structures, which resulted in the elimination of about 1,500 positions. The
initiatives generated about 100 million of savings in 2002. Going forward,
annual savings are estimated to increase to approximately 140 million.

Celanese
uses best practices to reduce costs and increase equipment reliability in
maintenance, project engineering and energy utilization. Advanced process
control projects help to generate significant savings in energy and raw
materials while increasing yields in production units. Most significantly, Six
Sigma, a structured process based on statistics for achieving greater
productivity and growth, has become a pervasive and important tool for projects
ranging from lowering costs to increasing capacity and from reducing working
capital to minimizing capital expenditures required for expansion. More than 80
employees have been trained as black belts providing leadership on
Six Sigma projects.

Celanese is optimizing
its business portfolio to focus on businesses in which it can expand its market,
cost and technology leadership over the long term.

Celanese
continues to explore strategic options to improve its underperforming Chemical
Intermediates segment. In a move to improve the competitiveness of its oxo
business, Celanese reached agreement with Degussa AG to establish a 50/50 joint
venture of their European propylene-based oxo chemicals businesses. The European
Commission is currently conducting a detailed investigation into the proposed
joint venture. Celanese expects regulatory approval in 2003.

Celanese
also divested its global allylamines and U.S. alkylamines businesses with
production sites in Portsmouth, Virginia and Bucks, Alabama.

In
another transaction, Celanese sold its non-core Trespaphan OPP films business in
2002 for a value of 209 million to a consortium consisting of the
Dor-Moplefan Group and Bain Capital, Inc. After purchase price adjustments,
Celanese received net proceeds of 112 million. See also
Acquisitions and Divestitures and Note 6 to the Consolidated
Financial Statements.

13

---



Celanese
is pursuing a policy of sound financial management

In
2002, Celanese strengthened its financial position. Through strong cash flow
management in each of its business segments and net proceeds from divestitures,
the company reduced net financial debt by 40% from 835 million at year end
2001 to 497 million at year end 2002. The companys strong cash
position also enabled it to finance an acquisition, contribute over 100
million to its U.S. pension funds, and resume share repurchases. This policy of
financial discipline enables Celanese to continue pursuing a growth strategy and
to return value to its shareholders. See Item 5. Operating and Financial
Review and Prospects  Financial Highlights

## Business Segments

Acetyl Products

The
Acetyl Products segment consists of four business lines: Acetyl Chain, Acetyl
Derivatives and Polyols, Polyvinyl Alcohol and Emulsions. All business lines in
this segment conduct business using the Celanese trade name, except
Polyvinyl Alcohol, which uses the trademark Celvol®, and Emulsions and
Emulsion Powders, which use the trademarks Mowilith® and Celvolit®.
The following table lists key acetyl products and their major markets.

|                      |  |                                                                                                                                                            
|--------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|Key Acetyl Products   |  | Major Markets                                                                                                                                              
|                      |  |                                                                                                                                                            
|Methanol              |  | Formaldehyde and Acetic Acid                                                                                                                               
|                      |  |                                                                                                                                                            
|Acetic Acid           |  | Vinyl Acetate Monomer, Acetic Anhydride and Purified Terephthalic Acid or PTA, an intermediate used in the production of polyester resins, films and fibers
|                      |  |                                                                                                                                                            
|Acetic Anhydride      |  | Cellulose Acetate and Pharmaceuticals                                                                                                                      
|                      |  |                                                                                                                                                            
|Vinyl Acetate Monomer |  | Paints, Adhesives, Paper Coatings, Films and Textiles                                                                                                      
|                      |  |                                                                                                                                                            
|Acetate Esters        |  | Coatings, Inks                                                                                                                                             
|                      |  |                                                                                                                                                            
|Polyvinyl Alcohol     |  | Adhesives, Building Products, Paper Coatings, Films and Textiles                                                                                           
|                      |  |                                                                                                                                                            
|Emulsions             |  | Water-Based Quality Surface Coatings, Adhesives, Non-Woven Textiles                                                                                        
|                      |  |                                                                                                                                                            
|Emulsion Powders      |  | Building Products                                                                                                                                          
|                      |  |                                                                                                                                                            

Business
Lines

Acetyl
Chain. The acetyl chain business line produces:

| |  |  | Methanol,
a basic chemical building block used in the production of a variety of  chemical
intermediates, is principally used internally in the production of  formaldehyde and
acetic acid. The balance is sold to the merchant market.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Acetic
acid, used to manufacture vinyl acetate monomer and other acetyl derivatives. Celanese
manufactures acetic acid for its own use, as well as for third parties, including producers
of purified terephthalic acid, or PTA, and to other participants in the acetyl derivatives
business.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Vinyl
acetate monomer, used in a variety of adhesives, paints, films, coatings and textiles.
Celanese manufactures vinyl acetate monomer for its own use, as well as for third
parties.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Acetic
anhydride, a raw material used in the production of cellulose acetate,  detergents and
pharmaceuticals.
| | - |  | --------------------------------------------------------------------------------------------------------------

| |  |  | Acetaldehyde,
a major feedstock for the  production of polyols. Acetaldehyde is also used in other
organic compounds such  as pyridines, which are used in agricultural products.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
is the worlds leading producer of acetic acid and vinyl acetate monomer
according to the Tecnon Orbichems Acetic Acid and Vinyl Acetate 1999-2009
World Survey. According to data from the 2002 Chemical Economics
Handbook, Celanese is the largest producer of methanol in North America.

14

---



Acetic
acid, methanol, and vinyl acetate monomer, like other commodity products, are
characterized by cyclicality in pricing. The principal raw materials in these
products are natural gas and ethylene, which are purchased from numerous
sources; carbon monoxide, which is purchased by Celanese under long-term
contracts; methanol, which is both manufactured and purchased by Celanese under
short-term contracts; and butane, which is purchased from several suppliers. All
these raw materials, except carbon monoxide, are themselves commodities and are
available from a wide variety of sources.

Celaneses
production of acetyl chain products employs leading proprietary and licensed
technologies, including proprietary acid-optimization technology. Management
believes that Celaneses Clear Lake, Texas and Singapore facilities, which
use these technologies, are some of the worlds lowest cost acetic acid
plants. In March 2001, Celanese announced an important development in its
proprietary acid optimization technology, AO Plus, for the production of
acetic acid. AO Plus was first introduced at Celaneses Clear Lake plant,
enabling a 20 percent increase in capacity with minimal investment required. In
July 2001, Celanese announced a significant improvement in its vinyl acetate
monomer technology. The new proprietary technology, VAntage, enables
significant increases in production efficiencies, lower operating costs and
increases in capacity at 10 to 15 percent of the cost of building a new plant.

Acetyl
Derivatives and Polyols. The acetyl derivatives and polyols business line
produces a variety of solvents, polyols, formaldehyde and other products, which
in turn are used primarily in the manufacture of paints, coatings, and
adhesives.

Many
acetyl derivatives products are derived from Celaneses production of
acetic acid and oxo alcohols. Primary products are:

| |  |  | Ethyl
acetate, an  acetate ester that is a solvent used in coatings, inks and adhesives and in
the  manufacture of, among  other things, photographic films and coated papers;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Butyl
acetate, an acetate ester that is a solvent used in inks, pharmaceuticals  and perfume;
| | - |  | ---------------------------------------------------------------------------------------------

| |  |  | Propyl
acetate, an acetate ester that is a solvent used in  inks, lacquers and plastics;
| | - |  | ----------------------------------------------------------------------------------------

| |  |  | Methyl
ethyl ketone, a solvent used in the  production of printing inks and magnetic tapes;
| | - |  | -------------------------------------------------------------------------------------------

| |  |  | Butyric
acid, an  intermediate for the production of esters used in artificial flavors;
| | - |  | ---------------------------------------------------------------------------------------

| |  |  | Propionic
acid, an organic acid used to protect and preserve grain; and
| | - |  | -----------------------------------------------------------------------

| |  |  | Formic
acid, an organic acid used in textile dyeing and leather tanning.
| | - |  | ------------------------------------------------------------------------

Polyols
and formaldehyde products are derivatives of methanol and are made up of the following
products:

| |  |  | Formaldehyde,
primarily used to produce adhesive resins for plywood, particle board, polyacetal
engineering resins and a compound used in making polyurethane;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Polyol
products such as pentaerythritol, used in coatings and synthetic lubricants;
trimethylolpropane, used in synthetic lubricants; neopentyl glycol, used in powder
coatings; and 1,3 butylene glycol, used in flavorings and plasticizers.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Acetyl
derivatives and polyols are commodity products characterized by pricing cycles.
The principal raw materials used in the acetyl derivatives business line are
acetic acid, various alcohols, methanol and acetaldehyde, all of which Celanese
manufactures for its own use as well as for sales to third parties, including
its competitors in the acetyl derivatives business. Celanese purchases all its
acetaldehyde requirements for its North American operations from Petroleos
Mexicanos, the Mexican national oil company. Petroleos Mexicanos has been a
reliable supplier. Acetaldehyde is also available from other sources.

Polyvinyl
Alcohol. Polyvinyl alcohol is a performance chemical engineered to satisfy
particular customer requirements. It is used in adhesives, building products,
paper coatings, films and textiles. The primary raw material to produce
polyvinyl alcohol is vinyl acetate monomer, while acetic acid is produced as a
by-product. Prices vary depending on industry segment and end use application.
Products are sold on a global basis, and competition is from all regions of the
world. Therefore, regional economies and supply and demand balances affect the
level of competition in other regions. According to Chemical Marketing
Reporters last article on PVOH in early 2001, Celanese is the largest
North American producer of polyvinyl alcohol and the second largest producer in
the world. Celanese purchased the polyvinyl alcohol business line from Air
Products and Chemicals, Inc. (Air Products) in September 2000.

15

---



Emulsions.
Celanese purchased the European emulsions and global emulsion powders business
of Clariant AG on December 31, 2002. The products in this business are sold
under the Mowilith® and Celvolit® brands and include conventional
emulsions, high-pressure vinyl acetate ethylene emulsions, and powders.
Emulsions and emulsion powders are made from vinyl acetate monomer, acrylate
esters and styrene. Emulsions are a key component of water-based quality surface
coatings, adhesives, non-woven textiles and other applications. According to
Kline & Co., a chemicals industry consultant, in 2001 the business held a
number two position in emulsions (excluding SBRs) in Europe and a number one
position in European VAM-based emulsions. The business is also a leading
supplier of emulsion powders globally.

Facilities

The
Acetyl Products segment has production sites in the United States, Canada,
Mexico, Singapore, Spain and Germany. The emulsions and emulsion powders
businesses have production sites in Germany, Spain, Sweden and Slovenia, as well
as tolling arrangements in the United Kingdom, France and Greece. Celanese also
participates in a joint venture in Saudi Arabia which produces methanol and
MTBE. Over the last few years, Celanese has continued to shift its production
capacity to lower cost production facilities while expanding in growth markets.
An example of this is Celaneses shut down of its vinyl acetate monomer,
acetic acid and pentaerythritol production units in Edmonton, Alberta, Canada.
The pentaerythritol unit was shut down at the end of 2001, while the vinyl
acetate monomer and acetic acid units were shut down in early 2002. Customers
who purchased acetic acid or vinyl acetate monomer from the Edmonton facility
are supplied from the Clear Lake, Texas plant. Customers who purchased
pentaerythritol from the Edmonton facility are supplied from the Bishop, Texas
plant.

Capital
Expenditures

The
Acetyl Products segments capital expenditures for property, plant and
equipment were 40 million, 43 million, and 80 million for the
years 2002, 2001 and 2000, respectively. The capital expenditures incurred
during the last two years related to efficiency and safety improvement-related
items associated with the normal operations of the business, while the capital
expenditures incurred during 2000 also related to the construction of the acetic
acid and acetate esters plants at Celaneses Singapore site.

Markets

The
following table illustrates net sales by destination of the Acetyl Products
segment by geographic region for the years ended December 31, 2002, 2001 and
2000.

# Net Sales by Destination  Acetyl Products

|               | Year Ended December 31,
|-------------- | -----------------------
|
|
|
|North America  |                        
|Europe/Africa  |                        
|Asia/Australia |                        
|Rest of World  |                        

The
Acetyl Products segment markets its products both directly to customers and
through distributors. It also utilizes a number of e-channels,
including its website at www.chemvip.com, as well as system to system linking
through its industry portal, Elemica.

In
the acetyl chain business line, the methanol market is regional and highly
dependent on the demand for products made from methanol. In addition to its own
demands for methanol, Celaneses production is sold to a few regional
customers who are manufacturers of chemical intermediates and to a lesser
extent, by manufacturers in the wood products industry. Celanese typically
enters into short-term contracts for the sale of methanol. Acetic acid and vinyl
acetate monomer are global businesses which have several large customers.
Generally, Celanese supplies these global customers under multi-year contracts.
The customers of acetic acid and vinyl acetate monomer produce polymers used in
water-based paints, adhesives, paper coatings, film modifiers and textiles.
Celanese has long-standing relationships with most of these customers.

16

---



Acetyl
derivatives and polyols are sold to a diverse group of regional and
multinational customers both under multi-year contracts and on the basis of
long-standing relationships. The customers of acetyl derivatives are primarily
engaged in the production of paints, coatings and adhesives. In addition to its
own demand for acetyl derivatives to produce cellulose acetate, Celanese sells
acetyl derivatives to other participants in the cellulose acetate industry.
Celanese manufactures formaldehyde for its own use as well as for sale to a few
regional customers that include manufacturers in the wood products industry. The
sale of formaldehyde, primarily to customers in the chemical derivatives
industry, is largely based on long-term agreements.

Polyols
are sold globally to a wide variety of customers, primarily in the coatings and
resins and the specialty products industries.

Polyvinyl
alcohol is sold to a diverse group of regional and multinational customers
mainly under single year contracts. The customers of the polyvinyl alcohol
business line are primarily engaged in the production of adhesives, paper,
films, building products, and textiles.

Emulsions
and emulsion powders are sold to a diverse group of regional and multinational
customers. Customers for emulsions are manufacturers of water-based quality
surface coatings, adhesives, and non-woven textiles. Customers for emulsion
powders are primarily manufacturers of building products.

Competition

Principal
competitors of Celanese in the Acetyl Products segment include Acetex Corporation, Borden
Chemical, Inc., BP p.l.c. (BP), Chang Chun Petrochemical Co., Ltd., Daicel,
The Dow Chemical Company (Dow), Eastman Chemical Corporation
(Eastman), E. I. Du Pont de Nemours and Company (DuPont), Methanex
Corporation (Methanex), Millennium Chemicals Inc. (Millennium),
Nippon Goshei, Perstorp Inc., Showa Denko K.K., and Kuraray Co. Ltd.

Chemical Intermediates

The
Chemical Intermediates segment consists of three business lines: acrylates, oxo
products and specialties. Each business line in this segment conducts business
using the Celanese trade name. The following table lists key
Chemical Intermediates products and their major markets.

|                                    |  |                                                   
|----------------------------------- |  | --------------------------------------------------
|Key Chemical Intermediates Products |  | Major Markets                                     
|                                    |  |                                                   
|Acrylic Acid and Acrylate Esters    |  | Coatings and Adhesives                            
|                                    |  |                                                   
|Amines                              |  | Agricultural Products and Water Treatments        
|                                    |  |                                                   
|Carboxylic Acids                    |  | Lubricants, Detergents and Specialties            
|                                    |  |                                                   
|Oxo Alcohols                        |  | Plasticizers, Acrylates, Esters, Solvents and Inks
|                                    |  |                                                   

Business Lines

Acrylates.
The acrylates business line produces and supplies acrylic acid and the following acrylate
esters: methyl acrylate,  ethyl acrylate, butyl acrylate and 2-ethylhexyl acrylate.

The
primary end uses of acrylic acid and acrylate esters are in the manufacture of:

| |  |  | Paints
and coatings;
| | - |  | --------------------

| |  |  | Adhesives;
and
| | - |  | --------------

| |  |  | Water
treatment applications, such as flocculating agents.
| | - |  | ----------------------------------------------------------

Prices for
acrylate products are subject to the cyclical trends in the basic chemicals
industry.

The
primary raw materials for these products are propylene, which Celanese purchases
from a variety of sources, and oxo alcohols, which Celanese produces itself.

17

---



Oxo.
The oxo business line produces organic solvents and intermediates such as:

| |  |  | Butanol,
used as a solvent for lacquers, dopes and thinners, and as an  intermediate in the
manufacture of chemicals, such as butyl acrylate;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Propanol,
used as an intermediate in the production of amines for agricultural  chemicals, and as a
solvent for inks, resins, insecticides and waxes;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Butyraldehyde,
used in the production of polyols, alcohols, safety glass and  fabric coatings, and as an
intermediate for 2-ethylhexanol and butanol;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Propionaldehyde,
used in the manufacture of propanol, the synthesis of fertilizers, and in flavor and
fragrance chemicals;  and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------

| |  |  | 2-ethylhexanol,
used as an intermediate for plasticizers and fuel additives, and  in the production of
2-ethylhexyl acrylate, which in turn is used to manufacture  water based resins for
paint, textiles and paper coatings.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Generally,
demand for oxo products depends on developments in the construction and
automotive industries. Uses for this business lines products are mainly in
the manufacture of lacquers and paints, as well as in plasticizers, which can be
found in floorings, polyvinyl chloride or PVC flex cables, synthetic leather and
covers for car chassis. They are also used in smaller scale automotive
applications, such as safety glass, synthetic motor oils or as octane enhancers.
A substantial portion of the oxo business lines products is consumed by
other Celanese business lines.

Prices
for oxo products, like other basic chemical commodity prices, follow cyclical
trends.

The
primary raw materials for these products are propylene and ethylene, both of
which are purchased from a variety of sources, and synthesis gas, which is
manufactured from crude oil or natural gas.

In
December 2002, Celanese and Degussa AG completed negotiations to set up a 50-50
joint venture for oxo products. Under the terms of the joint venture, Celanese
will merge its commercial, technical and operational C3-oxo business activities
in Oberhausen, Germany with those of Degussas Oxeno subsidiary. The
European Commission is currently conducting a detailed investigation into the
proposed joint venture. Celanese expects regulatory approval in 2003.

Specialties.
The specialties business line produces:

| |  |  | Carboxylic
acids such as pelargonic acid, used in detergents and synthetic  lubricants, and
heptanoic acid, used in plasticizers and synthetic lubricants;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Amines
such as methyl amines, used in agrochemicals, monoisopropynol amines,  used in
herbicides, and butyl amines, used in the treatment of rubber and in  water treatment; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Oxo
derivatives and special solvents, such as crotonaldehyde, which is used by  the
Performance Products segment for the production of sorbates, as well as raw  materials
for the fragrance and food ingredients industry.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
prices for these products are relatively stable due to long-term contracts with
customers whose industries are not generally subject to the cyclical trends of
commodity chemicals.

The
primary raw materials for these products are olefins and ammonia, which are
purchased from world market suppliers based on international prices.

In
March 2002, Celanese formed EsteCH, a joint venture with Hatco Corporation, a
leading producer of synthetic lubricants, for the production and marketing of
neopolyol esters or NPEs. This newly created joint venture, in which Celanese
holds a 51 percent interest, is building and will operate a 7,000 metric ton per
year NPE plant at Celaneses Oberhausen, Germany site. The plant is
expected to come on stream in the fourth quarter of 2003. Neopolyol esters are
used as base stocks for synthetic lubricants in refrigeration, automotive,
aviation and industrial applications, as well as in hydraulic fluids. Celanese
will supply EsteCH with carboxylic acids and polyols, the main raw materials for
producing NPEs.

18

---



In
December 2002 Celanese sold its global allylamines and U.S. alkylamines businesses,
including its production sites located in Bucks, Alabama and Portsmouth, Virginia, to U.S.
Amines Ltd. See Acquisitions and Divestitures and Note 6 to the Consolidated
Financial Statements.

Facilities

The
Chemical Intermediates segment has production sites in the United States,
Germany and Mexico.

Capital
Expenditures

The
Chemical Intermediates segments capital expenditures for property, plant
and equipment were 70 million, 30 million, and 39 million for
the years 2002, 2001 and 2000, respectively. Capital expenditures in all three
years related to efficiency and safety improvement-related items associated with
the normal operations of the business. The capital expenditures incurred in 2001
and 2002 included spending for a new plant for synthesis gas, an important raw
material for the production of oxo and specialties, at Celaneses
Oberhausen site. The new plant is scheduled to come on stream in the second half
of 2003 and is expected to improve reliability and reduce production costs.

Markets

The
following table illustrates the destination of the net sales of the Chemical
Intermediates segment by geographic region for the years ended December 31,
2002, 2001 and 2000.

# Net Sales by Destination  Chemical Intermediates

|               | Year Ended December 31,
|-------------- | -----------------------
|
|
|
|North America  |                        
|Europe/Africa  |                        
|Asia/Australia |                        
|Rest of World  |                        

The
Chemical Intermediates segment markets its products both directly to customers
and through distributors. It also utilizes a number of e-channels,
including its website at www.chemvip.com, as well as system to system linking
through its industry portal, Elemica.

Celaneses
acrylates business line serves customers throughout the world in various
applications, including paints and coatings, adhesives and water treatment.
Celaneses oxo business line has a broad customer base, and Celanese has
long-standing relationships with most of these customers. Both the acrylates and
the oxo markets are characterized by oversupply and numerous competitors.

The
specialties business line primarily serves global markets in the synthetic
lubricant, agrochemical, rubber processing and other specialty chemical areas.
Much of the specialties business line involves one customer, one
product relationships, where the business develops customized products
with the customer, but the specialties business line also sells several
chemicals which are priced more like commodity chemicals.

Competition

The
Chemical Intermediates segment competes with, among others, Air Products, Atofina S.A.,
BASF AG (BASF), Dow, Eastman, Nippon Shokubai Co., Ltd, and Rohm & Haas
Company.

19

---



Acetate
Products

The
Acetate Products segment consists of two major business lines, acetate filter
products and acetate filament. Both these business lines use the
Celanese brand to market their products. The following table lists
key products of the Acetate Products segment and their major markets.

|                     |  |                                              
|-------------------- |  | ---------------------------------------------
|Key Acetate Products |  | Major Markets                                
|                     |  |                                              
|Acetate Tow          |  | Cigarette Filters                            
|                     |  |                                              
|Acetate Filament     |  | Fashion Apparel, Linings and Home Furnishings
|                     |  |                                              

Business
Lines

Products
from the two major business lines are found in cigarette filters, fashion
apparel, linings and home furnishings. According to the 2002 Stanford Research
Institute International Chemical Economics Handbook, Celanese is the
worlds leading producer of acetate fibers, including production of its
joint ventures in Asia.

Celanese
produces acetate flake by processing wood pulp with acetic anhydride. Celanese
purchases wood pulp that is made from reforested trees from major suppliers and
produces acetic anhydride internally. The acetate flake is then further
processed into acetate fiber in the form of a tow band or filament.

The
acetate filter products business line produces acetate tow, which is used
primarily in cigarette filters. Currently, the acetate tow market is
characterized by stability and slow growth.

Celanese
has a 30 percent interest in three manufacturing joint ventures with Chinese
state-owned enterprises that produce cellulose acetate flake and tow in China.
Additionally, in 2002, 20 percent of Celaneses sales of acetate tow were
sold to the state-owned tobacco enterprises, the largest single market for tow
in the world. As demand for acetate tow in China exceeds local supply, Celanese
and its Chinese partners are evaluating expansion at their three manufacturing
joint ventures. Although increases in manufacturing capacity of the joint
ventures would likely reduce the volume of Celaneses future direct sales
of cellulose acetate tow to China, the dividends paid by the joint ventures to
Celanese would likely increase once the expansions are complete. A final
decision on expansion is expected by mid-2003.

The
acetate filament business line is a supplier to the textile industry. Demand for
acetate filament is dependent on fashion trends and the world economy. Fashion
changes, such as the trend to casual office wear, have negatively affected
demand for lining and shell material and this trend is expected to continue. In
addition, market conditions in North America and Asia have significantly
affected the global textile business and negatively affected consumption of all
fibers, including acetate. Product substitution from acetate filament to
polyester fibers and other filaments has also occurred. Celanese is working more
closely with downstream apparel manufacturers and major retailers to increase
awareness of acetates suitability for high-end fashion apparel due to its
breathable and luxurious qualities.

The
Acetate Products segment is continuing its cost reduction and operations
improvement efforts. These efforts are directed toward reducing costs while
achieving higher productivity of employees and equipment. Celanese is taking
major steps to restructure its acetate products businesses as part of its
strategy to maximize its global manufacturing efficiency. In 2001, these steps
included the following actions, some of which continued into 2002:

| |  |  | The
Rock Hill, South Carolina acetate filament production was shut down at the  end of the
fourth quarter 2001. The Rock Hill site continues to produce acetate  flake. The Narrows,
Virginia and Ocatlán, Mexico facilities continue to  produce acetate filament.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Lanaken,
Belgium acetate filament production was shut down in the second quarter  of 2002. The
Lanaken site continues to produce acetate tow.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
2002 manufacturing costs at the Ocotlán, Mexico facility were reduced  through
downsizing and renegotiation of the collective bargaining agreements  with employees in
the fourth quarter of 2001.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

20

---



Facilities

The
Acetate Products segment has production sites in the United States, Canada,
Mexico and Belgium, and participates in three manufacturing joint ventures in
China.

Capital
Expenditures

The
Acetate Products segments capital expenditures for property, plant and
equipment were 31 million, 35 million, and 30 million for the
years 2002, 2001 and 2000, respectively. The capital expenditures incurred
during these years related to efficiency, environmental and safety
improvement-related items associated with the normal operations of the business.

Markets

The
following table illustrates the destination of the net sales of the Acetate
Products segment by geographic region for the years ending December 31, 2002,
2001 and 2000.

# Net Sales by Destination  Acetate Products

|               | Year Ended December 31,
|-------------- | -----------------------
|
|
|
|North America  |                        
|Europe/Africa  |                        
|Asia/Australia |                        
|Rest of World  |                        

Sales
in the acetate filter products industry are principally to the major tobacco
companies that account for a majority of worldwide cigarette production.
Celaneses contracts with most of its customers, including its largest
customer, with whom it has a long-standing relationship, are entered into on an
annual basis. In recent years, the cigarette industry has experienced
consolidation. In the acetate filter products industry, changes in the cigarette
manufacturer customer base and shifts among suppliers to those customers have
had significant effects on acetate tow prices in the industry as a whole.

In
the acetate filament industry, Celaneses sales are made to textile
companies that range in size from the largest in the industry to others which
are quite small. The textile companies either weave or knit the acetate filament
yarns to produce greige fabrics. The greige fabrics are then dyed and finished,
either by the greige fabrics manufacturer or by converters who buy the fabrics
and contract with dyeing and finishing companies to process the fabrics. The
finished fabrics are sold to manufacturers who cut and sew the fabrics into
apparel for retail stores.

The
textile industry, in particular the apparel portion of the industry, continues
to undergo structural changes as production moves from high-wage to low-wage
countries. In recent years, this has resulted in a changing customer base for
all participants in the textile chain from the yarn manufacturer to the garment
manufacturer. Market conditions in North America and Asia have reduced
profitability in the global textile industry. Many North American manufacturers
in the textile chain have reduced capacity, vertically integrated with other
manufacturers or exited from the business. Although demand in the Asian market
continues to rise, intense competition has eroded pricing and reduced
profitability. Product substitution to polyester and other fibers has also
occurred. Celaneses acetate filament business has been adversely affected
by these trends in the industry.

Celanese
is participating in the expanding Asian filament market through its marketing
alliance with Teijin Limited. Teijin agreed to assist Celanese with qualifying
its acetate filament with customers beginning in January 2002, by, among other
things, providing Celanese with marketing and technical support. Teijin
discontinued acetate filament production in March 2002.

21

---



Competition

Principal
competitors in the Acetate Products segment include Acordis Industrial Nederland bv;
Daicel; Eastman; Mitsubishi Rayon Company, Limited; Novaceta S.p.a.; and Rhodia S.A.
(Rhodia).

Technical
Polymers Ticona

Ticona
develops, produces and supplies a broad portfolio of high performance technical
polymers. The following table lists key Ticona products, their trademarks, and
their major markets.

|                                                                 |  |                                                                      
|---------------------------------------------------------------- |  | ---------------------------------------------------------------------
|Key Ticona Products                                              |  | Major Markets                                                        
|                                                                 |  |                                                                      
|Hostaform®/Celcon® (Polyacetals)                                 |  | Automotive, Electronics and Consumer Products                        
|                                                                 |  |                                                                      
|GUR® (Ultra High Molecular Weight Polyethylene or PE-UHMW)       |  | Profiles, Battery Separators and Industrial Specialties              
|                                                                 |  |                                                                      
|Celanex®/Vandar®/Riteflex®/Impet® (Polyester Engineering Resins) |  | Electrical, Electronics, Automotive, Appliances and Consumer Products
|                                                                 |  |                                                                      
|Vectra® (Liquid Crystal Polymers)                                |  | Electronics, Telecommunications and Automotive                       
|                                                                 |  |                                                                      
|Fortron®* (Polyphenylene Sulfide or PPS)                         |  | Electronics, Automotive and Industrial                               
|                                                                 |  |                                                                      
|Celstran®, Compel® (long fiber reinforced thermoplastics)        |  | Automotive and Industrial                                            
|                                                                 |  |                                                                      

* Fortron is a registered
trademark of Fortron Industries.

Ticonas
technical polymers have chemical and physical properties enabling them, among
other things, to withstand high temperatures, resist chemical reactions with
solvents and resist fracturing or stretching. These products are used in a wide
range of performance-demanding applications in the automotive and electronics
sectors and in other consumer and industrial goods, often replacing metal or
glass.

Ticona
is an innovation-oriented business. Ticona focuses its efforts on developing new
markets and applications for its product lines, often developing custom
formulations to satisfy the technical and processing requirements of a
customers applications. For example, Ticona worked very closely with its
customers to adopt a Fortron® (PPS)-glass fabric composite for the inboard
leading-edge nose on the wings of the Airbus A340-500 and -600 series. Ticona is
also developing new products such as Topas®, a metallocene catalyst based
cycloolefin copolymer, or COC. Topas is developing markets and applications
where transparency, high temperature resistance and water vapor barrier
properties are key requirements.

Ticonas
customer base consists primarily of a large number of plastic molders and
component suppliers, which are often the primary suppliers to original equipment
manufacturers, or OEMs. Ticona works with these molders and component suppliers
as well as directly with the OEMs to develop and improve specialized
applications and systems.

Prices
for most of these products, particularly specialized product grades for targeted
applications, generally reflect the value added in complex polymer chemistry,
precision formulation and compounding, and the extensive application development
services provided. The specialized product lines are not particularly
susceptible to cyclical swings in pricing. Polyacetals pricing, mainly in
standard grades, is, however, somewhat more price competitive, with many
minimum-service providers competing for volume sales.

Product
Lines

Following
is a description of Ticonas principal product lines.

Polyacetals
are sold under the trademarks, Celcon® in North America and Hostaform®
in Europe and the rest of the world. Polyplastics and Korea Engineering
Plastics, in which Ticona holds 45 and 50 percent ownership interests,
respectively, are leading suppliers of polyacetals and other engineering resins
in the Asia/Pacific region. Polyacetals are used for mechanical parts, including
door locks and seat belt mechanisms, in automotive applications and in
electrical, consumer and industrial applications such as keyboards, ski
bindings, and gears for appliances.

22

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The
primary raw material for polyacetals is formaldehyde, which is manufactured from
methanol. Ticona currently purchases formaldehyde and methanol in the United
States from Celaneses Acetyl Products segment and, in Europe, manufactures
formaldehyde from purchased methanol.

GUR®,
an ultra high molecular weight polyethylene or PE-UHMW, is an engineered
material used in heavy-duty automotive and industrial applications such as car
battery separator panels and industrial conveyor belts, as well as in specialty
medical and consumer applications, such as porous tips for marker pens, sports
equipment and prostheses. The basic raw material for GUR is ethylene.

Polyesters
such as Celanex® polybutylene terephthalate, or PBT, and Vandar®, a
series of PBT-polyester blends, are used in a wide variety of automotive,
electrical and consumer applications, including ignition system parts, radiator
grilles, electrical switches, appliance housings, boat fittings and perfume
bottle caps. Impet-Hi polyethylene terephthalate, or PET, is a polyester
which exhibits rigidity and strength useful in large injection molded part
applications, as well as high temperature resistance in automotive or
electrical/electronic applications. Riteflex® is a co-polyester which adds
flexibility to the range of high performance properties offered by Ticonas
other products.

Liquid
crystal polymers, or LCPs, such as Vectra®, are used in electrical and
electronics applications and for precision parts with thin walls and complex
shapes. Fortron®, a polyphenylene sulphide, or PPS, product, is used in a
wide variety of automotive and other applications, especially those requiring
heat and/or chemical resistance, including fuel system parts, radiator pipes and
halogen lamp housings, and often replaces metal in these demanding applications.
Fortron is manufactured by Fortron Industries, Ticonas 50-50 joint venture
with Kureha Chemicals Industry of Japan. Celstran® and Compel® are
long fiber reinforced thermoplastics, which impart extra strength and stiffness,
making them more suitable for larger parts than conventional thermoplastics.
Celanese Nylon 6/6®, a polyamide, is resistant to lubricants and fuels,
making it widely used in automotive applications.

Raw
materials for these products vary. Base monomers for polyesters, such as
dimethyl terephthalate or DMT and PTA, are widely available with pricing
dependent on the broader polyester fiber and packaging resins market conditions.
Smaller volume specialty co-monomers for these products are typically supplied
by a few companies. Celanese has entered into a contract for the supply of nylon
base polymers to produce Celanese nylon 6/6 compounds.

Facilities

Ticona
has polymerization, compounding and research and technology centers in Germany
and the United States, as well as additional compounding facilities in Brazil.

Capital Expenditures

Ticonas
capital expenditures for property, plant and equipment were 66 million,
97 million, and 58 million for the years 2002, 2001 and 2000,
respectively. Ticona had expenditures in each of these three years relating to
efficiency and safety improvement-related items associated with the normal
operations of the business. In addition, Ticona had expenditures in each of
these three years for significant capacity expansions at its Bishop, Texas and
Shelby, North Carolina sites. Ticona doubled its U.S. capacity for GUR
PE-UHMW by building a new 30,000 metric tons per year facility in Bishop, Texas,
replacing the existing plant in Bayport, Texas. The new plant came on stream in
the third quarter of 2002. Ticona also significantly increased the capacity of
its Vectra® LCP plant in Shelby, North Carolina in the second quarter of
2002. In the fourth quarter of 2002, Ticona commenced a 23,000 metric ton
expansion of its polyacetals facility in Kelsterbach, Germany. The expanded
capacity in Kelsterbach is scheduled to come on stream in the second half of
2003.

23

---



Markets

The
following table illustrates the destination of the net sales of the Technical
Polymers Ticona segment by geographic region for the years ending December 31,
2002, 2001 and 2000.

# Net Sales by
Destination  Technical Polymer Ticona Segment

|               | Year Ended December 31,
|-------------- | -----------------------
|
|
|
|North America  |                        
|Europe/Africa  |                        
|Asia/Australia |                        
|Rest of World  |                        

Ticonas
consolidated net sales do not include the sales of Polyplastics, Korea
Engineering Plastics or Fortron Industries, which are accounted for under the
equity method. If Ticonas portion of the sales made by these businesses
were included in the chart above, the percentage of sales sold in Asia/Australia
would be substantially higher. A number of Ticonas polyacetals customers,
particularly in the appliance, electrical components, toys and certain sections
of the electronics/telecommunications fields, have moved tooling and molding
operations to Asia, particularly Southern China. To meet the expected increased
demand in this region, Ticona, along with Polyplastics, Mitsubishi Gas Chemical
Company Inc., and Korea Engineering Plastics agreed on a joint venture to
construct and operate a world-scale 60,000 metric ton polyacetals facility in
China. When completed, Ticona will indirectly own an approximate 38 percent
interest in this joint venture. Work on the new facility is scheduled to begin
in mid-to-late 2003 and the new plant is expected to start operations in the
second quarter of 2005.

Ticonas
principal customers are suppliers to the automotive industries as well as
industrial suppliers. These customers primarily produce engineered products, and
Ticona works closely with its customers to assist them to develop and improve
specialized applications and systems. Ticona has long-standing relationships
with most of its major customers, but it also uses distributors, as well as a
number of electronic channels, such as its BuyTiconaDirect on-line
ordering system, and other electronic marketplaces to reach a larger customer
base. For most of Ticonas product lines, contracts with customers
typically have a term of one to two years. If there is a significant swing in
the economic conditions of the end markets of Ticonas principal customers,
it can significantly affect the demand for Ticonas products.

Competition

Ticonas
principal competitors include BASF, Bayer AG, DuPont, General Electric Company and Solvay
S.A. Smaller regional competitors include Asahi/America, Inc., DSM NV, Mitsubishi
Plastics, Inc., Chevron Phillips Chemical Company, L.P., Polialden Petroquimica S.A.,
Teijin and Toray Industries Inc.

Performance Products

The
Performance Products segment consists of the food ingredients business conducted
by Nutrinova.

This
business uses its own trade names to conduct business. The following table lists
key products of the Performance Products segment and their major markets.

|                         |  |                                                                                        
|------------------------ |  | ---------------------------------------------------------------------------------------
|Key Performance Products |  | Major Markets                                                                          
|                         |  |                                                                                        
|Sunett® (Acesulfame-K)   |  | Beverages, Confections, Dairy Products and Pharmaceuticals                             
|                         |  |                                                                                        
|Sorbates                 |  | Dairy Products, Baked Goods, Beverages, Animal Feeds, Spreads and Delicatessen Products
|                         |  |                                                                                        

24

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Business Lines

Nutrinovas
food ingredients business consists of the production and sale of high intensity
sweeteners and food protection ingredients, such as sorbic acids and sorbates,
as well as the resale of dietary fiber products worldwide and the resale of
other food ingredients in Japan and Australia. In addition, in July 2002 the
Protos-Biotech business of Celanese Ventures, including its DHActive
omega-3 fatty acid, docosahexanoeic acid (DHA), and other high-quality
molecules, was transferred to Nutrinova.

Acesulfame-K,
a high intensity sweetener marketed under the trademark Sunett®, is used in a
variety of beverages, confections and dairy products throughout the world. The
primary raw materials for this product are diketene and sulfur trioxide. Sunett
pricing for targeted applications reflects the value added in the precision
formulations and extensive technical services provided. Nutrinovas
strategy is to be the most reliable and highest quality producer of this
product, and to develop new applications and expand into new markets. Nutrinova
maintains a strict patent enforcement strategy, which has resulted in favorable
outcomes in a number of patent infringement matters in Europe and the United
States. Nutrinovas European and U.S. patents for making Sunett expire in
2005.

Nutrinovas
food protection ingredients are used in foods, beverages and personal care
products. The primary raw materials for these products are ketene and
crotonaldehyde. Sorbates pricing is extremely sensitive to demand and industry
capacity and is not necessarily dependent on the prices of raw materials.

Facilities

Nutrinova
has production facilities in Germany, as well as sales and distribution
facilities in all major world markets.

Capital Expenditures

The
Performance Products segments capital expenditures for property, plant and
equipment were 4 million, 2 million, and 2 million for the
years 2002, 2001 and 2000, respectively. The capital expenditures incurred
during these years related to efficiency and safety improvement items associated
with the normal operation of the business.

Markets

The
following table illustrates the destination of the net sales of the Performance
Products segment by geographic region for the years ending December 31, 2002,
2001 and 2000.

# Net Sales by Destination  Performance Products

|               | Year Ended December 31,
|-------------- | -----------------------
|
|
|
|North America  |                        
|Europe/Africa  |                        
|Asia/Australia |                        
|Rest of World  |                        

Nutrinova
directly markets Sunett primarily to a limited number of large
multinational and regional customers in the beverage and food industry under
long-term and annual contracts. Nutrinova markets food protection ingredients
primarily through regional distributors to small and medium sized customers and
directly through regional sales offices to large multinational customers in the
food industry. Nutrinova is currently developing markets and new applications
for DHActive. Potential application areas include functional foods and
beverages, dietary supplements, clinical nutrition and pharmaceutical end-uses.

Competition

The
principal competitors for Nutrinovas Sunett sweetener are Holland Sweetener Company,
The Nutrasweet Company, Ajinomoto Co., Inc. and several Chinese manufacturers. In
sorbates, Nutrinova competes with Nantong AA, Daicel, Chisso Corporation, Yu Yao/Ningbo,
Yancheng AmeriPac and other Japanese and Chinese manufacturers of sorbates.

25

---



## Other Activities

Other
Activities includes revenues mainly from the captive insurance companies,
Celanese Ventures GmbH, Celanese Advanced Materials, Inc., as well as corporate
activities, several service companies and other ancillary businesses, which do
not have significant sales.

Celaneses
two wholly-owned captive insurance companies are a key component of
Celaneses global risk management program, as well as a form of self
insurance for the property, liability and workers compensation risks of
Celanese. The captive insurance companies issue insurance policies to Celanese
subsidiaries to provide consistent coverage amid fluctuating costs in the
insurance market and to lower long-term insurance costs by avoiding or reducing
commercial carrier overhead and regulatory fees. The captive insurance companies
issue insurance policies and coordinate claims handling services with third
party service providers. They retain risk at levels approved by the board of
management and obtain reinsurance coverage from third parties to limit the net
risk retained. One of the captive insurance companies also insures certain third
party risks.

Celanese
Ventures promotes research projects that lie outside of Celaneses
principal businesses or, due to their long-term perspective and widely-spread
application possibilities, cannot be operated by the principal businesses alone.
Celanese Ventures is presently active in developing high temperature membrane
electrode assemblies or MEAs for fuel cells, and it inaugurated the worlds
first pilot plant for MEAs at the Celaneses Frankfurt site in the third
quarter of 2002. Celanese Ventures is also developing new catalysts for high
performance polymers. Celanese Advanced Materials consists of the high
performance polymer PBI and the Vectran® polymer fiber product lines, which
were transferred from the Acetate Products segment to Other Activities as of
July 1, 2000 to reflect the strategic alignment of PBI with Celanese
Ventures fuel cell project. See Note 27 to the Consolidated Financial
Statements.

## Acquisitions and Divestitures

Celanese completed the
following acquisitions of businesses during 2002:

| |  |  | As
a part of its strategy of forward integration, Celanese purchased the European emulsions
and global emulsion powders business of Clariant AG on December 31, 2002 valued at
147 million. After purchase price adjustments and assumption of liabilities,
Celanese paid 125 million cash for the net assets of this business.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese completed the
following acquisitions of businesses during 2000:

| |  |  | In
May 2000, Celanese acquired 100 percent of Axiva GmbH, a process technology and
engineering business, from Aventis for a purchase price of 38 million. In October
2000, Celanese sold 75 percent of the process technology and engineering business of Axiva
GmbH to Siemens AG and retained selected projects, which it continues to operate in the
process technology entity, which was renamed Celanese Ventures GmbH. Celanese received
gross proceeds of 10 million on the sale.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
September 2000, Celanese completed the acquisition of the polyvinyl alcohol
("PVOH") business of Air Products and  Chemicals, Inc. for U.S. $326 million (359
million).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
made the following divestitures during 2002:

| |  |  | Effective
January 1, 2002, Celanese sold its interest in InfraServ GmbH & Co. Deponie Knapsack
KG (Deponie) to Trienekens AG.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
December 2002, Celanese sold Trespaphan, its global oriented polypropylene film business,
to a consortium consisting of the Dor-Moplefan Group and Bain Capital, Inc. This business
is reflected as a component of discontinued operations in the Consolidated Financial
Statements in accordance with SFAS No. 144.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | During
2002, Celanese sold its global allylamines and U.S. alkylamines businesses to U.S. Amines
Ltd. This business is reflected as a component of discontinued operations in the
Consolidated Financial Statements in accordance with SFAS No. 144.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
completed the following divestitures during 2001:

| |  |  | In
January 2001, Celanese sold its investment in InfraServ GmbH & Co.
Münchsmünster KG to Ruhr Oel GmbH. See Note 10 to the Consolidated Financial
Statements
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

26

---



| |  |  | In
January 2001, Celanese sold its CelActiv and Hoecat® catalyst  business to
Synetix.
| | - |  | ---------------------------------------------------------------------------------------

| |  |  | In
April 2001, Celanese sold NADIR filtration GmbH, formerly Celgard GmbH, to  KCS Industrie
Holding AG. This divestiture was classified as a discontinued  operation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
June 2001, Celanese sold its ownership interest in Hoechst Service  Gastronomie GmbH to
Eurest Deutschland GmbH and InfraServ GmbH & Co.  Höchst KG.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
October 2001, Celanese sold its ownership interest in Covion Organic  Semiconducters
GmbH, a developer and producer of light-emitting organic  polymers, to Avecia, its joint
venture partner in Covion Organic Semiconductors  GmbH.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
completed the following divestitures during 2000:

| |  |  | In
January 2000, Celanese sold its phosphorous and phosphorous derivatives  business,
conducted by the Thermphos Group, to the Thermphos Groups  management.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
July 2000, Celanese sold its 50 percent interest in Vinnolit Kunststoff GmbH,  its joint
venture with Wacker Chemie GmbH, and its 100 percent interest in  Vintron GmbH, both
European producers of high performance polyvinyl chloride or  PVC products, to
institutional funds managed by Advent International  Corporation. Pursuant to the sale
agreement, the buyer had been granted limited  rescission rights which expired on
December 15, 2001.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For
further information on the acquisitions and divestitures discussed above, see
Business Segments  Acetyl Products, Item 5. Operating
and Financial Reviews and Prospects  Summary of Consolidated Results
 2002 Compared with 2001  Discontinued Operations for the Years
Ended December 31, 2002, 2001 and 2000 and Note 6 to the Consolidated
Financial Statements.

## Raw Materials and Energy

Celanese
purchases a variety of raw materials from sources in many countries for use in
its production processes. Celanese has a policy of maintaining, when available,
multiple sources of supply for materials. However, some of Celaneses
individual plants may have single sources of supply for some of their raw
materials, such as carbon monoxide, acetaldehyde and wood pulp. During the
second half of 2000 and the first quarter of 2001, Celanese experienced problems
with a supplier who was unable to deliver a reliable and consistent supply of
carbon monoxide at Celaneses Singapore facility. This problem was resolved
during the first quarter of 2001. In the third quarter of 2002, the same
supplier had other operational difficulties, which were addressed during the
fourth quarter. Otherwise, Celanese has not experienced difficulty in obtaining
sufficient supplies of raw materials in recent years. However, there can be no
assurance that Celaneses ability to obtain sufficient raw materials will
not be adversely affected by unforeseen developments. Even if Celanese has
multiple sources of supply for a raw material, there can be no assurance that
these sources can make up for the loss of a major supplier. Nor can there be any
guarantee that profitability will not be affected should Celanese be required to
qualify additional sources of supply in the event of the loss of a sole
supplier. In addition, the price of raw materials varies, often substantially,
from year to year.

A
substantial portion of Celaneses products and raw materials are commodities whose
prices fluctuate as market supply/demand fundamentals change. Celaneses production
facilities rely largely on coal, fuel oil, natural gas and electricity for energy. Rising
coal prices in the United States leveled off at the end of 2001 and remained at these
levels through 2002. Natural gas prices continued to decline through the first half of
2002 but began to increase in the third and fourth quarters. Most of these raw materials
for Celaneses European operations are centrally purchased by a subsidiary of
Celanese, which also buys raw materials on behalf of third parties. Celanese manages its
exposure through the use of derivative instruments and forward purchase contracts for
commodity price hedging, entering into long-term supply agreements, and multi-year
purchasing and sales agreements. Celaneses policy allows the forward purchase of up
to 80 percent of its natural gas and butane requirements, generally for up to 18 months
using forward purchase or cash-settled swap contracts. During 2002, Celanese entered into
forward purchase and cash-settled swap contracts for approximately 50 percent of its
estimated natural gas requirements, generally for up to three to six months forward. As
these forward contracts expire, Celanese may be exposed to future price fluctuations if
the forward purchase contracts are not replaced, or

27

---



if it  elects to replace them,
Celanese may have to do so at higher costs. In the first quarter of 2003, Celanese also
purchased option contracts related to approximately 5 to 10 percent of its ethylene
requirements. In addition, in 2002 Celanese pre-paid U.S. $25 million (24 million) in a
cost-based supply agreement and anticipates additional payments approximating 70
million over the next three years. Although Celanese seeks to offset increases in raw
material prices with corresponding increases in the prices of its products, it may not be
able to do so, and there may be periods when such product price increases lag behind raw
material cost increases. In the future, Celanese may modify its practice of purchasing a
portion of its commodity requirements forward, and consider utilizing a variety of other
raw material hedging instruments in addition to forward purchase contracts in accordance
with changes in market conditions.

## Research and Development

All
of Celaneses businesses conduct research and development activities to
increase competitiveness. Celaneses Technical Polymers Ticona and
Performance Products segments in particular are innovation-oriented businesses
that conduct research and development activities to develop new, and optimize
existing, production technologies, as well as to develop commercially viable new
products and applications.

The
Acetyl Products and Chemical Intermediates segments have been focusing on
improving core production technologies, such as improving catalyst development,
and supporting both debottlenecking and cost reduction efforts. New business
opportunities for amines and oxo derivatives are developed in conjunction with
research and development support from the Oberhausen, Germany technical center.
As a part of Celaneses Forward initiative, the Acetyl Products
and Chemical Intermediates segments relocated research and development functions
in the United States to the Bishop, Texas and Clear Lake, Texas plants during
the second half of 2002. Celanese believes that relocating the research function
closer to the manufacturing facilities will result in a further increase of
productivity.

The
Acetate Products segment has been concentrating on developing new fabrics using
acetate filament and new applications for other acetate materials, such as their
use in disposable consumer materials.

Research
in the Technical Polymers Ticona segment is focused on the development of new
formulations and applications for its products, improved manufacturing processes
and new polymer materials with varying chemical and physical properties in order
to meet customer needs and to generate growth. This effort involves the entire
value chain from new or improved monomer production, polymerization and
compounding, to working closely with end-users to identify new applications that
can take advantage of these high performance features. Ticona is continually
improving compounding recipes to extend product properties and grades, while
offering grade consistency on a global basis. In addition, Ticona is developing
new polymerization and manufacturing technology in order to meet economic and
ecological goals without sacrificing high quality processing.

The
research and development activities of the Performance Products segment are
conducted at Nutrinovas Frankfurt, Germany location. They are directed
towards expanding its existing technologies and developing new applications for
existing products in close cooperation with its customers.

Celaneses
innovative products subsidiary, Celanese Ventures GmbH, promotes research
projects that lie outside Celaneses core businesses or are in an early
stage of development. Presently, Celanese Ventures is developing and marketing
membrane-electrode assemblies for high temperature fuel cells. Another area of
competency is high performance catalysts. Celanese Ventures captures the value
of promising technologies with licensing and development agreements, as well as
by selling to strategic investors those projects that no longer fit
Celaneses long-term goals. Celanese Ventures operates research and
development and pilot manufacturing facilities in Frankfurt, Germany; Summit,
New Jersey; and Charlotte, North Carolina.

Research
and development costs are included in expenses as incurred. Celaneses
research and development costs for 2002, 2001 and 2000 were 74 million,
87 million and 87 million, respectively. For additional information
on Celaneses research and development expenses, see Item 5.
Operating and Financial Review and Prospects  Summary of Consolidated
Results  2002 Compared with 2001.

28

---



## Intellectual Property

Celanese
attaches great importance to patents, trademarks, copyrights and product designs
in order to protect its investment in research and development, manufacturing
and marketing. Celaneses policy is to seek the widest possible protection
for significant product and process developments in its major markets. Patents
may cover products, processes, intermediate products and product uses.
Protection for individual products extends for varying periods in accordance
with the date of patent application filing and the legal life of patents in the
various countries. The protection afforded, which may also vary from country to
country, depends upon the type of patent and its scope of coverage. In most
industrial countries, patent protection exists for new substances and
formulations, as well as for unique applications and production processes. For
example, in 2002, Ticona doubled the annual number of invention disclosures to
over forty. Celanese monitors its competitors and vigorously challenges patent
and trademark infringement. For example, the Acetyl Products segment maintains a
strict patent enforcement strategy, which has resulted in favorable outcomes in
a number of patent infringement matters in Europe, Asia and the United States.
Celanese is currently pursuing a number of matters relating to the infringement
of its acetic acid patents. Some of Celaneses earlier acetic acid patents
will expire in 2007; other patents covering acetic acid are presently pending.

As
patents expire, the products and processes described and claimed in those
patents become generally available for use by the public. Celanese believes that
the loss of no single patent which may expire in the next several years will
materially adversely affect the business or financial results of Celanese.

Celanese
also seeks to register trademarks extensively as a means of protecting the brand
names of its products, which brand names become more important once the
corresponding patents have expired. Celanese protects its trademarks vigorously
against infringement and also seeks to register design protection where
appropriate.

## Environmental and Other Regulation

Obtaining,
producing and distributing many of Celaneses products involves the use,
storage, transportation and disposal of toxic and hazardous materials. Celanese
is subject to extensive, evolving and increasingly stringent national and local
environmental laws and regulations, which address, among other things, the
following:

| |  |  | Emissions
to the air;
| | - |  | ---------------------

| |  |  | Discharges
to surface and subsurface waters;
| | - |  | --------------------------------------------

| |  |  | Other
releases into the environment;
| | - |  | ------------------------------------

| |  |  | Generation,
handling, storage, transportation, treatment and disposal of waste  materials;
| | - |  | ------------------------------------------------------------------------------------------

| |  |  | Maintenance
of safe conditions in the workplace; and
| | - |  | ----------------------------------------------------

| |  |  | Production,
handling, labeling or use of chemicals used or produced by Celanese.
| | - |  | --------------------------------------------------------------------------------

Celanese
is subject to environmental laws and regulations that may require it to remove
or mitigate the effects of the disposal or release of chemical substances at
various sites. Under some of these laws and regulations, a current or previous
owner or operator of property may be held liable for the costs of removal or
remediation of hazardous substances on, under, or in its property, without
regard to whether the owner or operator knew of, or caused the presence of the
contaminants, and regardless of whether the practices that resulted in the
contamination were legal at the time they occurred. As many of Celaneses
production sites have an extended history of industrial use, it is impossible to
predict precisely what effect these laws and regulations will have on Celanese
in the future. Soil and groundwater contamination has occurred at some Celanese
sites, and might occur or be discovered at other sites.

In
December 1997, the Conference of the Parties of the United Nations Framework
Convention on Climate Change drafted the Kyoto Protocol, which would establish
significant emission reduction targets for six gases considered to have global
warming potential (referred to as greenhouse gases) and would drive mandatory
reductions in developed nations subject to the Protocol. To date, the Protocol
has not been adopted by enough of the larger, industrialized countries (defined
in Annex I to the Protocol) to come into effect. Nevertheless, Germany and other
countries where Celanese has interests have made commitments to the Kyoto
Protocol and are in various stages of formulating applicable regulations. The
United States has rejected the approach taken in the Protocol and is looking at
other potential solutions.

29

---



In
2002, President Bush announced new climate change initiatives for the United States. Among
the policies to be pursued is a voluntary commitment to reduce the
greenhouse gas intensity of the U.S. economy by 18 percent within
the next ten years. The Bush Administration is seeking to partner with various
industrial sectors, including the chemical industry, to reach this goal. The
American Chemistry Council, of which Celanese is a member, has committed to
pursue additional reductions in greenhouse gas intensity toward an overall
target of 18 percent by 2012, using 1990 emissions intensity as the baseline.
Celanese currently emits carbon dioxide and smaller amounts of methane and
experiences some losses of polyfluorinated hydrocarbons used as refrigerants.
Celanese has invested and continues to invest in improvements to its processes
that increase energy efficiency and decrease greenhouse gas intensity.

It
is Celaneses policy to comply with all environmental, health and safety
requirements and to provide safe and environmentally sound workplaces for
employees. In some cases, compliance can be achieved only by incurring capital
expenditures. For example, various draft regulations under consideration in the
United States, including the Miscellaneous Organic National Emissions Standards
for Hazardous Air Pollutants regulations, and various approaches to regulating
boilers and incinerators could impose additional requirements on Celaneses
operations. Celaneses worldwide expenditures in 2002, including those with
respect to third party and divested sites, for compliance with environmental
control regulations and internal company initiatives totaled 102 million,
of which 4 million was for capital projects. It is anticipated that
stringent environmental regulations will continue to be imposed on Celanese and
the industry in general. Although Celanese cannot predict with certainty future
expenditures, management believes that the current spending trends will
continue.

Other
new or revised regulations may place additional requirements on the production,
handling, labeling or use of some chemical products. Various United States
programs, including the Voluntary Childrens Chemical Evaluation Program
and High Production Volume Chemical Initiative, and various European Commission
programs, including the White Paper on Strategy for a Future Chemicals Policy,
will potentially require toxicological testing and risk assessments of a wide
variety of chemicals, including chemicals used or produced by Celanese.

Pursuant
to a European Union regulation on Risk Assessment of Existing Chemicals, the
European Chemicals Bureau of the European Commission has been conducting risk
assessments on approximately 140 major chemicals. Some of the chemicals
initially being evaluated include competitors products, for instance
styrene and 1,3-butadiene, as well as vinyl acetate monomer or VAM, which
Celanese also produces. These risk assessments entail a multi-stage process to
determine whether and to what extent the Commission should classify the chemical
as a carcinogen and, if so, whether this classification, and related labelling
requirements, should apply only to finished products that contain specified
threshold concentrations of a particular chemical. In the case of VAM, a final
ruling is not expected until the end of 2003. Celanese and other VAM producers
are participating in this process with detailed scientific analyses supporting
the industrys position that VAM is not a probable human carcinogen and
that labeling of final products should not be required but that, if it is,
should only be at relatively high ppm levels. It is not possible for Celanese to
predict the outcome or effect of any final ruling.

Depending
on the outcome of the above-mentioned assessments in the United States and
Europe, additional requirements may be placed on the production, handling,
labeling or use of the subject chemicals. Such additional requirements could
increase the cost incurred by Celaneses customers to use its chemical
products and otherwise limit the use of these products, which could adversely
affect the demand for these products.

Celanese
is subject to claims brought by United States federal or state regulatory
agencies, regulatory agencies in other jurisdictions or private individuals
regarding the clean-up of sites that Celanese owns, owned, operated or where
waste from its operations was disposed, treated or recycled. In particular,
Celanese has a potential liability under the United States Federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended,
commonly known as Superfund, the United States Resource Conservation and
Recovery Act, and related state laws, or regulatory requirements in other
jurisdictions, or through obligations retained by contractual agreements for
investigation and clean-up costs at approximately 50 sites. At many of these
sites, numerous companies, including Celanese, or one of its predecessor
companies, have been notified that the Environmental Protection Agency or EPA,
state governing body or private individuals consider such companies to be
potentially responsible parties under Superfund or related laws. The proceedings
relating to these sites are in various stages. The clean-up process has not been
completed at most sites. Celanese regularly reviews the

30

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liabilities for these  sites and
has accrued its best estimate of its ultimate liability for  investigation or clean-up
costs, but, due to the many variables involved in such  estimation, the ultimate
liability may vary from these estimates. Expenditures  for investigation, clean-up and
related activities have been 5 million for  the three years ended December 31,
2002, with expenditures in no year greater  than 2 million.

Celaneses
wholly-owned subsidiary, InfraServ Verwaltungs GmbH, is the general partner of
the InfraServ companies that provide on-site general and administrative services
at German sites in Frankfurt am Main-Höchst, Gendorf, Hürth-Knapsack,
Wiesbaden, Oberhausen and Kelsterbach. Producers at the sites, including
subsidiaries of Celanese, are owners of limited partnership interests in the
respective InfraServ companies. Effective January 1, 2001, Celanese sold its
limited partnership interest in InfraServ GmbH & Co. Münchsmünster
KG, the company that owns the production site in Münchsmünster, to
Ruhr Oel GmbH. In March 2002, Celanese sold its interest in InfraServ GmbH &
Co. Deponie Knapsack KG, or Deponie, to Trienekens AG, a company active in all
areas of waste management and majority owned by RWE Umwelt AG. RWE Umwelt is
owned by RWE AG, one of Germanys largest utility companies. In the
transaction, Deponies financial assets, including a cash reserve of
58 million required to be held in reserve by the German authorities to
support landfill and land reclamation activities, receivables, as well as all
Deponies liabilities (including those corresponding to the cash reserve)
were transferred to the buyer upon closing of the sale.

The
InfraServ companies are liable for any residual contamination and other
pollution because they own the real estate on which the individual facilities
operate. In addition, Hoechst, as the responsible party under German public law,
is liable to third parties for all environmental damage that occurred while it
was still the owner of the plants and real estate. However, the InfraServ
companies have agreed to indemnify Hoechst from any environmental liability
arising out of or in connection with environmental pollution of any InfraServ
site. The partnership agreements provide that, as between the limited partners,
each limited partner is responsible for any contamination caused predominantly
by such partner. The limited partners have also undertaken to indemnify Hoechst
against such liabilities. Any liability that cannot be attributed to an
InfraServ partner and for which no third party is responsible, is required to be
borne by the InfraServ company in question. In view of this potential obligation
to eliminate residual contamination, the InfraServ companies in which Celanese
has an interest, have recorded provisions totaling approximately 58
million as of December 31, 2002. If the InfraServ companies default on their
respective indemnification obligations to eliminate residual contamination, the
limited partners in the InfraServ companies have agreed to fund such
liabilities, subject to a number of limitations. To the extent that any
liabilities are not satisfied by either the InfraServ companies or the limited
partners, these liabilities are to be borne by Celanese in accordance with the
demerger agreement. As between Hoechst and Celanese, Hoechst has agreed to
indemnify Celanese for two-thirds of these demerged residual liabilities.
Likewise, in certain circumstances Celanese could be responsible for the
elimination of residual contamination on a few sites that were not transferred
to InfraServ companies, in which case Hoechst must reimburse Celanese for
two-thirds of any costs so incurred.

Some
of Celaneses facilities in Germany are over 100 years old, and there may
be significant contamination at these facilities. With respect to its German
sites, as with its other sites, Celanese records a provision for environmental
matters when it is obligated by law, through irrevocable agreements with
governmental authorities or through firm commitments, to remediate the
facilities.

Provisions
are not recorded for potential soil contamination liability at facilities still
under operation, as German law does not currently require such contamination to
be remedied until the facility is closed and dismantled, unless the authorities
otherwise direct. If Celanese were to terminate operations at one of its
facilities or if German law were changed to require such removal or clean up,
the cost could be material to Celanese. Celanese cannot accurately determine the
ultimate potential liability for investigation and clean up at such sites.
Celanese adjusts provisions as new remedial commitments are made. See Note 25 to
the Consolidated Financial Statements.

It
is difficult to estimate the future costs of environmental protection and
remediation because of many uncertainties, including uncertainties about the
status of laws, regulations and information related to individual locations and
sites. Subject to the foregoing, but taking into consideration Celaneses
experience to date regarding environmental matters of a similar nature and facts
currently known, Celanese believes that capital expenditures and remedial
actions to comply with existing laws governing environmental protection will not
have a material adverse effect on Celaneses business and financial
results. As of December 31, 2002, Celanese has reserves of 199 million for
environmental matters worldwide.

31

---



In
the demerger agreement, Celanese agreed to indemnify Hoechst against
environmental liabilities for environmental contamination that could arise under
some divestiture agreements regarding chemical businesses, participations or
assets that were entered into by Hoechst prior to the demerger. Celanese and
Hoechst have agreed that Celanese will indemnify Hoechst against those
liabilities up to an amount of 250 million. Hoechst will bear those
liabilities exceeding 250 million, but Celanese will reimburse Hoechst for
one-third of those liabilities for amounts that exceed 750 million.
Celanese has made payments through December 31, 2002 of 32 million for
environmental contamination liabilities in connection with the divestiture
agreements. As of December 31, 2002, Celanese has reserves of 57 million
for this contingency and may be required to record additional reserves in the
future. See Note 25 to the Consolidated Financial Statements.

Celanese
believes it is in substantial compliance with all environmental, health and
safety laws and regulations and continues to devote attention to the health and
safety of its employees and the protection of the public health and the
environment in the regions where it operates. Such compliance has not had an
adverse effect on Celaneses competitive position or business. Celanese
cannot predict the effect of regulations that may be adopted in the future by
governmental bodies responsible for air, water and solid waste pollution
controls and employee and community health and safety.

## Organizational Structure

Significant Subsidiaries

Celanese
AG operates its global businesses through subsidiaries in Europe, North America
and Asia, most of which are owned indirectly through a German holding company
and wholly-owned subsidiary, Celanese Holding GmbH. Celanese Chemicals Europe
GmbH and Ticona GmbH are owned directly by Celanese AG. In North America, many
of the businesses are consolidated under Celanese Americas Corporation, a
wholly-owned subsidiary which, through its wholly-owned subsidiary, CNA
Holdings, Inc., directly or indirectly owns the North American operating
companies. The table below sets forth Celaneses significant subsidiaries:

|                                                       
|-------------------------------------------------------
|
|                                                       
|Celanese Canada Inc.                                   
|                                                       
|Celanese Chemicals Europe GmbH                         
|                                                       
|Celanese Holding GmbH                                  
|                                                       
|Nutrinova Nutrition Specialties & Food Ingredients GmbH
|                                                       
|Ticona GmbH                                            
|                                                       
|Grupo Celanese SA                                      
|                                                       
|Celanese Singapore Pte. Ltd.                           
|                                                       
|Celanese Acetate LLC                                   
|                                                       
|Celanese Americas Corporation                          
|                                                       
|Celanese Ltd.                                          
|                                                       
|CNA Holdings, Inc.                                     
|                                                       
|Ticona Polymers, Inc.                                  
|                                                       

## Description of Property

Celaneses
principal executive offices are located in Kronberg/Taunus, Germany.

As
of December 31, 2002, Celanese had numerous production and manufacturing
facilities throughout the world. Celanese also owns or leases other properties,
including office buildings, warehouses, pipelines, research and development
facilities and sales offices.

The
following table sets forth a list of the principal production and other
facilities of Celanese throughout the world.

|                        
|------------------------
|Corporate Center        
|                        
|Site                    
|                        
|Kronberg/Taunus, Germany
|                        

32

---



|                            
|----------------------------
|Acetyl Products             
|                            
|Site                        
|                            
|Bay City, Texas, USA        
|                            
|Bishop, Texas, USA          
|                            
|Calvert City, Kentucky, USA 
|                            
|Cangrejera, Veracruz, Mexico
|                            
|Clear Lake, Texas, USA      
|                            
|Edmonton, Alberta, Canada   
|                            
|Frankfurt am Main, Germany  
|                            
|Pampa, Texas, USA           
|                            
|Pasadena, Texas, USA        
|                            
|Jurong Island, Singapore    
|                            
|Koper, Slovenia(2)          
|                            
|Tarragona, Spain            
|                            
|Tarragona, Spain(2)         
|                            
|Tarragona, Spain(2)         
|                            
|Perstorp, Sweden(2)         
|                            

|(1) |  | The
decision to  manufacture methanol at the Clear Lake plant is evaluated periodically,
depending on market conditions.
|--- |  | ------------------------------------------------------------------------------------------------------------------------

|(2) |  | Acquired
on December 31, 2002 from Clariant AG.
|--- |  | -----------------------------------------------

33

---



|                            
|----------------------------
|Chemical Intermediates      
|                            
|Site                        
|                            
|Bay City, Texas, USA        
|                            
|Cangrejera, Veracruz, Mexico
|                            
|Clear Lake, Texas, USA      
|                            
|Oberhausen, Germany         
|                            
|Pampa, Texas, USA           
|                            

|                              
|------------------------------
|Acetate Products              
|                              
|Site                          
|                              
|Edmonton, Alberta, Canada     
|                              
|Lanaken, Belgium              
|                              
|Narrows, Virginia, USA        
|                              
|Ocotlán, Jalisco, Mexico      
|                              
|Rock Hill, South Carolina, USA
|                              

34

---



|                               
|-------------------------------
|Technical Polymers Ticona      
|                               
|Site                           
|                               
|Auburn Hills, Michigan, USA    
|                               
|Bishop, Texas, USA             
|                               
|Florence, Kentucky, USA        
|                               
|Kelsterbach, Germany           
|                               
|Oberhausen, Germany            
|                               
|Shelby, North Carolina, USA    
|                               
|Wilmington, North Carolina, USA
|                               
|Winona, Minnesota, USA         
|                               

|(3) |  | Technical
Polymers Ticonas leased plant for its Topas cycloolefin copolymer in Oberhausen,
Germany commenced production in September 2000. As Topas continues to undergo market
development, the plant is operating at significantly less than commercial capacity. For
further information on Topas, see Information on the Company  Technical
Polymers Ticona.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Technical
Polymers Ticona completed a significant expansion of its Vectra LCP plant in Shelby, North
Carolina in the second quarter of 2002. The downturn in the telecommunications industry, a
principal market for Vectra, coupled with the increased capacity, has resulted in this
plant operating at significantly less than commercial capacity.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                          
|--------------------------
|Performance Products      
|                          
|Site                      
|                          
|Frankfurt am Main, Germany
|                          

Polyplastics
has its principal production facilities in Japan, Taiwan and Malaysia. Korea
Engineering Plastics has its principal production facilities in South Korea.
Celaneses Acetyl Products segment has a joint venture with manufacturing
facilities in Saudi Arabia, and its Acetate Products segment has three joint
ventures with production facilities in China.

In
2002, Celanese and its consolidated subsidiaries, in the aggregate, had capital
expenditures for the expansion and modernization of production, manufacturing,
research and administrative facilities of 218 million. In 2001 and 2000,
these expenditures amounted to 217 and 218 million, respectively.
Celanese believes that its current facilities and those of its consolidated
subsidiaries are adequate to meet the requirements of Celaneses

35

---



present  and foreseeable future
operations. Celanese continues to review its capacity  requirements as part of its
strategy to maximize its global manufacturing  efficiency.

For
information on environmental issues associated with Celaneses properties,
see Information on the Company  Environmental and Other
Regulation and Item 5. Operating and Financial Review and Prospects
Liquidity and Capital ResourcesEnvironmental Matters.
Additional information with respect to Celaneses property, plant and
equipment, and leases is contained in Notes 11 and 22 to the Consolidated
Financial Statements.

### Item
5. Operating and Financial Review and Prospects

You
should read the following discussion and analysis of the financial condition and
the results of operations of Celanese together with Celaneses Consolidated
Financial Statements and the notes to those financial statements, which were
prepared in accordance with U.S. GAAP.

Investors
are cautioned that the forward-looking statements contained in this section
involve both risk and uncertainty. Several important factors could cause actual
results to differ materially from those anticipated by these statements. Many of
these statements are macroeconomic in nature and are, therefore, beyond the
control of management. See Forward-Looking Statements May Prove
Inaccurate located at the end of this section.

### Basis
of Presentation

On
October 22, 1999, the effective date of the demerger, Celanese was formed
through the demerger of the principal industrial chemicals businesses and some
other businesses and activities from Hoechst. Hoechst distributed all of the
outstanding shares of Celanese to existing Hoechst shareholders.

The
Consolidated Financial Statements reflect, for the periods indicated, the
financial condition, results of operations and cash flows of Celanese and its
wholly-owned subsidiaries and have been presented to show separately the effects
of discontinued operations. See Summary of Consolidated Results 
2002 Compared with 2001  Discontinued Operations
for the Years Ended December 31, 2002, 2001 and 2000.

The
financial condition, results of operations and cash flow of Celanese have been,
and may in the future be, affected by special charges. Special charges include
provisions for restructuring, asset impairments and other unusual expenses and
income incurred outside the ordinary course of business. Special charges totaled
1 million of income in 2002 and expense of 496 million and 21
million in 2001 and 2000, respectively. For a further discussion of special
charges, see Summary by Business Segment  2002 Compared with 2001
 Special Charges, Summary of Consolidated Results  2002
Compared with 2001  Special Charges, Summary by Business
Segment  2001 Compared with 2000  Special Charges and
Summary of Consolidated Results  2001 Compared with 2000 
Special Charges.

Effective
January 1, 2002, Celanese adopted Statement of Financial Accounting Standards
(SFAS) No. 142, Goodwill and Other Intangible Assets, and
accordingly applied the standards of the statement prospectively. This statement
addresses financial accounting and reporting for acquired goodwill and other
intangible assets and provides that goodwill and some intangibles no longer be
amortized on a recurring basis. Instead, goodwill and intangible assets with an
indefinite life are subject to an initial impairment test upon adoption of SFAS
No. 142 and at least annually thereafter. The related charges in 2001 were a net
expense of 77 million in selling, general and administrative expense and
6 in equity in net earnings of affiliates. Additionally, SFAS No. 142
requires that any unamortized negative goodwill (excess of fair value over cost)
on the balance sheet be written off immediately and classified as a cumulative
effect of change in accounting principle in the consolidated statement of
operations. As a result, income of 10 million was recorded to cumulative
effect of changes in accounting principles in Celaneses Consolidated
Statement of Operations in the first quarter of 2002.

Effective
October 2002, Celanese early adopted SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activitiesand accordingly applied the
statement prospectively to exit and disposal activities initiated after
September 30, 2002. See  Summary of Consolidated Results  2002
Compared with 2001  Special Charges.

In
2002, Celanese changed the actuarial valuation measurement date for its U.S.
pension and other postretirement benefit plans from September 30 to December 31.
Celanese believes this method is preferable in the circumstances because a
calendar year reporting will bring the valuation date in line with
Celaneses fiscal

36

---



year-end reporting and allow for a
more current measurement of the related actuarial components. Celanese accounted for this
as a change in accounting principle, which resulted in a cumulative effect adjustment in
2002. As a result, income of 9 million, net of income taxes of 5 million, was
recorded to cumulative effect of change in accounting principles in Celaneses
Consolidated Statement of Operations. In addition, this change reduced total 2002 pension
expense by approximately 14 million.

Celanese
evaluates performance based on operating profit, net earnings, cash flows and
other measures of financial performance reported in accordance with U.S. GAAP.
Besides these measures, earnings before interest, taxes, depreciation and
amortization (EBITDA), excluding special charges, is considered
appropriate for evaluating the performance of its operating segments as it
closely reflects cash flow management. EBITDA, which may be calculated
differently by other companies, is calculated by adding depreciation and
amortization expense back to operating profit (loss). Celanese excludes special
charges from EBITDA for better comparability between periods. EBITDA eliminates
the effect of depreciation and amortization of tangible and intangible assets.

### Major
Events in 2002

Enhancing the value
of Celaneses portfolio:

| |  |  | Acquisition
of the European emulsions and global emulsion powders business from Clariant AG,
Switzerland
| | - |  | --------------------------------------------------------------------------------------------------------

| |  |  | Divestiture of
Trespaphan, the oriented polypropylene (OPP) film business
| | - |  | -------------------------------------------------------------------------

| |  |  | Formation of a 50/50
European joint venture with Hatco Corporation, U.S. for production and marketing of
neopolyol esters, a basic raw material for synthetic lubricants
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Continuing
internal growth activities:

| |  |  | Start-up of a new
30,000 ton per year GUR® ultra-high molecular weight polyethylene plant in Bishop,
Texas, U.S.
| | - |  | ----------------------------------------------------------------------------------------------------------------

| |  |  | Completion of capacity
expansion for Vectra® liquid crystal polymers in Shelby, North Carolina,
U.S.
| | - |  | ----------------------------------------------------------------------------------------------------

| |  |  | Opening of the
worlds first pilot plant for high temperature membrane electrode assemblies for fuel
cells in Frankfurt, Germany
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

| |  |  | Announcement to
construct with Asian partners a world-scale 60,000 ton per annum polyacetal plant in
China, with operations expected to start during 2005
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

Additional
highlights:

| |  |  | Cost savings of an
estimated 100 million achieved in 2002 associated with the Focus and
Forward restructuring programs, initiated in 2001
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Agreement with BOC
p.l.c., United Kingdom to supply carbon monoxide that feeds the acetic acid production
facility at the Clear Lake, Texas site in a move to decrease costs and improve
efficiency
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Divestiture of global
allylamines and U.S. alkylamines business with production sites in Portsmouth, Virginia
and Bucks, Alabama
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

| |  |  | Initiation in December
2002 of a buy back of up to 1,031,941 shares, expected to be completed by the end of April
2003
| | - |  | ----------------------------------------------------------------------------------------------------------------------

| |  |  | Expensing of stock
options commenced in July 2002 at a total estimated cost of 10 million, of which
approximately 3 million was recognized in 2002
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Agreement with Degussa AG, Germany to establish a 50/50 joint venture for the
European oxo chemicals business, subject to regulatory approval in 2003
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Appointment of Dr.
Andreas Pohlmann as chief administrative officer to the Board of Management, responsible
for Performance Products and Celanese Ventures, and as director of personnel. He succeeds
Prof. Ernst Schadow, who retired in October 2002.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

37

---



### Financial
Highlights

|                                                     | Year Ended December 31, |           
|---------------------------------------------------- | ----------------------- | ----------
|
|
|Net sales                                            |                         | 4,535     
|Gross profit                                         |                         | 715       
|Special charges                                      |                         | 1         
|Depreciation and amortization                        |                         | 300       
|Operating profit (loss)                              |                         | 162       
|EBITDA excluding special charges(2)                  |                         | 461       
|Earnings (loss) from continuing operations           |                         | 117       
|Earnings (loss) from discontinued operations         |                         | 58        
|Cumulative effect of changes in                      |                         |           
|accounting principles                                |                         | 20        
|Net earnings (loss)                                  |                         | 195       
|Weighted average shares  basic and diluted          |                         | 50,329,346
|Earnings (loss) per common share  basic and diluted |                         |           
|from continuing operations                           |                         | 2.32      
|from discontinued operations                         |                         | 1.15      
|from cumulative effect of change in                  |                         |           
|accounting principles                                |                         | 0.40      
|from net earnings (loss)                             |                         | 3.87      

|                         |  | As of December 31, |      
|------------------------ |  | ------------------ | -----
|
|
|Trade working capital(3) |  |                    | 647  
|Total assets             |  |                    | 6,424
|Net financial debt(4)    |  |                    | 521  
|Shareholders equity     |  |                    | 2,102

---

|(1) |  | The U.S. $ figures are unaudited and have been translated solely for the
convenience of the reader at an exchange rate of U.S.$1.0485 per 1.00, the
noon buying rate of the Federal Reserve Bank of New York on December 31, 2002.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Celanese defines EBITDA excluding special charges as operating profit plus
depreciation and amortization plus special charges.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Celanese defines trade working capital as trade accounts receivable from third
parties and affiliates net of allowance for doubtful accounts, plus inventories,
less trade accounts payable to third parties and affiliates.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Celanese defines net financial debt as short-term borrowings and current
installments of long-term debt plus long-term debt less cash and cash
equivalents.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------

### Overview
 2002 Compared with 2001

In
a global business environment characterized by slow and uneven growth, net
earnings increased significantly to 187 million in 2002 from a loss of
385 million in the prior year. The increase reflected lower special
charges, lower raw material and energy costs, lower amortization expense due to
the adoption of SFAS No. 142, savings from restructuring and operational
excellence initiatives, improved capacity utilization rates in the Acetyl
Products segment, and an increase in demand in the Technical Polymers Ticona
segment. Additionally, net earnings benefited from a cumulative effect of
changes in accounting principles of 19 million, net of income tax, and
positive effects from the sale of discontinued operations of 55 million.
These effects were reduced by lower pricing in most segments, the effect of year
on year changes in LIFO inventory and unfavorable currency effects, principally
the appreciation of the euro against the U.S. Dollar. Operating cash flow
remained strong, though below last years level, as trade working capital
increased slightly compared to year-end 2001. 2002 capital expenditures were at
similar levels to the previous year.

38

---



Segment
sales declined 9% as higher volumes (+2%) could not offset lower pricing (-8%)
and unfavorable currency effects (-3%). EBITDA excluding special charges
increased 11%, reflecting lower operating costs and slightly improved demand
conditions partially offset by weaker pricing for our products. Volumes
increased in Ticona, on modest demand improvement from the automotive and other
end-use industries, especially in Europe. In Performance Products, volumes of
Nutrinovas high intensity sweetener, Sunett®, continued to grow. In
Acetyl Products, somewhat higher demand and temporarily tight supply conditions
during the second half of 2002 led to improved capacity utilization rates.
Although overall selling prices were lower year on year, average pricing in the
Acetyl Products and Chemical Intermediates segments rose steadily throughout
2002. Continuing difficult merchant market conditions and weak pricing,
especially in acrylates, resulted in reduced performance in the Chemical
Intermediates segment. Profitability in the Acetate Products segment declined as
lower volumes in all products, mainly in filament, offset higher tow pricing and
cost savings from restructuring efforts.

Celanese
reduced its net financial debt by 40% from 835 million as of December 31,
2001 to 497 million as of December 31, 2002. The reduction was due to debt
repayment resulting from a continuing high level of cash from operations and net
proceeds of 100 million for the net assets and 78 million for the
repayment of borrowings from divestitures, combined with the effects of currency
movements of approximately 200 million. Operating cash flow declined
slightly from 522 in 2001 to 387 in 2002, as 2001 operating cash
flow reflected the benefits of a 297 million reduction in trade working
capital compared to 2000. Trade working capital in 2002 increased slightly
compared to year-end 2001 levels.

Celanese
had capital expenditures of 218 million in 2002, compared to 217
million in 2001. Major projects included the completion of a new 30,000 ton per
year plant to produce GUR® ultra-high molecular weight polyethylene in
Bishop, Texas, U.S. The plant began supplying customers in the fourth quarter of
2002. Celanese also completed the 6,000 ton per year expansion of capacity for
Vectra® liquid crystal polymers in Shelby, North Carolina, U.S. In
addition, Celanese began construction in 2002 of a new plant for synthesis gas,
an important raw material for the production of oxo and specialty chemicals, at
its Oberhausen, Germany site. The new plant is scheduled to come on stream in
the second half of 2003 and is expected to improve reliability and reduce
production costs.

The
Focus and Forward restructuring initiatives, started in
2001, generated estimated savings of approximately 100 million in 2002. In
2003, annual savings are expected to increase to approximately 140
million. In connection with these restructuring programs, most of the
approximate 1,500 positions identified had been eliminated by December 31, 2002.
Celaneses company-wide operational excellence efforts, including Six
Sigma, continued to contribute to profitability.

In
2002, Celanese made further progress in enhancing the value of its portfolio.
Celanese acquired the European emulsions and worldwide emulsion powders
businesses of Clariant AG, Switzerland in December 2002 for 147 million,
which included 125 million cash plus the assumption of debt and other
liabilities. Additionally, Celanese divested the Trespaphan OPP films business
of the Performance Products segment in December 2002 for 209 million,
which included 112 million in cash, the repayment of 78 million in
intercompany debt that Trespaphan owed Celanese AG and a purchase price
adjustment for liabilities assumed by the buyer. The acquisition of the emulsion
businesses extends Celaneses acetyls value chain into higher value
businesses and is expected to be earnings and cash flow positive in 2003.

Celanese
took a major step to address performance issues within the Chemical
Intermediates segment in 2002. Celanese signed an agreement with Degussa AG,
Germany to form a 50/50 joint venture for their European oxo activities. The
European Commission is currently conducting a detailed investigation into the
proposed joint venture. Celanese expects regulatory approval in 2003. In
addition, Celanese divested its global allylamines and U.S. alkylamines business
at the end of 2002.

39

---



### Selected
Data by Business Segment

|                                       | Year Ended December 31,
|-------------------------------------- | -----------------------
|
|
|
|Net Sales(3)                           |                        
|Acetyl Products                        |                        
|Chemical Intermediates                 |                        
|Acetate Products                       |                        
|Technical Polymers Ticona              |                        
|Performance Products                   |                        
|                                       |                        
|Segment Total                          |                        
|                                       |                        
|Other Activities                       |                        
|Intersegment Eliminations              |                        
|                                       |                        
|Total Net Sales                        |                        
|                                       |                        
|                                      
|Special Charges(4)                     |                        
|Acetyl Products                        |                        
|Chemical Intermediates                 |                        
|Acetate Products                       |                        
|Technical Polymers Ticona              |                        
|Performance Products                   |                        
|                                       |                        
|Segment Total                          |                        
|                                       |                        
|Other Activities                       |                        
|                                       |                        
|Total Special Charges                  |                        
|                                       |                        
|                                      
|Operating Profit (Loss)(3)             |                        
|Acetyl Products                        |                        
|Chemical Intermediates                 |                        
|Acetate Products                       |                        
|Technical Polymers Ticona              |                        
|Performance Products                   |                        
|                                       |                        
|Segment Total                          |                        
|                                       |                        
|Other Activities                       |                        
|                                       |                        
|Total Operating Profit (Loss)          |                        
|                                       |                        
|                                      
|EBITDA Excluding Special Charges(4)    |                        
|Acetyl Products                        |                        
|Chemical Intermediates                 |                        
|Acetate Products                       |                        
|Technical Polymers Ticona              |                        
|Performance Products                   |                        
|                                       |                        
|Segment Total                          |                        
|                                       |                        
|Other Activities                       |                        
|                                       |                        
|Total EBITDA Excluding Special Charges |                        
|                                       |                        

---

|(1) |  | The U.S. $ figures are unaudited and have been translated solely for the
convenience of the reader at an exchange rate of U.S.$1.0485 per 1.00, the
noon buying rate of the Federal Reserve Bank of New York on December 31, 2002.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | The
percentages in  this column represent the percentage contribution of each segment to the
total  of all segments.
|--- |  | --------------------------------------------------------------------------------------------------------------------

|(3) |  | Derived
from the accompanying audited Consolidated Financial Statements.
|--- |  | ------------------------------------------------------------------------

|(4) |  | For a further discussion of special charges, see Summary by Business
Segment  2002 Compared with 2001  Special Charges,
Summary of Consolidated Results  2002 Compared with 2001 
Special Charges, Summary by Business Segment  2001 Compared
with 2000  Special Charges and Summary of Consolidated Results
 2001 Compared with 2000  Special Charges.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

40

---



### Summary
by Business Segment  2002 Compared with 2001

Acetyl
Products

Net
sales for the Acetyl Products segment decreased by 11% to 1,923 million in
2002 from 2,155 million in 2001 primarily due to lower pricing (-12%) and
unfavorable currency effects (-3%), partially offset by higher volumes (+4%).
Selling prices for major products decreased year on year, following the decline
in hydrocarbon costs, particularly natural gas and ethylene. Although overall
selling prices were lower year on year, pricing rose steadily throughout 2002,
as a result of higher demand, temporarily tight supply conditions and a
sequential quarterly increase in raw material costs. Increased demand as well as
temporary supply-demand imbalances resulted in higher volumes for vinyl acetate
monomer in the United States and Asia, and for acetic acid and polyvinyl
alcohol, primarily in Asia.

In
special charges, the Acetyl Products segment recorded 3 million of income
in 2002 compared to 125 million of expense in 2001. The income of 3
million in 2002 resulted from favorable adjustments to restructuring reserves
recorded in 2001, due to lower than expected severance and other closure costs.
These adjustments were partially offset by employee severance costs recorded in
2002 for cost-savings initiatives at production sites.

The
2001 special charges related to 2001 restructuring initiatives of 121
million and fixed asset impairments of 18 million associated with the
acetyl derivatives and polyols business line. These special charges were offset
by a 14 million favorable adjustment to prior year restructuring
activities. The 121 million in restructuring initiatives included 78
million for the shutdown of the acetic acid, pentaerythritol, and vinyl acetate
monomer units in Edmonton, Alberta and 43 million relating primarily to
employee severance costs at plant and administrative sites as well as closure
costs associated with a research and development center in the United States.
The closure of the research and development center resulted from the decision to
relocate these functions to production sites. The 18 million fixed asset
impairment related to a reassessment of the expected long-term value of the
polyols product line.

Operating
profit for the Acetyl Products segment of 145 million in 2002 improved
from an operating loss of 73 million in 2001. This increase resulted
primarily from a reduction in special charges as noted above. Higher sales
volumes, benefits from productivity and restructuring initiatives and a faster
rise in selling prices than in raw material and energy costs contributed to this
improvement. Lower amortization expense of 33 million resulting from the
adoption of SFAS No. 142 also had a positive effect in 2002. Operating profit in
2001 benefited from a 39 million non-recurring compensation payment
associated with operational problems experienced by the carbon monoxide supplier
to Celaneses Singapore facility from July 2000 through May 2001. The
carbon monoxide supplier experienced operational difficulties in the third
quarter 2002, which were corrected during the fourth quarter and had minimal
impact on full year 2002 operating results due to insurance recoveries.

At
the end of 2002, Celanese completed the acquisition of the European emulsions
and global emulsion powders businesses of Clariant. Beginning in 2003, the
businesses were integrated into the Acetyl Products segment and are expected to
contribute positively to earnings and cash flow.

EBITDA
excluding special charges for the Acetyl Products segment rose by 44
million to 252 million in 2002 as compared to 208 million in 2001.
EBITDA excluding special charges as a percentage of sales increased to 13.1% in
2002 from 9.7% in 2001.

Chemical
Intermediates

Net
sales for the Chemical Intermediates segment decreased by 11% to 907
million in 2002 from 1,020 million in 2001, due to lower pricing (-8%) and
unfavorable currency effects (-3%). In all business lines, 2002 selling prices
were lower than in 2001 as pricing reflected lower costs for raw materials,
primarily propylene, and energy, as well as competitive pressure, primarily in
acrylates. Volumes in the acrylates business were lower due to reduced merchant
market opportunities, while oxo and specialties volumes increased slightly.

In
2002, the Chemical Intermediates segment recorded special charges of 3
million compared to 328 million in 2001. The 2002 special charges
primarily related to employee severance costs associated with cost savings
initiatives at production sites. The 2001 special charges largely resulted from
the impairment of most of the segments goodwill and a portion of its fixed
assets, due to a reassessment in the expected long-term value of the
segments underlying businesses.

41

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Of
the 328 million in special charges in 2001, 243 million related to
goodwill impairments and 63 million to fixed asset impairments resulting
primarily from the deterioration in the outlook of the acrylates and oxo
business lines. The remaining 28 million related to restructuring initiatives, primarily for employee severance costs at both plant and
administrative sites. These charges were partially offset by recoveries due to
Celanese of 6 million from third party site partners.

The
operating loss for the Chemical Intermediates segment decreased to 29
million from 374 million in 2001. This improvement was primarily due to
lower special charges as noted above. Operating profit also benefited from
productivity improvements and cost savings from restructuring initiatives. The
improvement was partially offset by a decline in acrylate prices, which fell
more than the decrease in raw material costs. Acrylates were negatively affected
by a continued decline in merchant market demand and pressure on selling prices
due to overcapacity. Operating results for the segment in 2002 also benefited
from lower amortization expense of 17 million resulting from the adoption
of SFAS No. 142.

EBITDA
excluding special charges for the Chemical Intermediates segment fell to
22 million in 2002 from 30 million in 2001. EBITDA excluding special
charges as a percentage of sales decreased to 2.4% in 2002 from 2.9% in 2001.

Acetate
Products

Net
sales for the Acetate Products segment decreased by 12% to 670 million in
2002 from 762 million in 2001. Lower sales volumes (-7%) and unfavorable
currency movements (-5%) contributed to the decline in sales in 2002. Average
pricing for acetate was stable in 2002 as higher tow prices offset lower
filament pricing. Volumes declined mainly due to lower demand for acetate
filament from the U.S. and European textile industries and ongoing fiber
substitution. Volumes of acetate flake, a primary raw material in acetate
filament and tow production, also decreased due to lower merchant sales. Tow
volumes were slightly lower in 2002 mainly due to reduced volumes in North
America and Europe, partially offset by improvements in other regions.

The
Acetate Products segment recorded no special charges in 2002 compared to
50 million in 2001. The charges in 2001 resulted from the costs associated
with the closure of acetate filament operations in Rock Hill, South Carolina and
Lanaken, Belgium, as well as for costs incurred with the relocation of filament
operations within the United States. Additional special charges were incurred in
connection with employee severance costs associated with a production facility
in Mexico.

The
Acetate Products segment recorded an operating profit of 24 million in
2002, compared to an operating loss of 32 million in 2001. Operating
profit in 2002 benefited from the absence of special charges and a 10
million decrease in amortization expense resulting from the implementation of
SFAS No. 142. Cost reductions from the Forward program and other productivity
initiatives partially offset the effects of lower sales volumes.

In
January 2003, the International Paper Company, a primary supplier of wood pulp
to Celaneses acetate flake production facilities in the United States,
announced that it would be shutting down its facility in Natchez, Mississippi.
Although Celanese believes it will have an adequate wood pulp supply from
International Paper for 2003 requirements, we expect that this plant closure
will result in increased operating expenses in 2003 from temporary increases in
wood pulp inventory, as well as by expenses associated with the qualification of
product from alternative suppliers.

EBITDA
excluding special charges for the Acetate Products segment was 81 million
in 2002 compared to 91 million in 2001. EBITDA excluding special charges
as a percentage of sales increased slightly to 12.1% in 2002 from 11.9% in 2001.

Technical
Polymers Ticona

Net
sales for the Ticona segment decreased by 2% to 757 million in 2002 from
773 million in 2001 as the result of lower selling prices (-3%) and
unfavorable currency movements (-3%), which were mostly offset by higher volumes
(+4%). Volumes increased mainly in polyacetal, reflecting some improvement in
demand from the automotive and other end-use industries, especially in Europe.
Volumes also improved in ultra-high molecular weight polyethylene, but declined
or were flat in other product lines. Average selling prices declined for most
product lines, primarily polyacetal. Polyacetal standard-grade pricing was
reduced in response to competitive pressure, mainly from Asian suppliers.

42

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In
special charges, the Ticona segment had expense of 8 million in 2002
compared to income of 9 million in 2001. The 2002 expense resulted from
restructuring costs associated with the consolidation of manufacturing
operations in Europe and the United States. The favorable adjustment in 2001 was
primarily due to higher than expected insurance reimbursements associated with
the plumbing cases, which were largely offset by restructuring expenses for
employee severance costs in the United States and Europe. These 2001
restructuring initiatives were taken to streamline administrative and
operational functions under Celaneses Forward initiative.

The
Ticona segment recorded an operating profit of 22 million in 2002 compared
to an operating loss of 15 million in 2001. The major factors contributing
to the earnings improvement were reduced raw material costs and increased sales
volumes. Operating results in 2002 also benefited from 22 million of lower
amortization expense due to the adoption of SFAS No. 142. These improvements
were partially offset by costs for maintenance shutdowns and startup costs
related to expansions, as well as the higher special charges noted above. The
Ticona segment continued to incur market development costs for cyclo-olefin
copolymers in 2002.

EBITDA
excluding special charges for the Ticona segment increased to 87 million
in 2002 compared to 52 million in 2001. EBITDA excluding special charges
as a percentage of sales rose to 11.5% in 2002 from 6.7% in 2001.

Performance
Products

Net
sales for the Performance Products segment, which consists of the Nutrinova food
ingredients business, increased by 1% to 161 million in 2002 from
159 million in 2001 due to increased volumes (+10%), largely offset by
price decreases (-9%). Increased volumes reflected strong growth of the high
intensity sweetener Sunett® from new applications in the beverage and
confectionary industries in the U.S. and Europe. Overall pricing declined,
mainly in connection with higher Sunett volumes to major customers. In sorbates,
pricing pressure from Asian competitors intensified in 2002, mainly in the
fourth quarter, due to worldwide overcapacity. We expect these conditions to
continue in 2003.

Operating
profit for the Performance Products segment of 48 million in 2002 improved
from 44 million in 2001. The increase is mainly a result of higher volumes
from new applications in Sunett, increased yields from manufacturing
efficiencies and cost reductions, which were mostly offset by lower pricing as
noted above.

EBITDA
excluding special charges for the Performance Products segment increased by
5 million to 55 million in 2002 from 50 million in 2001.
EBITDA excluding special charges as a percentage of sales rose to 34.2% in 2002
from 31.4% in 2001.

Other
Activities

Other
Activities includes revenues mainly from Celaneses captive insurance
companies, Celanese Ventures GmbH, Celanese Advanced Materials, Inc., as well as
ancillary businesses and service companies, which do not have significant sales.
Celanese Advanced Materials primarily consists of the high performance polymer
PBI and Vectran® polymer fiber product lines. In addition, Other Activities
includes Celanese corporate operating expenses.

Net
sales for Other Activities decreased by 18% to 68 million in 2002 from
83 million in 2001. This decline was primarily due to the divestiture of
an InfraServ subsidiary during the first quarter of 2002 and the expiration of a
number of service contracts and licensing fees at Celanese Ventures GmbH.

Other
Activities recorded 9 million of income in special charges in 2002
compared to a charge of 2 million in 2001. The 9 million income in
2002 similarly relates to a reduction in environmental reserves due to a
settlement of obligations associated with former Hoechst entities. The 2
million expense in 2001 primarily consisted of corporate employee severance
costs, which were partially offset by a 4 million favorable adjustment
related to a net reduction in reserves associated with settlements of
environmental indemnification and other obligations associated with former
Hoechst entities.

The
operating loss of Other Activities increased to 55 million in 2002 from
38 million in 2001. This was primarily due to an adjustment to loss
reserves at the captive insurance companies, lower third party commission income
earned by a procurement subsidiary and the reduction of revenues from Celanese
Ventures. This decrease was partially offset by a gain of 10 million on
the sale of an InfraServ subsidiary and an increase in income related to
adjustments in special charges as noted above.

43

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EBITDA
excluding special charges for Other Activities declined to a loss of 57
million in 2002 from a loss of 33 million in 2001.

### Summary
of Consolidated Results  2002 Compared with 2001

Net
Sales

Net
sales decreased by 9% to 4,325 million in 2002 as compared to 4,777
million in 2001 primarily as a result of lower selling prices and unfavorable
currency movements despite improved volumes in most segments. Decreases in the
Acetyl Products, Chemical Intermediates, Acetate Products and Ticona segments
were only slightly offset by an increase in the Performance Products segment.

Cost
of Sales

Cost
of sales decreased by 12% to 3,643 million in 2002 compared with
4,132 million in 2001. Cost of sales as a percentage of net sales
decreased to 84% in 2002 from 86% in 2001, reflecting lower raw material and
energy costs, primarily in the Acetyl Products, Chemical Intermediates and
Ticona segments, and cost reductions from productivity and restructuring
initiatives.

Selling,
General and Administrative Expenses

Selling,
general and administrative expenses decreased by 15% to 471 million in
2002 from 552 million in 2001 driven largely by a 77 million decline
in amortization expense resulting from the implementation of SFAS No. 142.
Excluding the effects of this amortization expense, selling, general and
administrative expenses as a percentage of sales were relatively flat. Selling,
general and administrative expenses were affected by lower third party
commission income earned by a procurement subsidiary of Celanese, and increased
selling efforts by the Ticona segment, offset by favorable currency fluctuations
and benefits from cost reduction efforts. In 2002 and 2001, Celanese had
favorable adjustments of 15 million and 12 million, respectively,
relating to reduction in environmental reserves due to favorable trends in
environmental remediation.

Research
and Development Expenses

Research
and development expenses decreased by 15% to 74 million in 2002 from
87 million in 2001. The reduction resulted primarily from Celaneses
strategy to concentrate the research and development efforts at production sites
within most businesses. Research and development expenses as a percentage of
sales remained flat at 2% for both 2002 and 2001.

Special
Charges

Effective
October 2002, Celanese early adopted SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activitiesand accordingly applied the
statement prospectively to exit or disposal activities initiated after September
30, 2002. The statement nullifies Emerging Issues Task Force (EITF)
Issue No. 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). The principal difference between SFAS No. 146 and EITF
Issue No. 94-3 relates to the recognition of a liability for a cost associated
with an exit or disposal activity. SFAS No. 146 requires recognition only when
the liability is incurred. In contrast, under Issue 94-3, a liability was
recognized when the Company committed to an exit plan.

In
2002, Celanese recorded special charges totaling 1 million of income,
which consisted of 19 million of restructuring charges, 10 million
of income from favorable adjustments to restructuring reserves recorded in 2001
and 2000, 9 million of income from other special charges related to a
reduction in reserves associated with settlements of environmental
indemnification obligations associated with former Hoechst entities and 1
million of income from reimbursements from third party site partners related to
prior year restructuring initiatives. The 19 million of additions to the
restructuring reserve in 2002 included employee severance costs of 11
million and plant and office closure costs of 8 million.

44

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The
19 million of additions to the  restructuring  reserve  included 10 million
under SFAS No. 146 and 9 million  under EITF  Issue No. 94-3, as explained below.

## SFAS No. 146
Initiatives

Initiatives
that commenced during the fourth quarter of 2002 and were recorded under SFAS
No. 146 represented restructuring additions for employee termination benefits of
4 million and plant and office closure costs of 6 million.

Acetyl
Products and Chemical Intermediates

Severance
costs as a result of the streamlining of chemical production facilities in the
United States and Germany amounted to 3 million in 2002. Future costs for
this initiative are estimated to be 2 million and are expected to be
incurred in 2003.

Technical
Polymers Ticona

The
Ticona segment plans to concentrate its European manufacturing operations in
Germany and as a result will cease its compounding operations in Telford, United
Kingdom by mid-year 2003. As a result, fixed asset impairments totaling 4
million were recorded in 2002. Additional costs of approximately 7 million
relating to employee severance and lease cancellation costs are expected in
2003. The restructuring will affect approximately 70 employees.

With
the construction of a new and expanded GUR® plant in Bishop, Texas, the GUR
operations in Bayport, Texas were transferred to the new facility.
Decommissioning and demolition costs associated with the Bayport closure are
estimated to be 2 million, all of which were accrued in 2002.

## EITF Issue No. 94-3
Initiatives

Restructuring
initiatives that commenced during the first three quarters of 2002, and recorded
under EITF Issue No. 94-3, represented 7 million of restructuring
additions for employee severance costs and 2 million of restructuring
additions for plant and office closure costs.

Employee
severance costs consisted primarily of 3 million for the shutdown of the
nylon polymer unit in Bishop, Texas, 1 million for personnel in the PVOH
business, and 3 million for adjustments related to 2001 Project Forward
initiatives as discussed below.

Plant
and office closure costs consisted mainly of asset write-offs of 2 million
for the nylon polymer unit shutdown in Bishop.

The
10 million of favorable adjustments in 2002 of prior year restructuring
reserves consisted of an 8 million adjustment to the 2001 reserves and a
2 million adjustment to the 2000 reserves. The 2001 adjustment was
primarily due to lower than expected personnel and closure costs associated with
the streamlining of chemical facilities in the United States, Canada, and
Germany. The 2000 adjustment was due to lower than expected demolition costs for
the Acetyl Products production facility in Knapsack, Germany.

Project
Focus, initiated in early 2001, set goals to reduce trade working
capital by 100 million compared to end of year 2000 levels, limit capital
expenditures to a maximum of the 2000 level of 235 million and contribute
100 million to EBITDA from programs to increase efficiency. Project
Forward was announced at the end of August 2001 and initiated
additional restructuring and other measures to reduce costs and increase
profitability. The 2001 restructuring initiatives detailed below resulted in a
reduced cost base and operational efficiencies in 2002.

45

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|                          |  |  | EmployeeTerminationBenefits |     | Plant/OfficeClosures |  | TotalRestructuring |     | Non-RestructuringSpecial Charges |  | Total SpecialCharges |     | Of whichnon-cash
|------------------------- |  |  | --------------------------- | --- | -------------------- |  | ------------------ | --- | -------------------------------- |  | -------------------- | --- | ----------------
|
|Focus                     |  |  |                             | 29  |                      |  |                    | 17  |                                  |  |                      | 46  |                 
|Forward                   |  |  |                             | 92  |                      |  |                    | 88  |                                  |  |                      | 180 |                 
|Goodwill Impairment       |  |  |                             |    |                      |  |                    |    |                                  |  |                      |    |                 
|Other                     |  |  |                             |    |                      |  |                    |    |                                  |  |                      |    |                 
|                          |  |  |                             |     |                      |  |                    |     |                                  |  |                      |    
|Subtotal                  |  |  |                             | 121 |                      |  |                    | 105 |                                  |  |                      | 226 |                 
|Restructuring Adjustments |  |  |                             | (2  | )                    |  |                    | (17 | )                                |  |                      | (19 | )               
|                          |  |  |                             |     |                      |  |                    |     |                                  |  |                      |    
|Total Special Charges     |  |  |                             | 119 |                      |  |                    | 88  |                                  |  |                      | 207 |                 
|                          |  |  |                             |     |                      |  |                    |     |                                  |  |                      |    

In
2001, Celanese recorded special charges totaling 496 million, which
consisted of 234 million of restructuring charges, which were reduced by
8 million of income for reimbursements from third party site partners and
income from forfeited pension plan assets, 19 million of favorable
adjustments to restructuring reserves recorded in 2000 and 2001 and 289
million of other special charges.

The
234 million of additions to the restructuring reserve included employee
severance costs of 129 million and plant and office closure costs of
105 million. Employee severance costs consisted primarily of 42
million for the streamlining of chemical production and administrative positions
in the United States, Germany and Singapore, 28 million for administrative
and production positions at Ticona in the United States and Germany, 22
million for the restructuring of production and administrative positions in
Mexico, 8 million for the closure of the acetic acid, pentaerythritol and
vinyl acetate monomer units and the elimination of administrative positions in
Edmonton, 7 million for the elimination of corporate administrative
positions, 6 million resulting from the closure of a chemical research and
development center in the United States, 5 million for the shut-down of
acetate filament production at Lanaken, Belgium and 11 million for the
shut-down of acetate filament production at Rock Hill, South Carolina.

The
105 million of additions to the restructuring reserve related to plant and
office closures consisted mainly of 74 million for fixed asset
impairments, the cancellation of supply contracts, other required
decommissioning and environmental closure costs relating to the closure of the
acetic acid, pentaerythritol and vinyl acetate monomer units in Edmonton. Also
included in plant and office closure costs were 11 million for fixed asset
impairments, contract cancellation and other costs associated with the closure
of the chemical research and development center in the United States, 4
million of fixed asset impairments and other closure costs related to the
closure of a chemical distribution terminal in the United States, 9
million for fixed asset impairments and shut-down costs at the acetate filament
facility in Lanaken, 6 million for equipment shutdown and other
decommissioning costs for the acetate filament production facility at Rock Hill
and 1 million associated with the cancellation of a lease associated with
the closure of an administrative facility in Germany.

In
2001, the Focus and Forward initiatives identified approximately 1,500 positions
to be eliminated, substantially all of which had been eliminated as of December
31, 2002.

The
19 million of favorable adjustments in 2001 of prior year restructuring
reserves consisted of a 14 million adjustment to the 2000 reserves and a
5 million adjustment to the 1999 reserves. The entire 2000 reserve
adjustment was due to lower than expected demolition and decommissioning costs
for the Acetyl Products segments production facility in Knapsack, Germany.
This adjustment resulted from a third party site partner assuming ownership of
the existing facility and obligations. Of the 1999 reserve adjustment, 3
million related to the reversal of a reserve for closure costs for a parcel of
land in Celaya, Mexico that Celanese donated to the Mexican government, which
assumed the remaining liabilities. The 1999 adjustment also included 2
million relating to less than anticipated severance costs for Ticona employees
in Germany.

The
other special charges of 289 million consisted of the Chemical
Intermediates segments goodwill impairment of 243 million and fixed
asset impairments of 57 million, the Acetyl Products segments fixed
asset impairments of 18 million and 6 million for the relocation of
acetate filament production assets associated with restructuring initiatives.

46

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Also
included in other special charges was 31 million of income from the
receipt of higher than expected insurance reimbursements linked to the plumbing
cases (see Note 24 to the Consolidated Financial Statements) and 4 million
of income related to a net reduction in reserves associated with settlements of
environmental indemnification and other obligations associated with former
Hoechst entities.

Foreign
Exchange Gain

Foreign
exchange gain increased to 5 million in 2002 from 2 million in 2001. This
change is primarily attributable to the weakening of the Mexican peso against the U.S.
dollar as well as the weakening of the U.S. dollar against the euro.

Operating
Profit (Loss)

An
operating profit of 155 million was generated in 2002 compared to a loss
of 488 million in 2001 primarily due to a decrease in special charges from
496 million in 2001 to income of 1 million in 2002. Also
contributing to the profit improvement were lower raw material and energy costs
in most segments, cost reductions throughout Celanese and improved volumes. The
profit increase was partially offset by the unfavorable effect of lower selling
prices. Lower amortization expense of 77 million resulting from the
adoption of SFAS No. 142 also had a positive effect in 2002.

EBITDA
excluding special charges totaled 440 million in 2002 compared to
398 million in 2001. EBITDA excluding special charges as a percentage of
sales increased to 10.2% in 2002 from 8.3% in 2001.

Equity
in Net Earnings of Affiliates

Equity
in net earnings of affiliates increased to 22 million in 2002 from
13 million in 2001. This increase was partially attributable to an
increase in the earnings of Korea Engineering Plastics Co. Ltd. Lower goodwill
amortization expense of 6 million due to the adoption of SFAS No. 142 also
had a positive effect on 2002 results.

Interest
Expense

Interest
expense decreased by 26% to 59 million in 2002 from 80 million in
2001, as a result of lower average financial debt and lower interest rates.

Interest
and Other Income, Net

Interest
and other income, net decreased to 48 million in 2002 from 65
million in 2001, mainly due to lower dividend income from our investments,
primarily from our methanol joint venture in Saudi Arabia, writedown of
investments and lower interest income partially offset by higher transaction
gains on foreign currency financing. Additionally, in 2001, Celanese received
gross proceeds of 10 million and recorded a gain of 6 million
relating to the sale of its ownership interests in InfraServ GmbH & Co.
Münchsmünster KG, Hoechst Service Gastronomie GmbH, and Covion Organic
Semiconducters GmbH. Investments accounted for under the cost method contributed
dividend income of 41 million and 52 million in 2002 and 2001.

Income
Taxes

In
2002, Celanese recognized income tax expense of 53 million as compared to
an income tax benefit of 126 million in 2001. Celanese also recognized in
2002 a 43 million German tax benefit relating to a tax deductible
writedown of its investment in Trespaphan GmbH. This tax benefit is attributable
to a discontinued business and is therefore reported as part of discontinued
operations and is not included in the 2002 income tax provision.

The
effective tax rate for Celanese in 2002 was 32 percent compared to 26 percent in
2001. The Celanese effective tax rate in 2002 was favorably affected by the
utilization of certain net operating loss carryforwards in Germany, the release
of certain valuation allowances on prior years deferred tax assets,
unrepatriated low-taxed earnings and a lower effective minimum tax burden in
Mexico. The effective tax rate was unfavorably affected in 2002 by distributions
of taxable dividends from certain equity investments and the reversal of a tax
deductible writedown in 2000 of a German investment.

47

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In
2001, Celanese recognized an income tax benefit of 126 million and
reported an effective tax rate of 26 percent. The effective tax rate in 2001 was
favorably affected by the full recognition of previously reserved deferred tax
assets of a subsidiary in Germany, the utilization of net operating loss
carryforwards, offset by non-deductible goodwill amortization and impairment
charges.

Discontinued
Operations for the Years Ended December 31, 2002, 2001 and 2000

In
December 2002, Celanese completed the sale of Trespaphan, its OPP film business,
to a consortium consisting of the Dor-Moplefan Group and Bain Capital, Inc. The
preliminary purchase price for the business was 209 million. Net of the
purchase price adjustments of 19 million and the repayment of 78
million in intercompany debt that Trespaphan owed Celanese AG, Celanese received
net proceeds of 112 million. Trespaphan was formerly part of
Celaneses Performance Products segment. The transaction is reflected as a
component of discontinued operations in the consolidated financial statements in
accordance with SFAS No. 144.

During
2002, Celanese sold its global allylamines and U.S. alkylamines businesses to U.S. Amines
Ltd. This business was formerly part of Celanese's Chemical Intermediates
segment.

In
2002, Celanese received net proceeds of 123 million and recorded a pre-tax
gain of 14 million on the disposal of discontinued operations relating to
these divestitures. Pre-tax earnings from operations of discontinued operations
in 2002 were 1 million.

Additionally,
Celanese recognized a tax benefit of 40 million for discontinued
operations, which includes a tax benefit associated with a tax deductible
writedown of the tax basis for Trespaphans subsidiary in Germany relating
to tax years ended December 31, 2000 and 2001. Since this tax benefit relates to
an entity solely engaged in a business designated as discontinued operations in
the 2002 Consolidated Financial Statements, this tax benefit has been
correspondingly included in earnings (loss) from discontinued operations.
Relating to these divestitures, Celanese adjusted 2001 and 2000 earnings by
reclassifying pre-tax losses of 40 million and 3 million,
respectively, into earnings (loss) from operations of discontinued operations
relating to these divestitures. Additionally, Celanese recognized tax benefits
of 10 million and 4 million in 2001 and 2000, respectively, for
discontinued operations related to these divestitures.

In
2001, Celanese completed the sale of NADIR filtration GmbH, formerly Celgard
GmbH, received minimal proceeds from this sale and recorded a 2 million
pre-tax gain on disposal of discontinued operations. Celanese recorded an
additional gain in 2001 of 12 million in pre-tax gain on disposal of
discontinued operations related to a business divested in 2000. Additionally,
Celanese recognized a tax expense of 5 million for discontinued
operations.

In
2000, Celanese completed the sale of Vinnolit Kunstoff GmbH, Vintron GmbH and
the phosphorous and phosphorous derivatives business conducted by the Thermphos
Group. Celanese received gross proceeds of 35 million from the sales of
these discontinued operations, which led to a net cash inflow in 2000 of
30 million from the 2000 divestitures and additional cash inflow of
60 million from the 1999 divestitures.

Celanese
recorded 31 million, pre-tax, in earnings (loss) from operation of
discontinued operations (including gain on disposal of discontinued operations
of 28 million) relating to these divestitures in 2000. Celanese also
recorded 9 million of additional pre-tax losses incurred in 2000 relating
to other discontinued operations sold in 1999 in gain on disposal of
discontinued operations. Celanese recognized a tax expense of 19 million
for these discontinued operations in 2000.

48

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The
following table summarizes the results of the discontinued operations for the
years ended December 31, 2002, 2001 and 2000.

|                                                  | Sales |     | OperatingProfit (Loss) |    
|------------------------------------------------- | ----- | --- | ---------------------- | ---
|
|
|Discontinued operations of Chemical Intermediates |       | 34  |                        | 39 
|Discontinued operations of Performance Products   |       | 273 |                        | 281
|Discontinued operations of Other Activities       |       |    |                        |   
|                                                  |       |     |                        |    
|Total discontinued operations                     |       | 307 |                        | 320
|                                                  |       |     |                        |    

Cumulative
Effect of Changes in Accounting Principles

Celanese
recorded income of 19 million for a cumulative effect of changes in
accounting principles, net of tax of 5 million, in 2002. The adoption of
SFAS No. 142 in 2002 resulted in income of 10 million as it required
unamortized negative goodwill (excess of fair value over cost) on the balance
sheet to be written off immediately and classified as a cumulative effect of
change in accounting principle in the consolidated statement of operations.
Additionally, in 2002 Celanese changed the actuarial measurement date for its
U.S. pension and other postretirement benefit plans from September 30 to
December 31. As this change was accounted for as a change in accounting
principle, a cumulative effect adjustment of 9 million income, net of
taxes of 5 million, was recorded in 2002.

Net
Earnings (Loss)

As
a result of the factors mentioned above, the net earnings (loss) of Celanese
increased by 572 million to net earnings of 187 million in 2002 from
a net loss of 385 million in 2001.

### Summary
by Business Segment  2001 Compared with 2000

Acetyl
Products

Net
sales for the Acetyl Products segment increased by 2% to 2,155 million in
2001 from 2,106 million in 2000 primarily due to the acquisition of the
PVOH business in September 2000 (+3%) and favorable currency effects (+2%),
largely offset by lower volumes (-2%) and pricing (-1%). Selling prices followed
the trends of hydrocarbon costs, primarily natural gas and ethylene, which
continued an upward pattern through the first quarter of 2001 but declined
throughout the remainder of the year. Lower demand amid the weakening economic
environment during the second half of 2001 accelerated the decrease in selling
prices to levels below those of the comparable period in 2000. Reduced demand
for acetic acid and vinyl acetate monomer resulted in lower volumes, which were
partially offset by higher volumes in acetate esters, particularly in North
America and Asia. Celanese was able to produce higher volumes of acetate esters
in 2001 as the acetic acid plant in Singapore became fully operational.

The
Acetyl Products segment recorded special charges of 125 million in 2001
compared to 68 million in 2000. These 2001 special charges were largely
taken to reduce costs and increase operational efficiency by closing high-cost
production facilities and streamlining administrative and operational functions
under the Focus and Forward initiatives as well as other
programs. See Summary of Consolidated Results  2001 Compared to 2000
 Special Charges.

The
2001 special charges related to 2001 restructuring initiatives of 121
million and fixed asset impairments of 18 million relating to the acetyl
derivatives and polyols business line. These special charges were offset by a
14 million favorable adjustment to prior year restructuring activities.
The 121 million in restructuring initiatives included 78 million for
the shutdown of the acetic acid, pentaerythritol, and vinyl acetate monomer
units in Edmonton, Alberta and 43 million relating primarily to employee
severance costs at plant and administrative offices as well as closure costs
associated with a research and development center in the United States. The
closure of the research and development center resulted from the decision to
relocate the functions to production sites. The 18 million fixed asset
impairment related to a reassessment of the expected long-term value of the
polyols product line. The 14 million favorable adjustment related to lower
than expected demolition and decommissioning costs associated with the closure
of the Knapsack, Germany site in 2000. This adjustment resulted from a third
party site

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partner assuming ownership of the existing facilities and obligations. In 2000, the Acetyl
Products segment recorded special charges of 68 million, which included 53
million for the closure of acetyl units in Knapsack, Germany. The remaining 15
million was primarily associated with employee severance costs from restructuring at an
administrative office and a production facility in Texas.

The
operating loss for the Acetyl Products segment increased to 73 million in
2001 from 10 million in 2000. The increase in operating loss in 2001
resulted primarily from the special charges described above and from margin
pressure, as selling prices declined at a greater rate than raw material costs.
This was partially offset by the benefits of aggressive cost reduction efforts.
In addition, 2001 was positively affected by the receipt of non-recurring
compensation payments associated with operational problems experienced by the
carbon monoxide supplier to Celaneses Singapore facility from July 2000
through May 2001. Total compensation payments, related to the carbon monoxide
supplier, received in 2001 were 43 million, of which 4 million was
recognized in 2000.

EBITDA
excluding special charges for the Acetyl Products segment increased by 8
million to 208 million in 2001 as compared to 200 million in 2000.

Chemical
Intermediates

Net
sales for the Chemical Intermediates segment decreased by 3% to 1,020
million in 2001 from 1,048 million in 2000, primarily due to price
decreases (-5%) and favorable currency movements (+2%). For 2001, sales prices
were lower than 2000 in most products, including acrylic acid, butanol, butyl
acrylate and 2-ethyl hexanol, due to global industry capacity outpacing market
growth and the pass through of falling raw material costs, primarily propylene.
Volumes in the Chemical Intermediates segment were higher with increases in the
oxo business line and specialty business line offset by decreases in the
acrylates business line. The oxo business line volume improvement resulted from
temporary market shortages in Asia. In the acrylates business line, difficult
business conditions persisted due to continuing price pressure and customer
consolidation.

In
2001, the Chemical Intermediates segment recorded special charges of 328
million. These special charges largely resulted from the impairment of most of
the segments goodwill and a portion of its fixed assets, due to a
reassessment in the expected long-term value of the segments underlying
businesses. Special charges were also taken to reduce costs and increase
operational efficiency by streamlining administrative and operational functions
under the Focus and Forward initiatives as well as other
programs. See Summary of Consolidated Results  2001 Compared to 2000
 Special Charges.

Of
the 328 million in special charges, 243 million related to goodwill
impairments and 63 million to fixed asset impairments resulting primarily
from the deterioration in the outlook of the acrylates and oxo business lines.
The remaining 28 million related to restructuring initiatives, primarily
for employee severance costs at both plant and administrative sites. These
charges were partially offset by recoveries due to Celanese of 6 million
from third party site partners. In 2000, the Chemical Intermediates segment
recorded special charges of 2 million, primarily related to administrative
restructuring.

The
operating loss for the Chemical Intermediates segment increased to 374
million in 2001 from 20 million in 2000. This was primarily due to the
special charges previously discussed and higher costs due to plant turnarounds
and outages. Additionally, performance of the acrylates business line was
negatively affected by unfavorable pricing under an existing supply agreement.
Early in the first quarter of 2002, a sharp decline in selling prices in the
acrylates business line occurred as a result of weak market conditions and low
utilization rates. As a result, the business outlook for the acrylates business
line has deteriorated.

EBITDA
excluding special charges for the Chemical Intermediates segment decreased to
30 million in 2001 from 48 million in the comparable period.

Acetate
Products

Net
sales for the Acetate Products segment increased by 1% to 762 million in
2001 from 756 million in 2000. Favorable currency movements (+3%), and
slightly higher sales volumes (+1%), were largely offset by a change in the
composition of the segment due to the transfer of the high performance polymer
(polybenzimidazole or PBI) and Vectran® polymer fiber product lines to
Other Activities in July 2000 (-2%), and lower average pricing (-1%). Average
acetate prices declined slightly due to changes in the product mix from higher
priced filament to lower priced tow. Higher volumes for tow, reflecting
increased demand in Europe, were mostly offset by the continuing

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decline in volumes for filament, primarily caused by the effects of the weakening U.S.
economy, the shift in fashion away from filament-based products and increased competition
in Asia.

Special
charges in the Acetate Products segment amounted to 50 million in 2001 as
compared to 8 million in 2000. The special charges were a continuation of
the ongoing strategy to improve cost efficiency and align capacity with market
demand. See Summary of Consolidated Results  2001 Compared to 2000
 Special Charges. The charges in 2001 were for the costs associated
with the closure of acetate filament operations in Rock Hill, South Carolina and
Lanaken, Belgium, as well as costs incurred with the relocation of filament
operations within the United States. Additional special charges were incurred in
connection with employee severance costs at its production facility in Mexico.
The net charge in 2000 represented employee severance costs associated with
downsizing across the business as well as relocation costs incurred by moving
acetate filament equipment within North America.

Acetate
Products recorded an operating loss of 32 million in 2001, compared with
an operating profit of 9 million in 2000. Higher special charges,
weakening filament volumes, and higher energy costs, primarily for coal, were
partially offset by continued cost reductions at all locations.

EBITDA
excluding special charges for the Acetate Products segment of 91 million
in 2001 decreased slightly from 92 million in 2000.

Technical
Polymers Ticona

Net
sales for the Ticona segment decreased by 16% to 773 million in 2001 from
923 million in 2000 largely as the result of lower volumes (-18%), as
prices (+1%) and currency movements (+1%) remained relatively unchanged. Volumes
declined in many products, including liquid crystal polymers, polyesters and
polyacetals, due to lower demand, particularly from the global
telecommunications and U.S. automotive industries. Sales volumes to the global
telecommunications industry declined sharply, particularly during the second
half of 2001, as customers depleted their inventory levels in response to lower
end user demand. In addition, European sales weakened during the fourth quarter,
due to reduced demand in industrial markets and a weakening of automotive
exports. Average prices increased slightly as a result of a more favorable
product sales mix, but came under pressure in the second half as a result of
industry overcapacity and imports of standard grade polyacetal from Asia.

In
special charges, the Ticona segment had income of 9 million in 2001
compared to income of 29 million in 2000. The income in 2001 resulted from
31 million of higher than expected insurance reimbursements associated
with the plumbing cases, which was largely offset by restructuring expenses for
employee severance costs in the United States and Europe. These restructuring
initiatives were taken to streamline administrative and operational functions
under the Forward initiative. See Summary of Consolidated Results 
2001 Compared to 2000  Special Charges. The favorable adjustment
recognized in 2000 was primarily due to 18 million of higher than expected
insurance reimbursements associated with the plumbing cases. In addition, an
unfavorable tax treatment affected the severance benefits to be received by
employees in Germany. Therefore, Celanese modified the timing of payments
associated with the 1999 restructuring plan, which resulted in a 10
million favorable adjustment in 2000.

Ticona
recorded an operating loss of 15 million in 2001 compared to a profit of
96 million in 2000 due to lower volumes, higher raw material and energy
costs, and lower income from special charges, which were slightly offset by the
benefits of cost reduction efforts. Due to decreased demand from customers who
were depleting their inventory, Ticona temporarily reduced production levels,
which resulted in higher unit costs.

EBITDA
excluding special charges declined to 52 million in 2001 compared to
140 million in 2000.

Performance
Products

Net
sales for the Performance Products segment, which consists of the Nutrinova food
ingredients business, increased by 28% to 159 million in 2001 from
124 million in 2000 largely as the result of higher volumes (27%), as
prices remained relatively unchanged (1%). The increase in volumes was driven by
higher demand for the high intensity sweetener Sunett® from the beverage
and confectionary industries in the United States. Prices declined due to
increased volumes to Sunett customers and continued pressure on
sorbates pricing due to worldwide overcapacity.

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Operating
profit for the Performance Products segment of 44 million in 2001 improved
from 33 million in 2000 mainly as a result of increased market growth of
Sunett® as noted above.

EBITDA
excluding special charges for the Performance Products segment increased by
10 million to 50 million in 2001 from 40 million in 2000.

Other
Activities

In
the second quarter of 2000, Celanese acquired 100% of Axiva GmbH, which was
renamed Celanese Ventures GmbH, a process technology and engineering business,
from Aventis S.A. In the fourth quarter of 2000, Celanese sold 75% of the
process technology and engineering business of Axiva GmbH to Siemens and
retained selected projects, which it continues to operate in the process
technology entity which was renamed to Celanese Ventures GmbH.

Effective
July 1, 2000, the PBI and Vectran® product lines were transferred from the
Acetate Products segment to Other Activities to reflect the strategic alignment
of PBI with the fuel cell project of Celanese Ventures GmbH.

Net
sales for Other Activities remained relatively flat at 83 million and
84 million in 2001 and 2000, respectively, as increased sales due
primarily to the full year contribution of PBI were offset by a decrease in
third party sales by Celaneses captive insurance companies.

In
special charges, Other Activities recorded an expense of 2 million in 2001
as compared to income of 28 million in 2000. The 2 million expense
primarily consists of corporate employee severance costs, which were partially
offset by a 4 million favorable adjustment related to a net reduction in
reserves associated with settlements of environmental indemnification and other
obligations associated with former Hoechst entities. Other Activities recognized
a 28 million favorable adjustment to special charges in 2000, primarily
associated with a restructuring reserve recorded in 1999. The reserve was
adjusted due to the earlier than expected disposal of the lease obligations for
former administrative facilities.

The
operating loss of Other Activities increased to 38 million in 2001 from
21 million in 2000. The increase resulted primarily from the net effect of
special charges as discussed above partially offset by increased income
generated by the full year contribution of the PBI and Vectran product lines.

EBITDA
excluding special charges for Other Activities improved to a loss of 33
million in 2001 from a loss of 56 million in 2000.

### Summary
of Consolidated Results  2001 Compared with 2000

Net
Sales

Net
sales decreased by 2% to 4,777 million in 2001 as compared to 4,885
million in 2000 primarily as a result of lower volumes and lower selling prices,
partially offset by favorable currency movements. Slight increases in the Acetyl
Products, Acetate Products and Performance Products segments were more than
offset by decreases in the Technical Polymers Ticona and Chemical Intermediates
segments. Ticonas sales fell sharply as the result of a significant
decline in volumes.

Cost
of Sales

Cost
of sales decreased by 1% to 4,132 million in 2001 compared with
4,155 million in 2000. Cost of sales as a percentage of net sales
increased to 86% in 2001 from 85% in 2000, reflecting higher raw material and
energy costs and lower capacity utilization, primarily in Ticona.

Selling,
General and Administrative Expenses

Selling,
general and administrative expenses increased by 2% to 552 million in 2001
from 541 million in 2000 driven largely by currency effects and increased
selling, general and administrative costs associated with the newly acquired
PVOH business and increased selling efforts in food ingredients. Selling,
general and administrative expenses as a percentage of sales remained flat at
11% in both 2001 and 2000. In 2001, Celanese had favorable adjustments of
12 million relating to a reduction in environmental reserves due to
favorable trends

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in environmental remediation, lower eBusiness spending as compared to 2000 and positive
effects of cost reduction programs throughout the entire company. In 2000, Celanese
received a 17 million insurance settlement related to environmental claims.

Research
and Development Expenses

Research
and development expenses remained flat at 87 million in both 2001 and
2000. Research and development expenses as a percentage of sales also remained
flat at 2% for both 2001 and 2000.

Special
Charges

In
2001, Celanese recorded special charges totaling 496 million, which
consisted of 234 million of restructuring charges, which were reduced by
8 million of income for reimbursements from third party site partners and
income from forfeited pension plan assets, 19 million of favorable
adjustments to restructuring reserves recorded in 2000 and 2001 and 289
million of other special charges.

The
234 million of additions to the restructuring reserve included employee
severance costs of 129 million and plant and office closure costs of
105 million. Employee severance costs consisted primarily of 42
million for the streamlining of chemical production and administrative positions
in the United States, Germany and Singapore, 28 million for administrative
and production positions at Ticona in the United States and Germany, 22
million for the restructuring of production and administrative positions in
Mexico, 8 million for the closure of the acetic acid, pentaerythritol and
vinyl acetate monomer units and the elimination of administrative positions in
Edmonton, 7 million for the elimination of corporate administrative
positions, 6 million resulting from the closure of a chemical research and
development center in the United States, 5 million for the shut-down of
acetate filament production at Lanaken, Belgium and 11 million for the
shut-down of acetate filament production at Rock Hill, South Carolina.

The
105 million of additions to the restructuring reserve related to plant and
office closures consisted mainly of 74 million for fixed asset
impairments, the cancellation of supply contracts, other required
decommissioning and environmental closure costs relating to the closure of the
acetic acid, pentaerythritol and vinyl acetate monomer units in Edmonton. Also
included in plant and office closure costs were 11 million for fixed asset
impairments, contract cancellation and other costs associated with the closure
of the chemical research and development center in the United States, 4
million of fixed asset impairments and other closure costs related to the
closure of a chemical distribution terminal in the United States, 9
million for fixed asset impairments and shut-down costs at the acetate filament
facility in Lanaken, 6 million for equipment shutdown and other
decommissioning costs for the acetate filament production facility at Rock Hill
and 1 million associated with the cancellation of a lease associated with
the closure of an administrative facility in Germany.

The
19 million of favorable adjustments in 2001 of prior year restructuring
reserves consisted of a 14 million adjustment to the 2000 reserves and a
5 million adjustment to the 1999 reserves. The entire 2000 reserve
adjustment was due to lower than expected demolition and decommissioning costs
for the Acetyl Products segments production facility in Knapsack, Germany.
This adjustment resulted from a third party site partner assuming ownership of
the existing facility and obligations. Of the 1999 adjustment, 3 million
related to the reversal of a reserve for closure costs for a parcel of land in
Celaya, Mexico that Celanese donated to the Mexican government, which assumed
the remaining liabilities. The 1999 adjustment also included 2 million
relating to less than anticipated severance costs for Ticona employees in
Germany.

The
other special charges of 289 million in 2001 consisted of Chemical
Intermediates segment goodwill impairment of 243 million and fixed asset
impairments of 57 million, Acetyl Products segment fixed asset impairments
of 18 million and 6 million for the relocation of acetate filament
production assets associated with restructuring initiatives.

Also
included in other special charges was 31 million of income from the
receipt of higher than expected insurance reimbursements linked to the plumbing
cases (see Note 24 to the Consolidated Financial Statements) and 4 million
of income related to a net reduction in reserves associated with settlements of
environmental indemnification and other obligations associated with former
Hoechst entities.

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In
2000, Celanese recorded special charges totaling 21 million, which
consisted of 95 million of additions to the restructuring reserve,
59 million of favorable adjustments to restructuring reserves recorded in
1999, 3 million of costs for the relocation of production assets
associated with restructuring initiatives, and 18 million of income from
the receipt of higher than expected insurance reimbursements linked to the
plumbing cases. (See Note 24 to the Consolidated Financial Statements.)

The
95 million of restructuring charges in 2000 included employee severance
costs of 44 million and plant and office closure costs of 51
million. Employee severance costs of 31 million related mainly to the
reduction of approximately 170 positions at two U.S. chemical facilities and the
closure of a European Acetyl Products plant. Additionally, severance costs of
11 million were associated with the planned reduction of approximately 115
positions in the Acetate Products business. The plant and office closure charges
of 51 million consisted mainly of contractual obligations and asset
impairments for the closure of an Acetyl Products plant in Europe (47
million). Annual cost savings from all of the 2000 restructuring initiatives are
estimated to be in excess of 35 million upon completion of these
initiatives.

The
2000 restructuring initiatives identified approximately 300 positions to be
eliminated, all of which had been eliminated as of December 31, 2001.

The
59 million of favorable adjustments in 2000 to the 1999 restructuring
reserves consisted of employee termination benefits (24 million) and plant
and office closures (35 million). Employee termination benefits were
adjusted by 11 million due largely to unplanned voluntary resignations and
by 10 million due to a modification in Ticonas employee severance
plan resulting from an unfavorable tax treatment which affected the severance
benefits to be received by our employees in Germany. In addition, a delay in the
scheduled closure of a U.S. acetate filament production facility led to a net
adjustment of 3 million in restructuring reserves. This facility was
closed in 2001. The adjustments associated with plant and office closures
resulted mainly from the earlier than expected disposals of lease obligations of
former administrative facilities in the U.S. and Canada (28 million). As a
result of the need for additional office space due to the acquisition of PVOH,
Celanese cancelled previous plans to rationalize the U.S. chemical
administrative building (4 million). The closure costs of a Canadian
acetate filament facility were lower than estimated (3 million).

Non-restructuring
special charges of 3 million in 2000 were related to the cost of
transferring acetate filament equipment within North America resulting from
restructuring initiatives.

Foreign
Exchange Gain

Foreign
exchange gain decreased to a gain of 2 million in 2001 from a gain of
5 million in 2000. This change is primarily attributable to the
fluctuation of the U.S. dollar against the euro.

Operating
Profit (Loss)

An
operating loss of 488 million was incurred in 2001 compared to a profit of
87 million in 2000. The main reason for this change was the increase in
special charges, which increased from 21 million in 2000 to 496
million in 2001. The effects of lower volumes, mainly at Ticona, and higher raw
material and energy costs, throughout the segments, also contributed to the
decrease.

EBITDA
excluding special charges totaled 398 million in 2001 compared to
464 million in 2000.

Equity
in Net Earnings of Affiliates

Equity
in net earnings of affiliates decreased to 13 million in 2001 from 19 million
in 2000. This decrease was mainly  attributable to decreased earnings from Polyplastics
Co. Ltd., which was affected by a weak Asian economy.

Interest
Expense

Interest
expense increased by 8% to 80 million in 2001 from 74 million in
2000, mainly as a result of interest associated with the time value of call
options and lower capitalization of interest in 2001 as compared to 2000
resulting primarily from the completed construction of Celaneses plant in
Singapore, partially offset by a lower average debt level in 2001 compared to
2000.

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Interest
and Other Income, Net

Interest
and other income, net decreased to 65 million in 2001 from 110
million in 2000, mainly due to lower transaction gains on foreign currency
financing, write-offs of certain investments, including eBusiness interests, and
lower interest income, partially offset by higher dividend income from our
investments in Saudi Arabia and China. In 2001, Celanese received gross proceeds
of 10 million and recorded a gain of 6 million relating to the sale
of its ownership interests in InfraServ GmbH & Co. Münchsmünster
KG, Hoechst Service Gastronomie GmbH, and Covion Organic Semiconducters GmbH.

Income
Taxes

In
2001, Celanese recognized an income tax benefit of 126 million as compared
to a provision of 88 million in 2000. The effective tax rate was 26% in
2001 as compared to 62% in 2000. The effective tax rate in 2001 was favorably
affected by the full recognition of previously reserved deferred tax assets of a
subsidiary in Germany, the utilization of certain net operating loss
carryforwards, offset by non-deductible goodwill amortization and impairment
charges.

Net
Earnings  (Loss)

As
a result of the factors mentioned above, the net earnings (loss) of Celanese
decreased by 443 million to a net loss of 385 million in 2001 from
net earnings of 58 million in 2000.

### Liquidity
and Capital Resources

Cash
Flows

Net
Cash Provided by Operating Activities

Net
cash provided by operating activities was 387 million, 522
million, and 48 million for the years ended December 31, 2002, 2001 and
2000, respectively.

The
decrease in net cash provided by operating activities of 135 million in
2002 as compared to 2001 is primarily due to changes in cash generated by trade
working capital. In 2002, trade working capital increased slightly due to an
increase in trade receivables resulting from higher sales in the fourth quarter
of 2002 as compared to the fourth quarter in 2001, which was partially offset by
lower inventory and increased trade accounts payable. In 2001, cash generated by
trade working capital improvements, related to the Project Focus initiatives,
was 325 million. Partially offsetting this trade working capital effect
was a reduction in the cash outflow for special charges of 34 million, a
lower pension contribution to our U.S. Qualified Pension Plan of 101
million in 2002 compared to 161 million in 2001 and an increase in
dividends from equity investments of 48 million.

The
increase in net cash provided by operating activities of 474 million in
2001 as compared to 2000 was primarily attributable to a decrease in the net
cash outflow for special charges of 261 million and an increase in the
cash generated through a reduction in trade working capital of 174
million. The trade working capital improvement resulted from initiatives
chartered under Project Focus, which substantially exceeded the
target of reducing trade working capital by 100 million. Trade working
capital was reduced from 902 million at the end of 2000 to 605
million at the end of 2001, the lowest level since the demerger. The special
charges of 496 million recorded in 2001 included 309 million of
non-cash items and net cash items amounting to 187 million. Cash provided
by operating activities was affected by weaker operating results and the funding
of pension obligations in 2001.

Net
Cash Used in Investing Activities

Net
cash used in investing activities was 150 million, 121 million and
489 million for the years ended December 31, 2002, 2001 and 2000,
respectively.

The increase in cash outflows of 29 million in 2002
compared to 2001 is mainly due to a 125 million cash outflow for the fourth quarter
purchase of the net assets of the Emulsions business, which, including liabilities
assumed, was valued at 147 million. Additionally, a net outflow of 18 million
for the purchase of marketable

55

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securities in 2002 compared to a
net inflow of 50 million on the sale of marketable securities in 2001 and an outflow
of 25 million related to a long-term raw material supply contract increased the cash
used compared to the prior year. Partially offsetting these effects were 201 million
in proceeds from the disposal of discontinued operations in 2002 as compared to 38
million in 2001 and 41 million in distributions from investments in InfraServ
companies. Capital expenditures in 2002 remained consistent with 2001 spending
levels.

Capital
expenditures on property, plant and equipment remained relatively flat at
218 million in 2002, compared to 217 million in 2001. The spending
in 2002 included the start of construction on a new production facility for
synthesisgas, a primary raw material at the Oberhausen site in Germany. The new
plant is scheduled to come on stream in the second half of 2003. In addition,
major projects included the completion of the new GUR® plant at the Bishop,
Texas facility and the capacity expansion for Vectra® at Shelby, North
Carolina. The Vectra expansion is needed to supply the projected long-term
demand of the telecommunications industry and to develop and grow emerging
markets.

Net
cash used in investing activities amounted to 121 million in 2001 compared
to 489 million in 2000. The decrease in cash outflows of 368 million
was primarily a result of outflows relating to the PVOH (359 million) and
Axiva GmbH (38 million) acquisitions in 2000 partially offset by lower
proceeds from the disposal of discontinued operations in 2001. In 2001, capital
expenditures of 217 million were partially offset by other proceeds of
58 million from the collection of a note related to the sale of a business
divested in 1999 and other proceeds from the disposition of assets. In addition,
net proceeds from the purchases and sales of marketable securities resulted in a
net cash inflow of 50 million in 2001.

Capital
expenditures on property, plant and equipment decreased slightly to 217
million in 2001, as compared to 218 million in 2000. Celanese achieved the
financial target under its Focus initiative to limit capital
expenditures so as not to exceed the 2000 level. Celanese made focused capital
investments which included the ongoing construction of the new GUR plant
at the Bishop, Texas facility and a major capacity expansion for Vectra at
Shelby, North Carolina.

Net
Cash Provided by (Used in) Financing Activities

Net
cash provided by (used in) financing activities was (156) million,
(376) million and 77 million for the years ended December 31, 2002,
2001 and 2000, respectively.

The
net cash used in financing activities in 2002 is primarily due to debt
repayments aggregating 150 million (see Short-term and Long-term
Borrowings). In addition, Celanese repurchased 284,798 of its shares, to
be held in treasury, for approximately 6 million.

Net
cash used in financing activities amounted to 376 million in 2001 compared
to a cash inflow of 77 million in 2000. The net cash used in financing
activities in 2001 was primarily due to debt repayments aggregating 356
million (see Short-term and Long-term Borrowings). In addition,
Celanese paid a cash dividend of 20 million, 0.40 per share, in
2001.

Liquidity

Cash
generated from divestitures and operating activities in 2002 was primarily used
to repay debt, to fund pension obligations and to fund capital expenditures and
acquisitions. In addition, net current assets (defined as total current assets,
less total current liabilities) excluding assets and liabilities of discontinued
operations increased to a net current asset position of 37 million in 2002
from a net current liability position of 262 million in 2001.

As
of December 31, 2002, Celanese had 615 million of total debt, of which
195 million is due in 2003. We expect that our primary source of liquidity
for 2003 will be cash from operations. In the event of a significant decrease in
customer demand for our products, coupled with prolonged unfavorable industry
conditions, cash generated from operations could be materially reduced. If
necessary, Celanese has unused credit facilities available to fund its cash flow
needs (as discussed below under Short-term and Long-term
Borrowings). In addition, Celanese has in place an asset securitization
program which allows participating operating subsidiaries to sell up to U.S.
$120 million of eligible U.S. trade receivables, through a consolidated
special-purpose entity, as long as the performance of the receivable portfolio
meets certain ratios and Celanese maintains an investment grade debt rating.

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As of December 31, 2002, Celanese was in compliance with the required ratios under the
program. There were no outstanding sales of receivables under this program as of December
31, 2002 and December 31, 2001. Average monthly proceeds from collections reinvested in
the continuous sale program were approximately U.S. $47 million in 2002. Celanese has no
other similar arrangements with special purpose entities.

Based
on Celaneses current financial situation and current industry conditions,
we believe the funding available from operations, committed credit facilities
and the asset securitization program will be sufficient to satisfy our capital
expenditures, investments and working capital requirements for the foreseeable
future.

At
December 31, 2002, Celanese had fixed contractual cash obligations as follows:

|Fixed Contractual Cash Obligations |  | Total |       | Less than1 Year |  | 13Years |     | 45Years |  | After5 Years
|---------------------------------- |  | ----- | ----- | --------------- |  | -------- | --- | -------- |  | ------------
|
|Total Debt                         |  |       | 615   |                 |  |          | 195 |          |  |             
|of which Capital Lease Obligations |  |       | 13    |                 |  |          | 3   |          |  |             
|Operating Leases                   |  |       | 316   |                 |  |          | 48  |          |  |             
|Unconditional Purchase Obligations |  |       | 1,092 |                 |  |          | 175 |          |  |             
|Other Contractual Obligations      |  |       | 36    |                 |  |          | 30  |          |  |             
|                                   |  |       |       |                 |  |          |     |          |  |             
|Fixed Contractual Cash Obligations |  |       | 2,059 |                 |  |          | 448 |          |  |             
|                                   |  |       |       |                 |  |          |     |          |  |             

Unconditional
Purchase Obligations include take or pay contracts and fixed price forward
contracts. Celanese does not expect to incur any material losses under these
contractual arrangements. In addition, these contracts may include variable
price components.

Other
Contractual Obligations includes committed capital spending and fines associated
with the U.S. antitrust settlement described in Note 24 to the Consolidated
Financial Statements.

At
December 31, 2002, Celanese has contractual guarantees and commitments as
follows:

|                                       | Expiration per period
|-------------------------------------- | ---------------------
|
|
|Financial Guarantees                   |                      
|Standby Letters of Credit              |                      
|                                       |                      
|Contractual Guarantees and Commitments |                      
|                                       |                      

Celanese
is secondarily liable under a lease agreement pursuant to which Celanese 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 January
1, 2003 to April 30, 2012 is estimated to be approximately 66 million (U.S. $69
million). Additionally, Celanese has issued a payment guarantee to a bank to
secure the repayment of a loan by Celaneses former affiliate Vintron GmbH.
Celaneses obligation under the guarantee amounts to 31 million plus
interest and additional costs. Celanese expects to be released from this
guarantee during the first quarter of 2003. Standby letters of credit of
118 million at December 31, 2002 are irrevocable obligations of an issuing
bank that ensure payment to third parties in the event that certain Celanese
subsidiaries fail to perform in accordance with specified contractual
obligations. Celanese believes the likelihood is remote that material payments
will be required under these agreements.

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At
December 31, 2002, Celanese has available sources of liquidity, net of amounts
used, as follows:

|                               | Expiration per period
|------------------------------ | ---------------------
|
|
|Unused Lines of Credit         |                      
|Asset Securitization Program   |                      
|                               |                      
|Available Sources of Liquidity |                      
|                               |                      

---

|(1) |  | Total committed lines of credit are 1,580 million, of which 339
million were utilized at December 31, 2002 (167 million for less than 1
year; 167 million for 1-3 years, and 5 million for 4-5 years).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
addition to the items noted in the tables above, Celanese expects to continue to
incur costs for the following significant obligations. Although we cannot
predict with certainty the annual spending for these matters, such matters will
affect future cash flows of Celanese.

|Other Obligations                             |  |  | 2002 ActualSpending(Receipts) |     | 2003ProjectedSpending
|--------------------------------------------- |  |  | ----------------------------- | --- | ---------------------
|
|Environmental Matters                         |  |  |                               | 102 |                      
|Pension and Other Benefits                    |  |  |                               | 185 |                      
|Special Charges, net                          |  |  |                               | 92  | (1)                  
|Plumbing Actions and Sorbates Litigation, net |  |  |                               | (28 | )                    
|                                              |  |  |                               |    
|Other Obligations                             |  |  |                               | 351 |                      
|                                              |  |  |                               |    

---

|(1) |  | Excludes insurance receipts and payments relating to plumbing actions, which are
included in Plumbing Actions and Sorbates Litigation, net below.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Payments associated with the sorbates litigation of 5 million for 2003 are
included in Fixed Contractual Cash Obligations above. The remaining
2003 spending cannot be reasonably estimated.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Environmental
Matters
| | ---------------------

| | Celaneses
worldwide environmental expenditures, including expenditures for legal  compliance,
internal environmental initiatives and remediation of active,  orphan, divested and U.S.
Superfund sites, totaled 102 million, of which  4 million was for capital
projects, in 2002 and 106 million, of  which 8 million was for capital
projects, in 2001.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | It
is anticipated that stringent environmental regulations will continue to be  imposed on
the chemical industry in general. Although Celanese cannot predict  with certainty future
environmental expenditures, especially expenditures beyond  2003, management believes
that spending will continue at the current year level.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Due
to its industrial history, Celanese has the obligation to remediate specific  areas on
its own sites as well as on divested, orphan or U.S. Superfund sites.  In addition, as
part of the demerger agreement with Hoechst, a specified  proportion of the
responsibility for environmental liabilities from a number of  pre-demerger divestitures
was transferred to Celanese. Celanese has provided for  such obligations when the event
of loss is probable and reasonably estimable.  Management believes that the environmental
costs will not have a material  adverse effect on the financial position of Celanese, but
they may have a  material adverse effect on the results of operations or cash flows in
any given  accounting period. (See Note 25 to the Consolidated Financial
Statements.)
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | Pension
and Other Benefits
| | --------------------------

| | Celaneses
funding policy for pension plans is to accumulate plan assets that, over the long run,
will approximate the present value of projected benefit obligations. In 2002 and 2001,
Celanese made pension contributions to the U.S. Qualified Pension Plan of 101
million and 161 million, respectively. Also in 2002 and 2001, payments to
Celaneses other non-qualified plans totaled 20 and 25 million,
respectively. Celanese expects to make pension contributions and cash payments of
approximately 125 million in 2003. Actual contributions in 2004 and future years may
vary based on a number of factors including prevailing interest rates and return on plan
assets.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Spending
associated with other benefit plans, primarily retiree medical, defined contribution and
long-term disability, amounted to 64 million and 73 million in 2002 and 2001,
respectively. Celanese expects spending to continue at comparable levels in 2003. (See
Note 19 to the Consolidated Financial Statements.)
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Special
Charges
| | ---------------

| | The
special charges of 1 million of income recorded in 2002 include 14  million
of income for non-cash items and net cash items amounting to 13  million. During
2002, Celanese made cash payments of approximately 5  million relating to current
year special charges and 50 million in  spending related to special charges
recorded in prior years. Celanese expects  cash outflows relating to special charges of
approximately 60 million in  2003 related to 2002 and prior year initiatives.
Celanese does not anticipate  significant payments in periods beyond 2003.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Plumbing
Actions  and Sorbates Litigation
| | -----------------------------------------

| | Celanese
is involved in a number of legal proceedings and claims incidental to the normal  conduct
of its business. During 2002, Celanese had litigation-related net cash  inflows of
approximately 28 million primarily in connection with the  plumbing actions and
sorbates litigation. At December 31, 2002, Celanese had  reserves of 111 million
for these matters. In addition, Celanese  previously recorded receivables from insurance
companies and Hoechst in  connection with the plumbing and sorbates matters. Celanese
received recoveries  of 51 million in 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Although
it is impossible at this time to determine with certainty the ultimate outcome  of these
matters, management believes, based on the advice of legal counsel,  that adequate
provisions have been made and that the ultimate outcome will not  have a material adverse
effect on the financial position of Celanese, but could  have a material adverse effect
on the results of operations or cash flows in any  given accounting period. (See Note 24
to the Consolidated Financial Statements.)
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Capital
Expenditures

Celaneses
capital expenditures were 218 million for the year ended December 31,
2002. Capital expenditures consisted primarily of capacity expansion,
investments to reduce future operating costs and environmental, health and
safety initiatives. Capital expenditures remained below depreciation levels as
Celanese continued to make selective capital investments to enhance the market
positions of its products.

Capital
expenditures were financed principally with cash from operations. Celanese
anticipates spending in 2003 to be approximately 230 million. At December
31, 2002, there were approximately 31 million of outstanding commitments
related to capital projects, which are included within the fixed contractual
cash obligations table above.

Short-term
and Long-term Borrowings

Celaneses
total debt primarily consists of bank loans, notes due affiliates, commercial
paper, term notes, and pollution control and industrial revenue bonds. The loans
are principally denominated in U.S. dollars and euro. Total debt decreased to
615 million at December 31, 2002 from 880 million at December 31,
2001. Celanese used the cash generated from divestitures and operations to repay
bank loans and notes with affiliates. Celanese had a U.S. $700 million
(667 million) commercial paper program at December 31, 2002. As of
December 31, 2002,

59

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there were no borrowings under the commercial paper program. Celanese maintains committed
backup facilities, revolving credit lines and term loans with several banks aggregating
1,580 million at December 31, 2002; the aggregate unused part thereof amounted to
1,241 million, of which U.S. $310 million (296 million) was available for use
as credit backup for Celaneses commercial paper program. These credit backup
facilities for the commercial paper program are 364 day facilities which are subject to
renew annually.

Celanese
had outstanding letters of credit amounting to 118 million at December 31,
2002 and 110 million at December 31, 2001.

Several
non-consolidated affiliates pool their excess cash with Celanese, and the excess
cash is loaned to Celanese under a revolving credit agreement. The outstanding
payables for these agreements from Celanese to its affiliates of 96
million and 240 million at December 31, 2002 and 2001, respectively, are
included within short-term borrowings and current installments of long-term
debt. Celanese expects to continue these arrangements at a comparable level in
2003, depending on the level of liquidity of the non-consolidated affiliates.

A
number of Celaneses bank loan agreements have ratio or credit rating
covenants. At December 31, 2002, Celanese was in compliance with these
covenants. Based on Celaneses financial situation, we believe that the
risk is minimal that Celanese will not be in compliance with the terms and
conditions of its loan agreements. Approximately one-third of total debt
outstanding at December 31, 2002 is subject to repayment in the case of a
specified downgrade in our credit rating. Should Celanese fail to meet the ratio
or credit rating covenants of a particular loan, we believe that Celanese has
adequate liquidity sources, as noted above, to meet its ongoing requirements.

Total
Shareholders Equity

At
December 31, 2002, shareholders ́ equity amounted to 2,005 million,
compared to 2,210 million at December 31, 2001. The decrease was primarily
attributable to the impact of foreign currency translation adjustments of
173 million and the recognition of an additional minimum liability
adjustment for pensions of 220 million due to
pension plan asset valuation losses and a reduction in the discount rate used to
calculate pension plan obligations. These reductions were partially offset by
current year net earnings.

At
December 31, 2001, shareholders ́ equity amounted to 2,210 million,
compared to 2,843 million at December 31, 2000. The decrease was primarily
attributable to the 2001 net loss and dividends, which were offset by the
positive impact of foreign currency translations. In addition, equity was
reduced by 255 million associated with the recognition of an additional
minimum liability adjustment for pensions due to pension plan asset valuation
losses and a reduction in the discount rate used to calculate pension plan
obligations. (See Note 19 to the Consolidated Financial Statements.) The 2001
net loss and dividends contributed to a retained deficit of 313 million at
December 31, 2001.

Related
to the impairment charges described in Summary of Consolidated Results 
2001 Compared with 2000  Special Charges and following a valuation
review under German GAAP, the Celanese AG parent company substantially lowered
the carrying value of certain of its consolidated subsidiaries on its statutory
books as of December 31, 2001. These charges did not affect Celaneses
consolidated results under U.S. GAAP. Under German law, dividends and share
buy-backs can only be paid for out of distributable reserves or net income (on a
parent company basis). The 2001 distributable reserves were depleted by these
charges. Lack of such reserves precluded Celanese from proposing a dividend to
its shareholders for the year 2001. For the year 2002, Celanese is recommending
a dividend of 0.44 per share to be paid in 2003, subject to
shareholders approval at Celaneses annual general meeting in April
2003. Celanese plans to repurchase shares in 2003, but will continue to evaluate
its options consistent with its overall financial priorities.

### Market
Risks

Celanese
is exposed to market risk through commercial and financial operations.
Celaneses market risk consists principally of exposure to currency
exchange rates, interest rates and commodity prices. Celanese has in place
policies of hedging against changes in currency exchange rates, interest rates
and commodity prices as described below. These contracts are accounted for under
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activitiesamended by SFAS No. 138, Accounting for Certain Derivative Instruments
and Certain Hedging Activities, which Celanese adopted on January 1, 2001.
(See Note 3 to the Consolidated Financial Statements.)

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Foreign
Exchange Risk Management

Celaneses
reporting currency is the euro. Celanese has receivables and payables
denominated in currencies other than the functional currencies of the various
subsidiaries of Celanese, which create foreign exchange risk. With the
introduction of the euro on January 1, 1999, the exposure to exchange rate
fluctuations is eliminated in relation to the euro zone countries that have
adopted the euro as their common currency, leaving the U.S. dollar, Mexican
peso, Japanese yen, British pound sterling, and Canadian dollar as the most
significant sources of currency risk. Accordingly, Celanese enters into foreign
currency forwards and options to minimize its exposure to foreign currency
fluctuations. The foreign currency contracts are designated for recognized
assets and liabilities and forecasted transactions. The terms of these contracts
are generally under one year. Celaneses centralized hedging strategy
states that foreign currency denominated receivables or liabilities booked by
the operating entities will be used to hedge the exposure on a consolidated
basis. As a result, Celaneses foreign currency forward contracts relating
to this centralized strategy did not meet the criteria of SFAS No. 133 to
qualify for hedge accounting. During the years ended December 31, 2002 and
December 31, 2001, Celanese hedged all of its dollar denominated inter-company
loans held by euro denominated entities. Therefore, there was no material net
effect from foreign exchange gains or losses in interest and other income, net.
During the year ended December 31, 2000, these contracts hedged only a portion
of Celanese dollar denominated inter-company loans held by euro denominated
entities during 2000. As a result, a net gain of approximately 30 million
from foreign exchange gains or losses was recorded to interest and other income,
net in 2000.

A
substantial portion of Celaneses assets, liabilities, revenues and
expenses is denominated in currencies other than the euro zone currencies,
principally the U.S. dollar. Fluctuations in the value of these currencies
against the euro, particularly the value of the U.S. dollar, can have, and in
the past have had, a direct and material impact on Celaneses business and
financial results. For example, a decline in the value of the U.S. dollar versus
the euro, results in a decline in the euro value of Celaneses sales
denominated in U.S. dollars and earnings due to translation effects. Likewise,
an increase in the value of the U.S. dollar versus the euro would result in an
opposite effect. Celanese estimates that the translation effects of changes in
the value of other currencies against the euro decreased net sales by
approximately 3% and increased net sales by approximately 2% in 2002 and 2001,
respectively. Celanese estimates that the translation effects of changes in the
value of other currencies against the euro decreased total assets by
approximately 12% in 2002. Celaneses exposure to transactional effects is
further reduced by a high degree of overlap between the currencies in which
sales are denominated and the currencies in which the raw material and other
costs of goods sold are denominated.

Celaneses
policy with respect to limiting its exposure to transactional effects of
variations in exchange rates is to use financial instruments that reduce such
exposure. The principal instruments used are forward exchange contracts
generally with terms of less than one year. (See Note 23 to the Consolidated
Financial Statements.)

Interest Rate
Risk Management

Celanese
enters into interest rate swap agreements to reduce the exposure of interest
rate risk inherent in Celaneses outstanding debt. Celaneses interest
rate derivative policy is to lock in borrowing rates to achieve a desired level
of fixed/floating rate debt based on market conditions. Celanese had open
interest rate swaps with a notional amount of 286 million and 340
million at December 31, 2002 and 2001, respectively. Celanese believes its
credit risk exposure related to counterparty default on instruments is not
material. Celanese recognized net interest expense from hedging activities
relating to interest rate swaps of 13 million in 2002 and 6 million
in 2001. As of December 31, 2002, Celaneses interest rate swaps,
designated as cash flow hedges, resulted in an increase in total assets and
total liabilities and a decrease in shareholders equity of 4
million, 17 million and 8 million, net of related income tax of
4 million, respectively. During the year ended December 31, 2002, Celanese
recorded a net loss of 3 million in interest and other income, net for the
ineffective portion of the interest rate swaps. As of December 31, 2001,
Celaneses interest rate swaps resulted in an increase in total assets and
total liabilities and a decrease in shareholders equity of 2
million, 11 million and 4 million, net of related income tax of
2 million, respectively. During the year ended December 31, 2001, Celanese
recorded a net loss of 5 million in interest and other income, net for the
ineffective portion of the interest rate swaps. The amount of losses expected to
be reclassified from accumulated other comprehensive income (loss) into earnings
within the next twelve months is not currently determinable.

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Commodity
Risk Management

Celaneses
policy allows the purchase of up to 80 percent of its natural gas and butane
requirements generally up to 18 months forward using forward purchase or
cash-settled swap contracts to manage its exposure to fluctuating feed stock and
energy costs. Throughout 2002, Celanese had entered into natural gas forward and
cash-settled swap contracts for slightly less than 50 percent of its natural gas
requirements, generally for up to 6 months forward. The fixed price natural gas
forward contracts are principally settled through actual delivery of the
physical commodity. The maturities of the cash-settled swap contracts correlate
to the actual purchases of the commodity and have the effect of securing
predetermined prices for the underlying commodity. While these contracts are
structured to limit Celaneses exposure to increases in commodity prices,
they can also limit the potential benefit Celanese might have otherwise received
from decreases in commodity prices. These cash-settled swap contracts are
accounted for as cash flow hedges. Realized gains and losses on these contracts
are included in the cost of the commodity upon settlement of the contract.
Celanese recognized losses of less than 1 million and 2 million from
natural gas swap contracts in 2002 and 2001, respectively. There was no material
impact on the balance sheet at December 31, 2002 and December 31, 2001. The
effective portion of unrealized gains and losses associated with the
cash-settled swap contracts of 1 million and less than 1 million at
December 31, 2002 and December 31, 2001 are recorded as a component of
accumulated other comprehensive income (loss) until the underlying hedged
transactions are reported in earnings. The notional amount of the outstanding
swaps at December 31, 2002 is not material.

As
a substantial portion of Celaneses products and raw materials are
commodities whose prices fluctuate as market supply/demand fundamentals change,
in addition to the use of derivative instruments and forward purchase contracts
for commodity price hedging, Celanese enters into long-term supply agreements.
Celanese tries to protect against fluctuations in its raw material prices
through various business strategies including selling price increases as well as
entering into multi-year purchasing and sales agreements. In addition, in 2002,
Celanese prepaid U.S. $25 million (24 million) for a long-term cost-based
supply agreement and anticipates additional payments approximating 70
million over the next three years.

### Critical
Accounting Policies and Estimates

Our
Consolidated Financial Statements are based on the selection and application of
significant accounting policies. The preparation of these financial statements
and application of these policies requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. However,
Celanese is not currently aware of any reasonably likely events or circumstances
that would result in materially different results.

Celaneses
senior management has reviewed these critical accounting policies and estimates
with the Finance and Audit Committee of the Supervisory Board.

Celanese
believes the following accounting polices and estimates are critical to
understanding the financial reporting risks present in the current economic
environment. These matters, and the judgments and uncertainties affecting them,
are also essential to understanding our reported and future operating results.
See Note 2 to the Consolidated Financial Statements for a more comprehensive
discussion of Celaneses significant accounting policies.

Recoverability
of Long-Lived Assets

Our
business is capital intensive and has required, and will continue to require,
significant investments in property, plant and equipment. At December 31, 2002,
the carrying amount of our property, plant and equipment was 1,621
million. As discussed in Note 2 to the Consolidated Financial Statements,
recoverability of property, plant and equipment to be held and used, is assessed
in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assetsby a comparison of the carrying amount
of an asset or group of assets to the future net undiscounted cash flows
expected to be generated by the asset or group of assets. If such assets are
considered impaired, the impairment recognized is measured as the amount by
which the carrying amount of the assets exceeds the fair value of the assets.

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Prior
to January 1, 2002, Celanese assessed the recoverability of the carrying value
of its intangible assets in the same manner as for property, plant and
equipment. Upon adoption of SFAS No. 142 on January 1, 2002, Celanese assesses
the recoverability of the carrying value of its goodwill and other intangible
assets with indefinite useful lives at least annually or whenever events or
changes in circumstances indicate that the carrying amount of the asset may not
be fully recoverable. Recoverability of goodwill is measured at the reporting
unit level based on a two-step approach. First, the carrying amount of the
reporting unit is compared to the fair value as estimated by the future net
discounted cash flows expected to be generated by the reporting unit. To the
extent that the carrying value of the reporting unit exceeds the fair value of
the reporting unit, a second step is performed, wherein the reporting
units assets and liabilities are fair valued. The implied fair value of
goodwill is calculated as the fair value of the reporting unit in excess of the
fair value of all non-goodwill assets and liabilities allocated to the reporting
unit. To the extent that the reporting units carrying value of goodwill
exceeds its implied fair value, impairment exists and must be recognized.

As
of January 1, 2002, Celanese had goodwill with a net carrying value of
1,162 million that was subject to the transition provision of SFAS No.
142. During the first half of 2002, Celanese performed the required impairment
tests of goodwill as of January 1, 2002 and determined that there was no
impairment.

A
prolonged general economic downturn and, specifically, a continued downturn in
the chemical industry could intensify competitive pricing pressure, create an
imbalance of industry supply and demand, or otherwise diminish volumes or
profits. Such events, combined with changes in interest rates, could adversely
affect our estimates of future net cash flows to be generated by our long-lived
assets. Consequently, it is possible that our future operating results could be
materially and adversely affected by additional impairment charges related to
the recoverability of our long-lived assets.

Restructuring
and Special Charges

Special
charges include provisions for restructuring and other expenses and income
incurred outside the normal course of operations. Restructuring provisions
represent costs related to severance and other costs incurred in connection with
a decision to exit non-strategic businesses. These measures are based on formal
management decisions, establishment of agreements with the employees
representatives or individual agreements with the affected employees as well as
the public announcement of the restructuring plan. The related reserves reflect
certain estimates, including those pertaining to separation costs, settlements
of contractual obligations and other closure costs. We reassess the reserve
requirements to complete each individual plan under our restructuring program at
the end of each reporting period. Actual experience has been and may continue to
be different from these estimates. See Note 26 to the Consolidated Financial
Statements for further discussion of special charges.

Environmental
Liabilities

Celanese
manufactures and sells a diverse line of chemical products throughout the world.
Accordingly, Celaneses operations are subject to various hazards
incidental to the production of industrial chemicals including the use,
handling, processing, storage and transportation of hazardous materials.
Celanese recognizes losses and accrues liabilities relating to environmental
matters if available information indicates that it is probable that a liability
has been incurred and the amount of loss is reasonably estimated. If the event
of loss is neither probable nor reasonably estimable, but is reasonably
possible, Celanese provides appropriate disclosure in the notes to its
Consolidated Financial Statements if the contingency is material.

Total
environmental liabilities were 199 million at December 31, 2002.
Measurement of environmental reserves is based on the evaluation of currently
available information with respect to each individual site and considers factors
such as existing technology, presently enacted laws and regulations and prior
experience in remediation of contaminated sites. An environmental reserve
related to cleanup of a contaminated site might include, for example, provision
for one or more of the following types of costs: site investigation and testing
costs, cleanup costs, costs related to soil and water contamination resulting
from tank ruptures, postremediation monitoring costs. These reserves also do not
take into account any claims or recoveries from insurance. Environmental
liabilities in which the remediation period is fixed and associated costs are
readily determinable are recorded at their net present value. Changes to
environmental regulations or other factors affecting environmental liabilities
are reflected in the Consolidated Financial Statements in the period in which
they occur. See Note 25 of the Notes to the Consolidated Financial Statements
for further discussion of environmental liabilities.

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Realization
of Deferred Tax Assets

Total
net deferred tax assets were 616 million at December 31, 2002. Celanese
regularly reviews its deferred tax assets for recoverability and establishes a
valuation allowance based on historical taxable income, projected future taxable
income, and the expected timing of the reversals of existing temporary
differences. A valuation allowance is provided when it is more likely than not
that some portion or all of the deferred tax assets will not be realized. Such
evaluations require significant management judgments. Celanese has established
valuation allowances primarily for U.S. state and capital loss carryforwards,
German trade income tax loss carryforwards and Mexican net operating loss
carryforwards, which may not be realizable. Based on Celaneses projected
pretax earnings, management believes it is more likely than not that Celanese
will realize the benefit of the remaining net deferred tax assets existing at
December 31, 2002. See Note 13 to the Consolidated Financial Statements for
further discussion of deferred tax assets.

Benefit
Obligations

Celanese
sponsors pension and other postretirement benefit plans covering substantially
all employees who meet eligibility requirements. With respect to its U.S.
qualified defined benefit pension plan, minimum funding requirements are
determined by the Employee Retirement Income Security Act. For the periods
presented, Celanese has not been required to contribute under these minimum
funding requirements. However, Celanese chose to contribute 101 million,
161 million, and 81 million for the years ended 2002, 2001 and 2000,
respectively. Benefits are generally based on years of service and/or
compensation. Certain assumptions are used in the calculation of the actuarial
valuation of Celanese-sponsored plans. These assumptions include the weighted
average discount rate, rates of increase in compensation levels, expected
long-term rates of return on plan assets and increases or trends in health care
costs. In addition to the above-mentioned assumptions, Celaneses actuarial
consultants also use subjective factors such as withdrawal and mortality rates
to estimate the projected benefit obligation. The actuarial assumptions used by
Celanese may differ materially from actual results due to changing market
and economic conditions, higher or lower withdrawal rates or longer or shorter
life spans of participants. These differences may result in a significant impact
to the amount of pension expense recorded by Celanese in future periods.

The
amounts recognized in the Consolidated Financial Statements related to pension
and postretirement benefits are determined on an actuarial basis. A significant
assumption used in determining our pension expense is the expected long-term
rate of return on plan assets. In 2002, we assumed an expected long-term rate of
return on plan assets of 9.0% for Celaneses U.S. Qualified Plan, which
represents greater than 90 percent and 80 percent of Celaneses pension plan assets and
liabilities, respectively. On average, the actual return on plan assets over the
long-term has exceeded 9.0%; however, in the past two years, the plans
assets have experienced overall market related losses.

For
2002, we lowered our expected long-term rate of return assumption for our U.S.
plans from 9.25% to 9.0%, reflecting the generally expected moderation of
long-term rates of return in the financial markets. We estimate a 25 basis point
decline in the expected long-term rate of return for our U.S. Qualified Plan to
increase pension expense by an estimated 4 million. Another estimate that
affects our pension and postretirement benefit expense is the discount rate used
in the annual actuarial valuations of pension and postretirement benefit plan
obligations. At the end of each year, we determine the appropriate discount
rate, which represents the interest rate that should be used to determine the
present value of future cash flows currently expected to be required to settle
the pension and postretirement benefit obligations. The discount rate is
generally based on the yield on high-quality corporate fixed-income securities.
At December 31, 2002, we lowered our discount rate to 6.75% from 7.25% at
December 31, 2001 for our U.S. plans. We estimate that a 25 basis point decline
in the discount rate for our U.S. pension and postretirement medical plans will
increase pension and postretirement benefit expense by an estimated 1
million and less than 1 million, respectively, and our liabilities by
56 million and 7 million, respectively.

Celanese
sponsors other postretirement benefit plans. These plans provide medical and life
insurance benefits to retirees who meet minimum age and service requirements. The accrued
postretirement benefit cost at December 31, 2002 and 2001, includes 41 million and 33 million,
respectively, in accrued expenses and 310 million and 373 million,
respectively, in other noncurrent liabilities. The key determinants of the accumulated
postretirement benefit obligations (APBO) are the discount rate and the
healthcare cost trend rate. The healthcare cost trend rate has a

64

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significant effect on the reported amounts of APBO and related expense. For example,
increasing the healthcare cost trend rate by one percentage point in each year would
increase the APBO at December 31, 2002, and the 2002 postretirement benefit cost by
approximately 23 and 2 million, respectively, and decreasing the healthcare
cost trend rate by one percentage point in each year would decrease the APBO at December
31, 2002 and the 2002 postretirement benefit cost by approximately 11 million and
1 million, respectively. For further information, see Note 19 to the Consolidated
Financial Statements.

Accounting
for Commitments & Contingencies

Celanese
is subject to a number of lawsuits, claims, and investigations, incidental to
the normal conduct of its business, relating to and including product liability,
patent and intellectual property, commercial, contract, antitrust, and
employment matters, which are handled and defended in the ordinary course of
business. (See Note 24 to the Consolidated Financial Statements.) Celanese
routinely assesses the likelihood of any adverse judgments or outcomes to these
matters as well as ranges of probable and reasonably estimable losses.
Reasonable estimates involve judgments made by management after considering a
broad range of information including: notifications, demands, settlements which
have been received from a regulatory authority or private party, estimates
performed by independent companies and outside counsel, available facts,
identification of other potentially responsible parties and their ability to
contribute, and prior experience. A determination of the amount of loss
contingency required, if any, is assessed in accordance with SFAS No. 5
Contingencies and Commitments and recorded if probable and estimable
after careful analysis of each individual matter. The required reserves may
change in the future due to new developments in each matter and as additional
information becomes available.

CNA
Holdings, Inc. (CNA Holdings), which is a U.S. subsidiary of
Celanese, includes the U.S. business now conducted by Ticona, along with Shell
Chemical Company (Shell) and E. I. du Pont de Nemours
(DuPont), among others, have been the defendants in a series of
lawsuits, alleging that plastics manufactured by these companies that were
utilized in the production of plumbing systems for residential property were
defective or caused such plumbing systems to fail. CNA Holdings has accrued its
best estimate of its share of the plumbing actions. At December 31, 2002,
Celanese had accruals of 81 million for this matter, of which 22
million is included in current liabilities. Management believes that the
plumbing actions are adequately provided for in the Consolidated Financial
Statements. However, if Celanese were to incur an additional charge for this
matter, such a charge would not be expected to have a material adverse effect on
the financial position, but may have a material adverse effect on the results of
operations or cash flows of Celanese in any given accounting period. Celanese
has recorded receivables relating to the anticipated recoveries from third party
insurance carriers relating to this product liability matter. These receivables
are based on the probability of collection, an opinion of external counsel, the
settlement agreements reached with a majority of Celaneses insurance
carriers whose coverage level exceeds the receivables and the status of current
discussions with other insurance carriers. As of December 31, 2002, Celanese had
recorded 70 million in outstanding insurance claim receivables.
Collectibility could vary depending on the financial status of the insurance
carriers. For further information, see Note 24 to the Consolidated Financial
Statements.

Captive
Insurance Companies

Celanese
consolidates two wholly owned insurance companies (the Captives).
The Captives are a key component of Celaneses global risk management
program as well as a form of self-insurance for property, liability and workers
compensation risks. The Captives issue insurance policies to Celanese to provide
consistent coverage amid fluctuating costs in the insurance market and to lower
long-term insurance costs by avoiding or reducing commercial carrier overhead
and regulatory fees. The Captives issue insurance policies and coordinate claims
handling services with third party service providers. They retain risk at levels
approved by the Board of Management and obtain reinsurance coverage from third
parties to limit the net risk retained. One of the Captives also insures certain
third party risks.

The
liabilities recorded by the Captives relate to the estimated risk of loss
recorded by the Captives, which is based on management estimates and actuarial
valuations, and unearned premiums, which represent the portion of the premiums
written applicable to the terms of the policies in force. The establishment of
the provision for outstanding losses is based upon known facts and
interpretation of circumstances influenced by a variety of factors. In
establishing a provision, management considers facts currently known and the
current state of laws and litigation where applicable. Liabilities are
recognized for known claims when sufficient information has been

65

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developed to indicate involvement
of a specific policy and management can reasonably estimate their liability. In addition,
liabilities have been established to cover additional exposure on both known and
unasserted claims. Estimates of the liabilities are reviewed and updated
regularly.

The
Captives use reinsurance arrangements to reduce their risk of loss. Reinsurance
arrangements however do not relieve the Captives from their obligations to
policy holders. Failure of the reinsurers to honor their obligations could
result in losses to the Captives. The Captives evaluate the financial condition
of their reinsurers and monitor concentrations of credit risk to minimize their
exposure to significant losses from reinsurer insolvencies and establish
allowances for amounts deemed non-collectable.

Premiums
written are recognized as based on the terms of the policies. Capitalization of
the Captives is determined by regulatory guidelines.

Revenue
Recognition

Celanese
recognizes revenue when title and risk of loss have been transferred to the
customer and collection of the resulting receivable is reasonably assured,
generally at the time of shipment of products. Celanese recognizes revenue in
accordance with SEC Staff Accounting Bulletin (SAB) No. 101, Revenue
Recognition in Financial Statements (SAB 101), as amended by SAB 101A and 101B.
SAB 101 requires that four basic criteria must be met before revenue can be
recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has
occurred or services rendered; (3) the fee is fixed and determinable; and (4)
collectibility is reasonably assured. Should changes in conditions cause
management to determine revenue recognition criteria are not met for certain
future transactions, revenue recognition would be delayed until such time that
the transactions become realizable and fully earned. Revenues are recognized net
of discounts, cash sales incentives, customer bonuses and rebates granted. Cash
sales incentives are recorded as a reduction of revenue when the related revenue
is recorded. Payments received in advance of revenue recognition are recorded as
deferred revenue.

### New
Accounting Standards

In
June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
associated asset retirement costs. The statement applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development, and normal operation of long-lived
assets. The statement requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred. The
asset retirement obligations will be capitalized as part of the carrying amount
of the long-lived asset. The statement is effective on January 1, 2003, with
earlier adoption permitted. The estimated after-tax transition charge of 5
million will be recorded as a cumulative effect of an accounting change in 2003.
The on-going expense on an annual basis resulting from the initial adoption of
the statement is estimated to be approximately 2 million.

### Outlook

At
the start of 2003 visibility remains low and economic growth has been slow and
uneven. We expect higher raw material and energy costs and a strong euro
exchange rate versus the dollar to continue during the first six months of 2003.

In
this environment, we continue our emphasis on productivity, cost reduction and
financial soundness. We expect further progress in the implementation of our
operational excellence programs and increased cost savings from the completion
of our Focus and Forward initiatives.

In
the Acetyl Products segment, the supply / demand balance is expected to
normalize following temporary industry production outages and maintenance
turnarounds in the second half of last year. We are confident that the newly
acquired emulsions businesses will contribute to profitability in this segment.
We remain cautious with respect to demand in the Technical Polymers Ticona
segment, as end-use markets are affected by the uncertain outlook for consumer
spending.

66

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Based
on current hydrocarbon conditions, our current assumptions of a continued slow
economic recovery and ongoing cost reduction and productivity improvements, we
expect EBITDA excluding special charges for the first half of 2003 to be as or
slightly better than first half of 2002.

Forward-Looking
Statements May Prove Inaccurate

This
Annual Report contains certain forward-looking statements and information
relating to Celanese that are based on the beliefs of its management as well as
assumptions made by and information currently available to Celanese. These
statements include, but are not limited to, statements about Celaneses
strategies, plans, objectives, expectations, intentions, expenditures, and
assumptions and other statements contained in this Annual Report that are not
historical facts. When used in this document, words such as
anticipate, believe, estimate,
expect, intend, plan and project
and similar expressions, as they relate to Celanese or its management, are
intended to identify forward-looking statements. These statements reflect the
current views of Celanese with respect to future events, are not guarantees of
future performance and involve risks and uncertainties that are difficult to
predict. Further, certain forward-looking statements are based upon assumptions
as to future events that may not prove to be accurate.

Many
factors could cause the actual results, performance or achievements of Celanese
to be materially different from any future results, performance or achievements
that may be expressed or implied by such forward-looking statements. These
factors include, among other things:

| |  |  | changes in general
economic, business, political and regulatory conditions in the countries or regions in
which Celanese operates;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

| |  |  | the length and depth
of product and industry business cycles particularly in the automotive, electrical,
construction and textile industries;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | changes in the price
and availability of raw materials, particularly changes in the demand for, supply of, and
market prices of fuel oil, natural gas, coal, wood pulp, 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 startup
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 Technical Polymers Ticona and Performance Products
segments;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | changes in the degree
of patent and other legal protection afforded to Celanese's products;
| | - |  | -------------------------------------------------------------------------------------------

| |  |  | 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
Celanese operates;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | changes in currency exchange rates and interest rates;
| | - |  | ------------------------------------------------------

| |  |  | changes in the
composition of Celanese and the successful completion of acquisitions, divestitures and
joint venture activities; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------

| |  |  | various
other factors, both referenced and not referenced in this Annual Report.
| | - |  | --------------------------------------------------------------------------------

67

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Many
of these factors are macroeconomic in nature and are, therefore, beyond the
control of Celaneses management. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, the
actual results, performance or achievements of Celanese may vary materially from
those described herein as anticipated, believed, estimated, expected, intended,
planned or projected. Celanese does not intend, and does not assume any
obligation, to update these forward-looking statements, which speak only as of
their dates.

## Item 6. Directors, Senior Management and Employees

## Directors and Senior Management

The
current members of the Celanese board of management, their respective ages as of
February 10, 2003 and their functions are as follows:

|Claudio Sonder   |  | Age:                       |  | 60                                                                                                                                                        | 
|---------------- |  | -------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                 |  | First Elected:             |  | 1999                                                                                                                                                      | 
|                 |  | Function:                  |  | Chairman of the Celanese AG Board of Management                                                                                                           | 
|                 |  | Supervisory Board          |  |                                                                                                                                                           | 
|                 |  | Memberships/Directorships: |  | Dresdner Bank Lateinamerika AG, Companhia Suzano de Papel e Celulose S.A.*, Brazil, Ibero-Amerika Verein e.V.                                             | 
|                 |  | Term Expires:              |  | October 31, 2004                                                                                                                                          | 
|                
|Andreas Pohlmann |  | Age:                       |  | 45                                                                                                                                                        | 
|                 |  | First Elected:             |  | 2002                                                                                                                                                      | 
|                 |  | Function:                  |  | Chief Administrative Officer, Director of Personnel, Responsible for the Performance Products segment, as well as Innovation, Environment, Personnel, Law | 
|                 |  | Supervisory Board          |  |                                                                                                                                                           | 
|                 |  | Memberships/Directorships: |  | Pensionskasse der Mitarbeiter der Hoechst-Gruppe Vva G (German pension fund for employees of the Hoechst Group)                                           | 
|                 |  | Term Expires:              |  | October 31, 2005                                                                                                                                          | 
|                
|Perry W. Premdas |  | Age:                       |  | 50                                                                                                                                                        | 
|                 |  | First Elected:             |  | 1999                                                                                                                                                      | 
|                 |  | Function:                  |  | Chief Financial Officer; Responsible for the Acetate Products segment                                                                                     | 
|                 |  | Term Expires:              |  | October 31, 2004                                                                                                                                          | 
|                
|David N. Weidman |  | Age:                       |  | 47                                                                                                                                                        | 
|                 |  | First Elected:             |  | 2000                                                                                                                                                      | 
|                 |  | Function:                  |  | Chief Operating Officer; Responsible for the Acetyl Products, Chemical Intermediates, and Technical Polymers Ticona segments                              | 
|                 |  | Supervisory Board          |  |                                                                                                                                                           | 
|                 |  | Memberships/Directorships: |  | American Chemistry Council, National Advisory Council of the Marriott School of Management                                                                | 
|                 |  | Term Expires:              |  | October 31, 2005                                                                                                                                          | 

---

*
Listed company

Claudio
Sonderserved on the Hoechst board of management from 1996 until October
1999. There he was responsible for the agricultural chemicals, animal health and
nutrition businesses, before becoming responsible for Hoechsts Ticona
business segment, which is now reported by Celanese under the Technical Polymers
Ticona segment, and its Celanese business segment, which is now largely reported
by Celanese under the Acetyl Products, Chemical Intermediates and Acetate
Products segments. Mr. Sonder worked with Hoechsts industrial businesses
for more than 30 years in Brazil and Germany. He was the head of Hoechsts
Plastics and Films Division in Frankfurt, Germany from 1994 to 1996 and served
as chairman and chief executive officer of Hoechst do Brazil from 1983 to 1994.

68

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Andreas
Pohlmannwas appointed to the Celanese board of management on October 22,
2002. He had served as Celanese AGs Vice President and Corporate Secretary
since October 1999, as well as managing director of Celanese Ventures since
February 2002. In his ten years at Hoechst, Dr. Pohlmann, an attorney, held
various positions of increasing responsibility in the Corporate Law, Corporate
Public and Governmental Affairs, and Corporate Controlling and Development
departments, ultimately serving as Hoechst AGs Corporate Secretary from
1996 to 1999.

Perry
W. Premdaswas senior executive vice president and chief financial officer
of Centeon LLC, Hoechsts blood plasma protein joint venture with
Rhône-Poulenc, from 1997 to 1998. From January 1, 1999 until the demerger,
he was on a special assignment at Hoechst relating to the demerger. Since
joining Celanese Corporation in 1976, Mr. Premdas has held financial and line
positions mainly with the industrial businesses of Hoechst and the former
Celanese Corporation in the United States, Germany and Mexico. He served as vice
president and treasurer of Hoechst Celanese Corporation from 1996 to 1997 and as
vice president and general manager of Hoechst Celanese Corporations
Printing Products Division from 1992 to 1995.

David
N. Weidmanbecame Celanese AGs chief operating officer on January 1,
2002. He joined Celanese as the chief executive officer of Celanese Chemicals on
September 1, 2000. Before joining Celanese, he was a member of Honeywell/Allied
Signals corporate executive council and the president of its performance
polymers business since 1998. Mr. Weidman joined Allied Signal in 1994 as vice
president and general manager of performance additives and became president and
general manager of fluorine products in 1995. Mr. Weidman began his career in
the chemical industry with American Cyanamid in 1980, serving as vice president
and general manager of its fibers division from 1990 to 1994, as vice president
and general manager of Cyanamid Canada from 1989 to 1990, and as managing
director of Cyanamid Nordiska in Stockholm, Sweden from 1987 to 1989.

The
incumbent members of the supervisory board of Celanese, their respective ages as
of February 10, 2003 and their principal occupations are as follows:

|Günter Metz         |  | Age:                       |  | 67                                                                                                                                         | 
|------------------- |  | -------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ | 
|Chairman            |  | First Elected:             |  | 1999                                                                                                                                       | 
|                    |  | Principal Occupation:      |  | Former deputy chairman of the board of management of Hoechst AG                                                                            | 
|                    |  | Supervisory Board          |  |                                                                                                                                            | 
|                    |  | Memberships/Directorships: |  | Aventis S.A*., Schenker AG, Zürich Beteiligungs AG                                                                                         | 
|                    |  | Term Expires:              |  | 2005                                                                                                                                       | 
|                   
|Reiner Nause       |  | Age:                       |  | 57                                                                                                                                         | 
|Deputy Chairman     |  | First Elected:             |  | 1999                                                                                                                                       | 
|                    |  | Principal Occupation:      |  | Technician, Chairman of the central workers council of Celanese Chemicals Europe GmbH, Chairman of the Celanese AG Group Workers Council | 
|                    |  | Term Expires:              |  | 2005                                                                                                                                       | 
|                   
|Saad Ali Al-Shuwaib |  | Age:                       |  | 50                                                                                                                                         | 
|                    |  | First Elected:             |  | 2002                                                                                                                                       | 
|                    |  | Principal Occupation:      |  | Chairman and Managing Director of Petrochemical Industries Co., Kuwait                                                                     | 
|                    |  | Supervisory Board          |  |                                                                                                                                            | 
|                    |  | Memberships/Directorships: |  | Kuwait Petroleum Corporation                                                                                                               | 
|                    |  | Term Expires:              |  | 2005                                                                                                                                       | 
|                   
|Hanswilhelm Bach   |  | Age:                       |  | 55                                                                                                                                         | 
|                    |  | First Elected:             |  | 1999                                                                                                                                       | 
|                    |  | Principal Occupation:      |  | Graduate chemist, Head of Environmental, Health & Safety Affairs at Ticona GmbH, Kelsterbach site                                          | 
|                    |  | Term Expires:              |  | 2005                                                                                                                                       | 

69

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|Hans-Jürgen Brinkmann |  | Age:                       |  | 48                                                                                                                                                                                                                                                                                            | 
|---------------------- |  | -------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                       |  | First Elected:             |  | 2002**                                                                                                                                                                                                                                                                                        | 
|                       |  | Principal Occupation:      |  | Plant mechanic, Member of the Workers Council of Celanese Chemicals Europe GmbH, Ruhrchemie plant                                                                                                                                                                                            | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 
|                      
|Armin Droth           |  | Age:                       |  | 48                                                                                                                                                                                                                                                                                            | 
|                       |  | First Elected:             |  | 2000                                                                                                                                                                                                                                                                                          | 
|                       |  | Principal Occupation:      |  | Electrical Engineer, representative of the German association of management and professional staff (Verband angestellter Akademiker), member of the workers council of Celanese Chemicals Europe GmbH, Frankfurt site                                                                        | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 
|                      
|Alan R. Hirsig         |  | Age:                       |  | 63                                                                                                                                                                                                                                                                                            | 
|                       |  | First Elected:             |  | 1999                                                                                                                                                                                                                                                                                          | 
|                       |  | Principal Occupation:      |  | Former president and chief executive officer of ARCO Chemical Company, United States                                                                                                                                                                                                          | 
|                       |  | Supervisory Board          |  |                                                                                                                                                                                                                                                                                               | 
|                       |  | Memberships/Directorships: |  | Checkpoint Systems Inc.*, Hercules Inc.*, Philadelphia Suburban Corporation*                                                                                                                                                                                                                  | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 
|                      
|Joannes C. M. Hovers   |  | Age:                       |  | 59                                                                                                                                                                                                                                                                                            | 
|                       |  | First Elected:             |  | 1999                                                                                                                                                                                                                                                                                          | 
|                       |  | Principal Occupation:      |  | Former chief executive officer of Océ N.V., the Netherlands                                                                                                                                                                                                                                   | 
|                       |  | Supervisory Board          |  |                                                                                                                                                                                                                                                                                               | 
|                       |  | Memberships/Directorships: |  | GTI N.V.*, GVB N.V., Inter Access N.V., Koninklijke Grolsch N.V.*, Kusters Engineering B.V., Mignos en De Block N.V., Multi Processing Equipment Group N.V., De Nederlandsche Bank N.V., Penguin Ventures N.V., Randstad Holding N.V.*, Schils N.V., Stork MPS N.V., Tilburg University (KUB) | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 
|                      
|Herbert Schmalz       |  | Age:                       |  | 51                                                                                                                                                                                                                                                                                            | 
|                       |  | First Elected:             |  | 2000**                                                                                                                                                                                                                                                                                        | 
|                       |  | Principal Occupation:      |  | Chemistry Technician, Member of the Workers Council of Ticona GmbH, Ruhrchemie Plant, Member of the Central Workers Council                                                                                                                                                                 | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 
|                      
|Ralf Sikorski         |  | Age:                       |  | 41                                                                                                                                                                                                                                                                                            | 
|                       |  | First Elected:             |  | 1999                                                                                                                                                                                                                                                                                          | 
|                       |  | Principal Occupation:      |  | Labor Union Secretary, Deputy Regional Head of IG BCE, Hesse/Thuringia                                                                                                                                                                                                                        | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 
|                      
|Alfons Titzrath        |  | Age:                       |  | 70                                                                                                                                                                                                                                                                                            | 
|                       |  | First Elected:             |  | 1999                                                                                                                                                                                                                                                                                          | 
|                       |  | Principal Occupation:      |  | Former chairman of the supervisory board of Dresdner Bank AG, Germany                                                                                                                                                                                                                         | 
|                       |  | Supervisory Board          |  |                                                                                                                                                                                                                                                                                               | 
|                       |  | Memberships/Directorships: |  | Deutsche Lufthansa AG*, RWE Aktiengesellschaft*                                                                                                                                                                                                                                               | 
|                       |  | Term Expires:              |  | 2005                                                                                                                                                                                                                                                                                          | 

70

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|Kendrick R. Wilson III |  | Age:                       |  | 56                                                       | 
|---------------------- |  | -------------------------- |  | -------------------------------------------------------- | 
|                       |  | First Elected:             |  | 1999                                                     | 
|                       |  | Principal Occupation:      |  | Managing director, Goldman, Sachs & Co., United States   | 
|                       |  | Supervisory Board          |  |                                                          | 
|                       |  | Memberships/Directorships: |  | Anthracite Capital Inc.*, American Marine Holdings Corp. | 
|                       |  | Term Expires               |  | 2005                                                     | 

---

| |  | representative
of the employees
|- |  | -------------------------------

|* |  | Listed
company
|- |  | --------------

|** |  | In May 2000,
Celaneses employees in Germany elected 12 representatives to the supervisory board
in accordance with the German Co-Determination Law (Mitbestimmungsgesetz). Six of
these representatives took office immediately; the other six were chosen as alternates to
serve in the event one of the employee representatives resigned or otherwise ceased to
serve in office. Mr. Brinkmann and Mr. Schmalz assumed their positions on the supervisory
board in 2002 and 2003, respectively, replacing Gerd Decker and Werner Zwoboda,
respectively.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

## Compensation of Directors and Officers

Supervisory Board

Members
of the Celanese supervisory board receive, in addition to reimbursement of
out-of-pocket expenses, a fixed annual payment which, for 2002, amounted to
61,300 for the Chairman, 46,000 for the Deputy Chairman and
30,700 for all other members of the Celanese supervisory board. To the
extent that on the due date Celanese has treasury stock that it may use for this
purpose, half of these fixed annual amounts are paid in Celanese ordinary shares
with the remainder paid in cash. In addition, for each Celanese supervisory
board meeting attended, members receive a meeting fee of 3,000 for the
Chairman, 2,250 for the Deputy Chairman and 1,500 for all other
members of the Celanese supervisory board. Also, each member of the Celanese
supervisory board receives a committee retainer for each membership in a
committee of the Celanese supervisory board. The committee retainer amounts to
3,000 for the chairman of the committee and 1,500 for all other
members of the committee. All members of the Celanese supervisory board are also
reimbursed for value added tax on these amounts. They also participate in a
stock appreciation rights plan, the broad terms of which are similar to the
stock appreciation rights plans included in long-term incentive plans described
below. For 2002, the aggregate compensation of the members of the supervisory
board amounted to approximately 0.8 million. According to German law,
compensation of supervisory board members requires shareholder approval.
Compensation for the Celanese supervisory board was approved at the May 10, 2000
annual general meeting of shareholders and remains in effect on the date of this
Annual Report. At the April 1, 2003 annual general meeting, shareholders will be
asked to approve an increase in the fixed annual payment to 80,000 for the
chairman, 60,000 for the deputy chairman and 40,000 for all other
members of the Celanese supervisory board. Shareholders will also be asked to
approve an increase in the meeting fee to 4,000 for committee chairmen and
2,000 for committee members.

Board of Management

The
aggregate amount of compensation paid during 2002 to the members of the Celanese
board of management was approximately 6 million. The aggregate amount
accrued by Celanese during 2002 to provide pension, retirement and similar
benefits for the members of the board of management was 3.15 million.

Board Service Agreements

Celanese
AG has entered into service agreements with the members of the board of
management. These agreements establish the following four principal elements of
compensation:

| |  |  | BASE
SALARY: Base salary is established based on a comparative analysis of base salaries paid
within a selected peer group of international companies.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | ANNUAL
BONUS: The annual bonus is dependent on achieving the economic and  personal objectives
agreed between the Personnel and Compensation Committee of  the supervisory board and the
board of management member. At present, such  objectives pertain to EBITDA, excluding
special charges, and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

71

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| | trade working capital
of Celanese on a consolidated basis, as well as of the business for which the board of
management member is responsible. Bonuses are expressed as a percentage of base salary and
may be adjusted, upward or downward, based on the degree to which the targets are
achieved. In 2002, such bonus payments could account for up to 80 percent of the
executives base salary, or up to 160 percent of base salary if all targets were
significantly exceeded.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | LONG-TERM INCENTIVE
PLANS: The long-term incentive plans were based on stock appreciation rights plans adopted
in 1999 and 2001 and on a stock option plan in 2002. All the plans are based on the
appreciation of Celanese AG ordinary shares and are further described under Incentive
Plans below. In 1999, Celanese AG granted board of management members as a group 459,000*
stock appreciation rights at a base price of 16.37 per share. In 2001, Celanese
granted board of management members as a group 414,000 stock appreciation rights at a base
price of 19.56 per share. In 2002, stock options covering 225,000 shares under the
2002 plan were granted to the board as a whole with an exercise price of
27.54.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | EQUITY PARTICIPATION
PLAN: All board of management members have committed to take part in the equity
participation plan. Under this plan, a defined amount of money must be invested in
Celanese shares over a one to two year period. Each board of management member must hold
his shares as long as he is a member of the board of management. Board of management
members who enrolled in the plan prior to July 8, 2002 received stock appreciation rights.
The board of management as a group received 325,000 stock appreciation rights under this
plan. Board of management members who enroll subsequent to this date receive stock
options, if available, pursuant to the terms and conditions under which stock options may
be granted (See Incentive Plansbelow). As of February 10, 2003, no stock options
were granted to the board of management under this plan.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
accordance with German practice and the terms of their respective service
agreements, members of Celaneses board of management are entitled to
severance payments if Celanese terminates their employment before they are
entitled to receive retirement or pension benefits, or if they are entitled
under German law to terminate their employment with Celanese for good reasons.
In either case, the severance payment is based on a multiple of one to two times
the members annual compensation, including salary, bonus payments for the
current year, and the current value of a one-year grant of stock appreciation
rights and/or stock options. The multiple declines as the member nears
retirement age.

If
the termination of a member of Celaneses board of management occurs due to
a change in control of Celanese, the member may be entitled to a change in
control payment, depending on the conditions of his termination. Such change in
control payments are based on a multiple up to four times the members
annual cash compensation, based on a three-year average base salary and bonus
payment. The multiple declines as the member nears retirement age.

Members
of Celaneses supervisory board are not entitled to severance nor to change
in control payments.

## Incentive Plans

An
important component of Celaneses compensation programs is to provide
additional encouragement for attaining Celaneses annual as well as
longer-term objectives. These incentive plans are designed to attract, retain
and motivate executives and staff committed to achieving performance-related
targets that enhance in a sustainable manner the value of an investment in
Celanese shares.

Employees
participate in the benefits of achieving financial and business performance
targets through annual incentive plans. The Celanese board of management
approved two stock appreciation rights plans in 1999, one being an equity
participation plan and the other being a long-term incentive plan, both of which
took effect on October 25, 1999. In January 2001, the Celanese board of
management approved a second similar long-term incentive plan that took effect
on January 15, 2001. Under all three plans, grants were made for only a limited
period of time.

---

|* |  | This
amount includes stock appreciation rights granted to one member of the board of management
who retired as of September 1, 2000 and who exercised his stock appreciation rights at the
time of his retirement.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

72

---



In
1999, the Celanese board of management and executives of Celanese worldwide
(totaling approximately 1,500 employees) were eligible to participate in the
equity participation plan, which gives the participants a right to receive the
cash difference between the base price and the price of the shares on the day of
exercise. For the equity participation plan, the participants were required to
invest over a one or two year period a defined amount of money in Celanese
shares. The number of stock appreciation rights to be granted is defined by the
required amount of money to be invested divided by the base price of the shares
and multiplied by two. Approximately 82 percent of all eligible employees
indicated their intent to participate in this plan through substantial
investment in Celanese shares, therefore, potentially entitling participants to
receive 2.6 million stock appreciation rights; 2.5 million of these stock
appreciation rights were granted during 1999 and 0.1 million were granted during
2001. Approximately 1.7 million rights granted under this plan remain
outstanding as of December 31, 2002.

Celanese
board of management members and senior executives worldwide participate in two
long-term incentive plans, which give the participants the cash difference
between the base price and the price of the shares on the day of exercise. The
long-term incentive plans are identical to the equity participation plan, except
that they do not require an investment in Celanese shares by the participants.
The base price under the 1999 long-term incentive plan as well as the equity
participation plan was based on the average prices for the first 20 trading days
of Celanese ordinary shares and was set at 16.37 per share. At October 25,
1999, approximately 2.5 million stock appreciation rights were awarded to 168
employees, of which 1.6 million remain outstanding as of December 31, 2002. The
base price under the 2000 long-term incentive plan was based on the average
prices for the 20 trading days of Celanese ordinary shares immediately preceding
January 15, 2001 and was set at 19.56 per share. At January 15, 2001,
approximately 2 million stock appreciation rights were awarded to 170 employees,
nearly all of which remain outstanding as of December 31, 2002.

Under
all three plans, every right entitles the eligible person to participate in the
long-term appreciation in the price of one share of Celanese. Stock appreciation
rights granted under these plans have a ten year term and are generally
exercisable in whole or in part, subject to limitations, at any time during a
period defined for each plan, provided at the time of exercise, the performance
of an ordinary share of Celanese on the Frankfurt Stock Exchange exceeds the
median of the performance of the share prices of Celaneses peer group
companies as defined by Celaneses board of management.*

The
shareholder-approved 2002 Celanese Stock Option Plan authorizes the issuance of
up to 1.25 million Celanese shares to members of the board of management and
senior executives worldwide. Options are granted at a market price plus a 20
percent premium and become exercisable five years from the date of grant. Two
year vesting is possible if the Celanese share outperforms the median
performance of Celaneses competitors over the holding period. All
unexercised options expire ten years from the date of grant. If the market price
per Celanese share on the date of exercise is at least 20 percent higher than
the reference price, the holder is entitled to receive a cash payment equal to
the original exercise premium of 20 percent. On July 8, 2002, 1.11 million stock
options were awarded to 140 employees at an exercise price of 27.54 per
share and a reference price of 22.95 per share. On January 31, 2003,
86,800 stock options were awarded to 13 additional employees at an exercise
price of 23.78 per share and a reference price of 19.82 per share.

Celanese
offset its exposure under the 1999 stock appreciation rights plans by purchasing
call options covering Celanese shares, and then exercising these options for
shares as part of its share buy-back program. During 2001, Celanese purchased
one million call options to cover its financial exposure under the 2000
long-term incentive stock appreciation rights plan. As of the date of this
Annual Report, Celanese has not exercised any of the call options purchased
during 2001. See Item 11. Quantitative and Qualitative Disclosures About
Market Risk, and for additional information related to incentive plans,
see Note 21 to the Consolidated Financial Statements.

---

|* |  | The peer group
consists of Dow, DSM, Eastman, Georgia Gulf Corp. (Solutia, Inc. is substituted for
Georgia Gulf Corp. in the peer group for the 2000 long-term incentive plan and for the
2002 Stock Option Program), ICI, Lyondell Chemical Co., Methanex, Millennium and
Rhodia.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

73

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## Board Practices

As
required by the German Stock Corporation Act (Aktiengesetz), Celanese has
a two-tier board system consisting of a board of management (Vorstand)
and a supervisory board (Aufsichtsrat). The Celanese board of management
as a collective body is responsible for managing Celanese and representing
Celanese in its dealings with third parties, while the Celanese supervisory
board appoints and removes the members of the Celanese board of management and
oversees the management of Celanese. Under the German Stock Corporation Act, the
Celanese supervisory board is not permitted to make management decisions.
Pursuant to the rules of procedure of the Celanese management and supervisory
boards, the Celanese board of management must obtain the prior consent of the
Celanese supervisory board for specified matters such as acquisitions and
divestitures, joint ventures, entry into new business areas, the incurrence of
indebtedness, issuance of guarantees and creation of mortgages on real estate,
where the specific matter is considered to be of substantial economic importance
to Celanese. The supervisory board is also authorized to subject other actions
of the board of management to its prior consent. The German Stock Corporation
Act prohibits simultaneous membership on the board of management and the
supervisory board of a company.

Board of Management

The
members of the Celanese board of management may be appointed by the Celanese
supervisory board for a maximum term of five years. They may be reappointed or
have their term of office extended for one or more five year terms. Under some
circumstances, such as a serious breach of duty or a bona fidevote of no
confidence by a majority of the votes cast at a shareholders meeting, a
member of the Celanese board of management may be removed by the Celanese
supervisory board prior to the expiration of such term of office. A member of
the Celanese board of management may not deal with, or vote on, matters relating
to proposals, arrangements or contracts between himself and Celanese.

Celanese
board of management decisions are made by a simple majority vote. In the event
of a tie vote, the Chairman of the Celanese board of management has the deciding
vote.

Under
the Articles of Association (Satzung) of Celanese, any two members of the
Celanese board of management or any member of the Celanese board of management
together with the holder of a special power of attorney (Prokurist)
granted by the Celanese board of management, may represent Celanese. The
Celanese board of management must report regularly to the Celanese supervisory
board, in particular, on proposed business policy and strategy, profitability,
the performance of the businesses of Celanese, environment, health and safety,
and corporate governance matters, including risk management and compliance as
well as on any matters of particular significance which may arise from time to
time.

For
information on service contracts between Celanese and the members of its board
of management, see Compensation of Directors and Officers.

Supervisory Board

Celanese
has approximately 2,800 employees in Germany. Therefore, under the German Stock
Corporation Act, the German Co-Determination Law (Mitbestimmungsgesetz)
and the Articles of Association of Celanese, the Celanese supervisory board
consists of 12 members of whom six are elected by the shareholders and six are
elected by representatives of the German based employees. Four of the Celanese
supervisory board members representing the employees must be employees of
Celanese, whereas the remaining two must be union representatives. Blue collar
(Arbeiter) and white-collar (Angestellte) employees must be
represented in accordance with the ratio of employees who are entitled to vote
in the elections.

Any
member elected by the shareholders in a general meeting may be removed by a
majority of the votes cast by the shareholders in a general meeting. Any member
of the Celanese supervisory board elected by a particular class of employees may
be removed by three-quarters of the votes cast by the representatives of that
class of employees.

The
Celanese supervisory board appoints a chairman (Vorsitzender des
	Aufsichtsrats) and a deputy chairman (Stellvertretender Vorsitzender des
Aufsichtsrats) from among its members. The chairman of the Celanese
supervisory board must be elected by a majority of two-thirds of the members of
the Celanese supervisory board. If that majority is not reached in the first
vote, the chairman will be elected in a second vote solely by the

74

---



representatives of the
shareholders. At least half the members of the Celanese supervisory board must be present
to constitute a quorum. Unless otherwise provided for by law, resolutions are passed by a
simple majority of the Celanese supervisory board. In the event of a tie, another vote is
held and the chairman then has the deciding vote.

Celanese
supervisory board members are usually elected for five-year terms. Supervisory
board members may be re-elected. The remuneration of the members of the Celanese
supervisory board is determined by resolution at shareholder meetings. For
further information on supervisory board remuneration, see Compensation of
Directors and Officers.

Khaled
Saleh Buhamrah resigned from the supervisory board as of the end of the Annual
General Meeting on May 15, 2002. The shareholders elected Mr. Saad Ali
Al-Shuwaib, Chairman and Managing Director of Petrochemical Industries Co.,
Kuwait, as his successor. All other shareholder representatives were appointed
to the supervisory board on September 1, 1999.

In
May 2000, Celaneses employees in Germany elected 12 representatives to the
supervisory board. Six of these representatives took office immediately; the
other six were chosen as alternates to serve in the event one of the employee
representatives resigned or otherwise left his membership. Mr. Brinkmann and Mr.
Schmalz assumed their positions on the supervisory board in 2002 and 2003,
respectively, replacing Gerd Decker and Werner Zwoboda, respectively.

The
supervisory board maintains the following standing committees, all of which have
their own written rules of procedure:

Finance
and Audit Committee.The finance and audit committee reviews in advance the
annual financial statements, the consolidated annual financial statements, the
management report, the consolidated management report and the proposals to be
made to the annual general shareholders meeting for the appropriation of
the Celaneses profit and for the election of the external auditors. The
committee uses its review of these issues to prepare the corresponding
resolutions of the supervisory board. The finance and audit committee also
reviews the external auditors engagement letter, including proposed fees,
and monitors the external auditors and their work. Furthermore, the committee
reviews Celaneses significant accounting policies and remains informed of
the processes, organization and work products of the Celaneses internal
auditing function. It monitors Celaneses internal risk management and its
compliance with all applicable legal and regulatory requirements. The finance
and audit committee met twice during 2002. The members of the finance and audit
committee during 2002 were: Alfons Titzrath (Chairman), Hanswilhelm Bach,
Hans-Jürgen Brinkmann, Günter Metz, and Kendrick R. Wilson, III. In
accordance with the Commissions recently issued rules in connection with
the Sarbanes-Oxley Act on the definition and disclosure of audit committee
financial experts, the supervisory board has assessed the qualifications and
experience of finance and audit committee members and has determined that its
Chairman, Alfons Titzrath, qualifies as a financial expert to the finance and
audit committee.

Personnel
and Compensation Committee.The task of the personnel and compensation
committee is to prepare resolutions of the supervisory board on personnel
matters, in particular regarding the appointment of new board of management
members. In addition the personnel and compensation committee approves the
adoption, amendment and termination of service agreements with the members of
the board of management, as well as any dealings or proceedings between them and
Celanese. The personnel and compensation committee also approves contracts and
acts of members of the management and supervisory boards which, according to
German law, require the approval of the supervisory board. Furthermore, it
reviews Celaneses incentive and equity based compensation plans, and
prepares the supervisory boards proposal to the annual general meeting on
the election of new members of the supervisory board. Members of the personnel
and compensation committee are: Günter Metz (Chairman), Alan Hirsig, and
Reiner Nause. The personnel and compensation committee met four times during
2002.

Strategy
Committee.The strategy committee reviews the strategy for Celanese
presented to it by the board of management. It keeps itself informed about
developments and trends in the industries in which Celanese is active. Members
of the strategy committee in 2002 were: Alan Hirsig (Chairman), Saad Ali
Al-Shuwaib, Joannes Hovers, Günter Metz, Reiner Nause, Ralf Sikorski and
Werner Zwoboda. Mr. Zwoboda resigned his membership on December 31, 2002 and was
replaced by Herbert Schmalz on February 12, 2003. The strategy committee met
once during 2002.

75

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## Employees

As
of December 31, 2002, Celanese had approximately 10,700 employees worldwide
compared to 10,750 as of December 31, 2001. This represents a decrease of less
than 1 percent. At year-end, Celanese had about 6,500 employees in North
America, 3,900 employees in Europe, 200 employees in Asia and 100 employees in
the rest of the world. The following table sets forth the approximate number of
employees on a continuing basis as of December 31, 2002, 2001, and 2000.

|                         | Employees as of December 31, |       
|------------------------ | ---------------------------- | ------
|
|North America            |                              | 6,500 
|thereof USA              |                              | 4,800 
|thereof Canada           |                              | 500   
|thereof Mexico           |                              | 1,200 
|Europe                   |                              | 3,900 
|thereof Germany          |                              | 2,800 
|Asia                     |                              | 200   
|Rest of World            |                              | 100   
|                         |                              |       
|Total Celanese Employees |                              | 10,700
|                         |                              |       

Many
of Celaneses employees are unionized, particularly in Germany, Canada,
Mexico, Brazil, Belgium and France. However, in the United States, less than one
quarter of Celaneses employees are unionized. Moreover, in Germany and
France, wages and general working conditions are often the subject of centrally
negotiated collective bargaining agreements. Within the limits established by
these agreements, the various subsidiaries of Celanese negotiate directly with
the unions and other labor organizations, such as workers councils,
representing the employees. Collective bargaining agreements between the German
chemical employers associations and unions relating to remuneration typically
have a term of one year, while in the United States a three year term for
collective bargaining agreements is typical. Celanese offers comprehensive
benefit plans for employees and their families and believes its relations with
employees are satisfactory.

## Share Ownership

During
2002, 8,383 Celanese shares were issued to members of Celaneses supervisory board as a
part of their annual compensation. See Item 6. Directors, Senior Management &
Employees  Compensation.

As
of February 10, 2003, members of the supervisory board and board of management
of Celanese as a group owned 119,242 Celanese ordinary shares and stock options
covering 225,000 ordinary shares under the 2002 Celanese Stock Option Plan
described above. This represented approximately 0.69 percent of all outstanding
shares.

As
part of its value based management approach, Celanese supports employee stock ownership.
Celanese has therefore instituted a number of employee stock purchase plans for employees
who are not eligible to participate in the incentive plans mentioned above. Under these
employee stock purchase plans, active employees who invest a defined amount of money in
Celanese shares during a limited period of time are entitled to receive a 35 percent
rebate from Celanese, based on the amount invested. Most United States employees also have
the option of making their investment directly through a broker or through the Company
Stock Fund which was established in April 2000 as a part of the Celanese Americas
Retirement Savings Plan. The Company Stock Fund invests primarily in Celanese ordinary
shares. As of December 31, 2002, approximately 3,000 employees had purchased a total of
approximately one million shares under these stock purchase plans.

76

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## Item 7. Major Shareholders and Related Party Transactions

## Major Shareholders

The capital stock of Celanese consists of ordinary shares, no par value
(Stückaktien), which are issued in registered form.

Under the German Securities Trading Act (Wertpapierhandelsgesetz), holders of voting securities of a
German company listed on a stock exchange in the European Union must notify the company
and the German Federal Supervisory Authority for Securities Trading (Bundesaufsichtsamt
für den Wertpapierhandel) of the level of their holding whenever it reaches,
exceeds or falls below specified thresholds. These thresholds are 5 percent, 10 percent,
25 percent, 50 percent and 75 percent of a companys outstanding voting
rights.

In
addition, the German Takeover Act (Wertpapiererwerbs  und
Übernahmegesetz), which became effective on January 1, 2002,
implemented an additional threshold at 30 percent of the voting rights of the
company. Pursuant to the Takeover Act, a person who directly or indirectly
obtains control over a listed company must promptly publish this fact and must
within four weeks following publication submit a mandatory public offer for the
remaining outstanding shares. The Takeover Act defines control in the meaning of
this requirement as the holding of at least 30 percent of the voting rights in
the relevant company.

The
table below sets forth, as of February 10, 2003, the number of Celanese ordinary
shares held by holders of more than 5 percent of Celanese ordinary shares and
their percentage ownership based on 50,058,476 Celanese ordinary shares
outstanding as of December 31, 2002:

|Identity of Person or Group          | Shares Owned |  | Percent   
|------------------------------------ | ------------ |  | ----------
|Kuwait Petroleum Corporation (KPC) |              |  | 14,400,000
|FMR Corporation*                     |              |  | 5,853,817 
|First Pacific Advisors, Inc.        |              |  | 3,134,350 

There
have been no significant changes in the percentage ownership held by KPC.
However, as a result of Celaneses recent share buy-back program, which is
scheduled to be complete by April 2003, KPCs percentage ownership of
outstanding shares increased from 28.6 percent to 28.8 percent by December 31,
2002. During 2002, FMR Corporations ownership increased from 3,566,660
shares or 7.1 percent to 5,853,817 shares or 11.7 percent, representing an
increase of 4.6 percent.

As
of February 10, 2003, Celanese had approximately 100,000 shareholders. Approximately 9,000
of these shareholders were U.S. holders. Based on the share register, approximately 35
percent of Celanese ordinary shares were held by U.S. holders as of this date.

Celanese
has been informed that KPC, which is controlled by the Government of Kuwait, had direct
shareholdings representing approximately 28.8 percent of the outstanding Celanese shares
as of February 10, 2003. Celanese is not aware of any voting agreements or other
agreements of any kind between KPC and any of Celaneses other shareholders. There is
one KPC representative serving as a shareholder representative on the supervisory board;
however, KPC does not have the voting power to ensure the election of its representative
to the supervisory board. KPC has the ability, as a matter of German corporate law, to
block some corporate actions by Celanese which are subject to approval by shareholders at
a meeting with a majority of 75 percent of the votes cast or, as the case may be, 75
percent of the share capital represented at the meeting. See Item 6. Directors,
Senior Management and Employees.

---

|* |  | FMR Corporations
Schedule 13G filed with the Commission on January 10, 2003 states that it beneficially
owns 5,853,817 Celanese Ordinary Shares, which corresponds to an ownership percentage of
11.6 percent. However, 5,853,817 shares correspond to 11.7 percent of the 50,058,476
issued and outstanding shares of Celanese AG. These Celanese shares are beneficially owned
through subsidiaries of FMR Corporation as follows: 4,401,558 shares by Fidelity
Management & Research Company, 238,840 shares by Fidelity Management Trust Company,
1,188,419 shares by Fidelity International Limited, and 25,000 shares by Geode Capital
Management LLC. FMR Corporation and/or its subsidiaries hold sole voting power over
338,560 shares and sole dispositive power over 3,566,660 shares of Celanese. FMR
Corporation and Fidelity International Limited are of the view that they are not acting as
a group for purposes of Section 13(d) under the Securities and Exchange Act of 1934 (the
1934 Act) and that they are not otherwise required to attribute to each other
the beneficial ownership of securities beneficially owned by the other corporation within
the meaning of Rule 13d-3 promulgated under the 1934 Act.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | According to First
Pacific Advisors, Inc.s Schedule 13G filed with the Commission on February 11, 2003,
First Pacific holds shared voting power over 1,195,650 shares and shared dispositive power
over 3,134,350 shares of Celanese.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

77

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## Related Party Transactions

As
part of Celaneses cash management strategy, short-term borrowings are made
with affiliates. These balances were 96 million and 240 million at
December 31, 2002 and 2001, respectively. As of February 10, 2003, short-term
borrowings from affiliates were 126 million. Interest rates on these
borrowings were adjusted on a short-term basis to reflect market conditions. The
weighted average interest rates on these borrowings were 3.6 percent and 3.5
percent in 2002 and 2001, respectively.

Celanese
has not entered into any material transactions in the last three years in which
any shareholder or member of its management or supervisory boards, or any
associate of any shareholder or member of its management or supervisory boards
has or had any interest. No shareholder or member of its management or
supervisory boards or associate of any shareholder or member of its management
or supervisory boards is or was during the last three years indebted to
Celanese. However, Dresdner Bank Aktiengesellschaft and Goldman, Sachs & Co.
and their subsidiaries provided various financial and investment advisory
services to Celanese in 2002, for which they were paid reasonable and customary
fees. Kendrick R. Wilson, III, Managing Director, Financial Institutions Group
of Goldman Sachs, and Alfons Titzrath, who had been Chairman of the supervisory
board of Dresdner Bank until May 2002, have each been appointed to Celanese
AGs supervisory board as a shareholder representative.

## Item 8. Financial Information

See
Item 18. Financial Statements and pages F-1 through F-57 for Consolidated
Financial Statements and Other Financial Information.

## Export Sales

In
2002, approximately 358 million or 20 percent of all U.S. sales and
approximately 775 million or 60 percent of all German third party sales were export
sales.

## Legal Proceedings

Celanese
is involved in a number of legal proceedings and claims incidental to the normal
conduct of its businesses, relating to such matters as product liability, tax
assessments, competition, past waste disposal practices and release of chemicals
into the environment.

Plumbing Actions

CNA
Holdings, Inc., a Delaware corporation (CNA Holdings), along with
Shell, DuPont and others, have been the defendants in a series of lawsuits
alleging that plastics manufactured by these companies that were utilized in the
production of plumbing systems for residential property were defective or caused
such plumbing systems to fail. Based on, among other things, the findings of
outside experts and the successful use of Ticonas acetal copolymer in
similar applications, CNA Holdings does not believe Ticonas acetal
copolymer was defective or caused the plumbing systems to fail. In many cases
CNA Holdings exposure may be limited by invocation of the statute of
limitations since Ticona ceased selling the acetal copolymer for use in the
plumbing systems in site built homes during 1986 and in manufactured homes
during 1990.

| |  |  | CNA
Holdings has been named a defendant in nine putative class actions, further  described
below, as well as a defendant in other non-class actions filed in ten  states, the U.S.
Virgin Islands, and Canada. In these actions, the plaintiffs  typically have sought
recovery for alleged property damages and, in some cases,  additional damages under the
Texas Deceptive Trade Practices Act or similar type  statutes. Damage amounts have not
been specified. Class certification of  recreational vehicle owners was denied by the
Chancery Court of Tennessee,  Weakley County in July 2001, and cases are proceeding on an
individual basis.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
April 2000, the U.S. District Court for the District of New Jersey denied  class
certification for a putative class action (of insurance companies with  respect to
subrogation claims). The plaintiffs appeal to the Third Circuit  Court of Appeals
was denied in July 2000 and the case was subsequently  dismissed. In September 2000 a
similar putative class action seeking  certification of the same class that was denied
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

78

---



| | in the New Jersey
matter was filed in Tennessee state court. The court denied certification in March 2002,
and plaintiffs are attempting an appeal. Cases are continuing on an individual
basis.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Of
the three putative class actions pending in Canadian courts, one was denied  class
certification while the other two are still pending.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Certification
has been denied in putative class actions pending in South  Carolina and Florida state
courts. Although plaintiffs subsequently sought to  bring actions individually, they were
dismissed and are on appeal.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | The
U.S. District Court for the Eastern District of Texas denied certification  of a putative
class action in March 2002. Plaintiffs are also attempting to  appeal this ruling.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | The
court in a putative class action pending in the U.S. Virgin Islands denied  certification
to a U.S. territories-wide class and dismissed Celanese on  jurisdictional grounds.
Plaintiffs are seeking reconsideration of those rulings.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
order to reduce litigation expenses and to provide relief to qualifying
homeowners, in November 1995, CNA Holdings, DuPont and Shell entered into a
national class action settlement, which has been approved by the courts. The
settlement calls for the replacement of plumbing systems of claimants who have
had qualifying leaks, as well as reimbursements for specified leak damage.
Furthermore, the three companies have agreed to fund these replacements and
reimbursements up to U.S. $950 million (which now amounts to U.S. $1,070
million, due to additional contributions and funding commitments of primarily
other parties). There are additional pending lawsuits in approximately 10
jurisdictions not covered by this settlement; however, these cases do not
involve (either individually or in the aggregate) a large number of homes and
management does not expect the obligations arising from these lawsuits to have a
material adverse effect on CNA Holdings.

In
1995, CNA Holdings and Shell settled the claims relating to individuals in
Texas, owning 110,000 property units, who are represented by a Texas law firm
for an amount not to exceed U.S. $170 million. These claimants are also eligible
for a replumb of their homes in accordance with terms similar to those of the
national class action settlement.

In
addition, a lawsuit filed in November 1989, in Delaware Chancery Court between
CNA Holdings and various of its insurance companies relating to all claims
incurred and to be incurred for the product liability exposure led to a partial
declaratory judgment in CNA Holdings favor. As a result, settlements have
been reached with a majority of CNA Holdings insurers specifying their
responsibility for these claims. However, in January 2000, CNA filed a motion in
Superior State Court in Wilmington, Delaware to set a trial date with respect to
this lawsuit against one insurer, asserting that the settlement is void because
the insurer refused to make the required coverage in place payments
to CNA. In early 2003, the insurer signed an agreement to submit this matter to
binding arbitration. The agreement is currently awaiting court approval.

Management
believes that the plumbing actions are provided for in the Consolidated
Financial Statements and that they will not have a material adverse effect on
the financial position of Celanese. However, if Celanese were to incur an
additional charge for this matter, such a charge may have a material adverse
effect on the results of operations or cash flows in any given accounting
period. No assurance can be given that Celaneses litigation reserves will
be adequate or that Celanese will fully recover claims under its insurance
policies.

Sorbates Antitrust Actions

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

79

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In
January 2003 the European Commission issued a complaint against Hoechst,
Nutrinova Nutrition Specialties & Food Ingredients GmbH and a number of
foreign competitors alleging unlawful, anticompetitive behavior affecting the
European sorbates market. As in the U.S. and Canada, Hoechst and Nutrinova have
cooperated with the European Commissions investigation related to the
sorbates industry. The proceeding is expected to continue at least until the
second half of 2003. Depending on the outcome, fines may be imposed.

In
addition, during 1999 and 2000, nineteen civil antitrust actions, seeking
monetary damages and other relief for alleged conduct involving the sorbates
industry were filed by private parties in U.S. Federal and various state courts
as well as in the Canadian provinces of Ontario and Quebec. During 2000 and
2001, Hoechst and Nutrinova entered into settlement agreements relating to
actions pending in the states of California, Wisconsin, Kansas, New Mexico and
Tennessee. Pursuant to these settlement agreements, all of which have been
approved by the courts, Hoechst and Nutrinova paid a total of approximately U.S.
$6 million. Seven separate actions involving direct purchasers of sorbates had
been filed in the U.S. District Court for the Northern District of California
and were consolidated into a single action in June 1999. In March 2000, the
parties entered into a settlement of this consolidated civil antitrust federal
action. Under the settlement agreement, Hoechst and the named Celanese
subsidiaries paid approximately U.S. $21 million, U.S. $6 million of which was
returned in December 2001 based on the volume of purchases made by companies
that elected to opt out of the class settlement. In late 2001, these opt out
plaintiffs also entered into settlement agreements with Hoechst and the named
Celanese subsidiaries. The remaining private actions are still pending.

In
July 2001 Hoechst and Nutrinova entered into an agreement with the attorneys
general of 33 states, pursuant to which the statutes of limitations were tolled
pending the states investigations. In October 2002, the attorneys general
for New York, Illinois, Ohio, Utah and Idaho filed suit on behalf of indirect
purchasers in their respective states. Each of these actions is in the early
stages of litigation and, in some cases, Hoechst, Nutrinova and the other named
affiliates have not yet been served. In the Fall of 2002, the attorneys general
of Connecticut, Florida, Nevada, South Carolina and Washington gave notice of
intent to take legal action against sorbates manufacturers, but have not yet
done so. Hoechst and Nutrinova have not received any communications from any
other state attorney general, but they may be forthcoming.

Although
the outcome of the foregoing proceedings and claims cannot be predicted with
certainty, Celanese believes that any resulting liabilities, net of amounts
recoverable from Hoechst, will not, in the aggregate, have a material adverse
effect on Celaneses financial position, but may have a material adverse
effect on the results of operations or cash flows in any given period. In the
demerger agreement, Hoechst agreed to pay 80 percent of liabilities that may
arise from the government investigation and the civil antitrust actions related
to the sorbates industry.

Acetic Acid Patent Infringement Matters

On
February 7, 2001, Celanese filed a private criminal action for patent
infringement against certain employees of China Petrochemical Development
Corporation, or CPDC, in the Taiwan Kaohsiung District Court. Celanese is
alleging that CPDCs employees infringed its ROC Patent No. 27572 covering
the manufacture of acetic acid. On February 16, 2001, Celanese filed a
Supplementary Civil Brief in the same court alleging damages against CPDC in the
amount of about U.S. $450 million based on a period of infringement of 10 years,
1991-2000, and based on CPDCs own data and as reported to the Taiwanese
securities and exchange commission. The Celanese ROC patent was held valid by
the Taiwanese Patent Office on March 8, 2001, after 14 months of legal
proceedings before the patent office based on two cancellation actions by CPDC.
In view of the recent changes in the Taiwanese patent laws, the supplementary
civil action has been converted into an independent civil action, and the amount
of damages claimed by Celanese has been reassessed at U.S. $35 million. This
action is still pending.

In
September 1999 Celanese sued Millennium Chemicals, Inc. in the Federal District
Court in Houston, Texas for infringement of its low water acetic
acid process patent. In August 2001, the judge ruled in Celaneses favor in
a Markman hearing, in which the judge construed the claim language
as a matter of law. The parties settled the matter in August 2002 for a
small cash payment and a paid up license, pursuant to which Millennium may use
Celaneses technology in exchange for a royalty at customarily competitive
terms.

80

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## Dividend Policy

The
payment and amount of any dividends depends on Celaneses current and
future earnings, cash flow, financial condition and other factors. Dividends are
subject to recommendation by the Celanese supervisory board and board of
management and the approval of the shareholders at Celaneses annual
general meeting. Under German law, dividends are payable only out of
unappropriated retained earnings as shown in the unconsolidated annual financial
statements of Celanese AG, as adopted and approved by resolutions of the
Celanese board of management and the Celanese supervisory board, not from the
consolidated profits of Celanese.

Holders
of record of Celanese ordinary shares on the date of the general meeting of
shareholders at which a dividend is declared are entitled to receive the
dividend, less any amounts required to be withheld on account of taxes or other
governmental charges. Cash dividends payable to holders of ordinary shares will
be distributed by Deutsche Bank AG as paying agent. In Germany, the payment will
be made to the holders depot bank or other institution holding the shares
for the shareholder which will credit the payment to the shareholders
account. For purposes of distribution in the United States, the dividend will be
paid to Mellon Investor Services as U.S. transfer agent. For shareholders in the
United States, the payment will be converted from euro into U.S. dollars. The
U.S. dollar amounts of dividends received by holders of ordinary shares may be
affected by fluctuations in exchange rates. See Item 3. Key Information
 Exchange Rate Information.

Celanese
did not declare a dividend for the year 2001 because of the reduction in the
unappropriated retained earnings of the unconsolidated financial statements of
Celanese AG as a result of impairment charges taken in 2001. Although the
management and supervisory boards of Celanese will propose that a dividend of
0.44 per share for the year 2002 be declared at the annual general meeting
on April 1, 2003, there can be no assurance as to the payment of dividends or
their particular amounts in future years. The management of Celanese has
indicated that in determining the dividend policy of Celanese, it will consider
what portion of the cash flow generated by Celanese should be paid as dividends
and what portion should be used in other ways to enhance shareholder value, such
as through share repurchases, reduction of debt or capital investments. See
Item 5. Operating and Financial Review and Prospects.

## Significant Changes

On
January 31, 2003, Celanese granted an additional 86,800 stock options under this
plan, at an exercise price of 23.78 per share, to the Board of Management
and key employees. (See Item 6. Directors, Senior Management and Employees
 Incentive Plans.)

## Item 9. The Offer
and Listing

## Nature of Trading Market

In
connection with the demerger, the Celanese shares were listed on the Frankfurt
Stock Exchange and on the New York Stock Exchange. Since the Celanese shares are
in registered form, they were listed directly on the New York Stock Exchange
without the creation of a depositary receipt facility. The Celanese shares trade
on the New York Stock Exchange under the symbol CZ and on the
Frankfurt Stock Exchange under the symbol CZZ, under the German
securities code number (Wertpapierkennnummer) 575 300 and under the
International Securities Identification Number DE 0005753008.

The
transfer agents for Celanese ordinary shares are registrar services GmbH in
Germany or the Transfer Agent and Mellon Investor Services in the United States
or the U.S. Transfer Agent.

Trading on the Frankfurt Stock Exchange

The
Frankfurt Stock Exchange, which is operated by Deutsche Börse AG, is the
most significant of the eight German stock exchanges and accounted for
approximately 96 percent of the turnover in exchange-traded shares in Germany in
2002. As of December 31, 2002, the equity securities of 5,768 corporations,
including 4,901 foreign corporations, were traded on the Frankfurt Stock
Exchange.

81

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Trading
on the floor of the Frankfurt Stock Exchange begins every business day at 9:00
a.m. and ends at 8:00 p.m., Central European Time. Securities listed on the
Frankfurt Stock Exchange are generally traded in the auction market, but they
also change hands in interbank dealer markets.

On
behalf of the Frankfurt Stock Exchange, the Association of Members of the
Frankfurt Stock Exchange (Kursmaklerkammer Frankfurt am Main) publishes
an official daily list of quotations (Amtliches Kursblatt) containing the
fixed prices as well as the yearly high and low prices for all traded
securities.

A
computerized trading system known as Xetra is operated by Deutsche Börse.
Trading may be conducted only by banks and securities dealers who have been
admitted to trading on at least one German stock exchange. Trading through the
Xetra system takes place from 9:00 a.m. to 8:00 p.m., Central European Time, on
each business day. Celanese shares are traded through the Xetra system.

Transactions
on the Frankfurt Stock Exchange, including transactions through the Xetra
system, are settled on the second business day following the trade. Transactions
off the Frankfurt Stock Exchange, such as large trades or trades with a
non-German party, are generally also settled on the second business day
following the trade, although a different period may be agreed to by the
parties. Under the German banks standard terms and conditions for
securities transactions, customers orders for listed securities must be
executed on a stock exchange unless the customer gives specific instructions to
the contrary.

A
quotation can be suspended by the Frankfurt Stock Exchange if orderly trading is
temporarily endangered or if a suspension is deemed to be necessary in order to
protect the public. Trading activities on the German stock exchanges are
monitored by the German Federal Supervisory Authority for Securities Trading
(Bundesaufsichtsamt für den Wertpapierhandel), the respective German
state stock exchange supervisory authorities and the respective supervisory
authorities for securities trading at the individual stock exchanges.

On
October 16, 2002, the Frankfurt Stock Exchange adopted principles relating to a
new equity market segmentation, which went into effect on January 1, 2003.
Companies admitted to the General Standard segment must meet the requirements
set forth under German law. Companies admitted to the Prime Standard segment,
including Celanese, must meet higher, internationally accepted transparency
standards in addition to the German legal requirements.

Celanese
shares have been included in the M-DAX index since March 20, 2000. The M-DAX is
a continuously updated performance index of the lower 50 of the top 80 German
highly capitalized companies. The shares included in the M-DAX are, in
principle, selected on the basis of their stock exchange turnover and their
market capitalization and must comply with the Prime Standard requirements. In
June 2002, the M-DAX switched from a market capitalization-based to a free
float-weighted performance scale to determine the relative weight of the shares.
Celanese did not experience any material change to the weight of its shares in
the M-DAX as a result of this change. Celanese shares have been included in the
Dow Jones Euro STOXXSM 600 index since the end of September 2001. This index
includes the 600 largest European companies ranked by free float market
capitalization and is reviewed quarterly. Celanese has also been part of the
Morgan Stanley International Small Cap Indexes (MSCI Germany Small Cap, MSCI
Europe Small Cap, MSCI World Small Cap) since May 2002. These indices are
reviewed quarterly as well.

82

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The
tables below set forth, for the periods indicated, the high and low sales prices
on the Xetra System for Celanese ordinary shares from October 25, 1999, the
first day on which Celanese ordinary shares officially traded on the Xetra
System, as reported by that exchange.

|                                          | Price PerOrdinary Share |      
|----------------------------------------- | ----------------------- | -----
|
|
|Annual Highs and Lows                     |                         |      
|1999 (from October 25, 1999)              |                         | 18.43
|2000                                      |                         | 25.25
|2001                                      |                         | 28.00
|2002                                      |                         | 27.75
|                                         
|Quarterly Highs and Lows                  |                         |      
|2000                                      |                         |      
|First Quarter                             |                         | 25.10
|Second Quarter                            |                         | 22.90
|Third Quarter                             |                         | 21.80
|Fourth Quarter                            |                         | 21.62
|2001                                      |                         |      
|First Quarter                             |                         | 21.25
|Second Quarter                            |                         | 27.50
|Third Quarter                             |                         | 28.00
|Fourth Quarter                            |                         | 22.00
|2002                                      |                         |      
|First Quarter                             |                         | 25.05
|Second Quarter                            |                         | 27.75
|Third Quarter                             |                         | 24.29
|Fourth Quarter                            |                         | 24.15
|2003                                      |                         |      
|First Quarter (through February 10, 2003) |                         | 22.50

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|                                     | Price PerOrdinary Share |      
|------------------------------------ | ----------------------- | -----
|
|
|Monthly Highs and Lows               |                         |      
|2000                                 |                         |      
|July                                 |                         | 21.80
|August                               |                         | 19.65
|September                            |                         | 20.20
|October                              |                         | 21.00
|November                             |                         | 21.62
|December                             |                         | 20.00
|2001                                 |                         |      
|July                                 |                         | 28.00
|August                               |                         | 25.74
|September                            |                         | 19.82
|October                              |                         | 17.00
|November                             |                         | 21.40
|December                             |                         | 22.00
|2002                                 |                         |      
|July                                 |                         | 24.29
|August                               |                         | 21.05
|September                            |                         | 21.02
|October                              |                         | 19.40
|November                             |                         | 24.15
|December                             |                         | 23.69
|2003                                 |                         |      
|January                              |                         | 22.50
|February (through February 10, 2003) |                         | 22.50

Based
on turnover statistics supplied by both the Frankfurt Stock Exchange and Xetra,
the average daily volume of Celanese ordinary shares traded between January 1,
2002 and December 31, 2002 was 6,630 on the Frankfurt Stock Exchange and 86,403
on Xetra.

On
February 10, 2003 the closing sales price per Celanese ordinary share on the
Xetra System was 18.70, which was equivalent to U.S. $20.08 per ordinary
share, translated at the Noon Buying Rate for euro on such date. See the
discussion under Item 3. Key Information  Exchange Rate
Information with respect to rates of exchange between the dollar and the
euro.

Trading on the New York Stock Exchange

Official
trading of Celanese ordinary shares on the New York Stock Exchange commenced on
October 25, 1999.

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The
following tables set forth, for the periods indicated, the high and low sales
prices per Celanese ordinary share, as reported on the New York Stock Exchange
Composite Tape.

|                                          | Price PerOrdinary Share |      
|----------------------------------------- | ----------------------- | -----
|
|
|Annual Highs and Lows                     |                         |      
|1999 (from October 25, 1999)              |                         | 19.00
|2000                                      |                         | 24.56
|2001                                      |                         | 23.76
|2002                                      |                         | 25.52
|                                         
|Quarterly Highs and Lows                  |                         |      
|2000                                      |                         |      
|First Quarter                             |                         | 24.56
|Second Quarter                            |                         | 21.75
|Third Quarter                             |                         | 20.69
|Fourth Quarter                            |                         | 18.56
|2001                                      |                         |      
|First Quarter                             |                         | 19.94
|Second Quarter                            |                         | 23.44
|Third Quarter                             |                         | 23.76
|Fourth Quarter                            |                         | 19.90
|2002                                      |                         |      
|First Quarter                             |                         | 22.30
|Second Quarter                            |                         | 25.52
|Third Quarter                             |                         | 23.65
|Fourth Quarter                            |                         | 23.58
|2003                                      |                         |      
|First Quarter (through February 10, 2003) |                         | 23.07

|                                     | Price PerOrdinary Share |      
|------------------------------------ | ----------------------- | -----
|
|
|Monthly Highs and Lows               |                         |      
|2001                                 |                         |      
|July                                 |                         | 23.76
|August                               |                         | 23.09
|September                            |                         | 18.43
|October                              |                         | 15.58
|November                             |                         | 18.90
|December                             |                         | 19.90
|2002                                 |                         |      
|July                                 |                         | 23.65
|August                               |                         | 20.50
|September                            |                         | 20.35
|October                              |                         | 18.95
|November                             |                         | 23.58
|December                             |                         | 23.22
|2003                                 |                         |      
|January                              |                         | 23.07
|February (through February 10, 2003) |                         | 21.70

On
February 10, 2003, the closing sales price per Celanese ordinary share on the
New York Stock Exchange as reported on the New York Stock Exchange Composite
Tape was U.S. $20.01.

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## Item 10. Additional Information

## Code of Ethics and Governance Matters

During
the course of 2002, the board of management established a Global Business
Conduct Policy or BCP, which sets forth universal rules of conduct for company
management, as well as for all Celanese employees. The policy requires employees
and management to act honestly and ethically in all their dealings, including
the ethical handling of actual or apparent conflicts of interest. It calls for
full, fair, accurate, timely and understandable disclosure in periodic reports
and public communications and adherence to applicable laws, rules and
regulations. Various help lines have been established so that every Celanese
employee, regardless of where the employee works, can contact a regional
coordinator or the Governance and Risk Officer directly in the event that he or
she would like to voice policy concerns or report policy infringements or risks
affecting Celanese. Further information on BCP processes and the policies can be
found on the website noted below.

Celanese
currently communicates its governance standards internally and externally.
Celanese has introduced its own corporate governance site on its intranet, where
information about the global BCP and Celaneses corporate governance
guidelines can be accessed by every employee. The company has also added a link
on corporate governance issues to its Internet website at
http://www.celanese.com/index/about_index/governance.htm. Information about
Celaneses corporate governance practices, such as the global BCP, its
corporate governance guidelines, the statement of compliance with the German
Corporate Governance Code, as well as any current certifications made by
Celanese or its responsible governing bodies are now available on this site.

## Articles of Association

Organization and Register

Celanese
AG is a stock corporation organized in the Federal Republic of Germany under the
Stock Corporation Act (Aktiengesetz). It is registered in the Commercial
Register (Handelsregister) maintained by the local court in
Königstein im Taunus, Germany, under the entry number HRB 5277.

Objects and Purposes

Section
2 of Celanese AGs Articles of Association states that the company directs,
as a holding company, a group of companies which conduct business, in
particular, in the areas of chemicals and plastics. In addition, the company may
conduct business itself in these or other areas. It is entitled to take all
actions and measures which relate to or which otherwise directly or indirectly
serve its objectives. Celanese AG may also form, acquire or participate in
enterprises, or bring them together under common control, in particular with
regard to enterprises operating in the areas of chemicals and plastics. It is
entitled, mainly for investment purposes, to acquire interests in all kinds of
enterprises. With regard to group companies and other enterprises in which it
holds an interest, Celanese AG may restrict itself to the administration of its
interests, as well as dispose of them.

Management and Supervisory Boards

In
carrying out their duties, members of both the Celanese board of management and
the Celanese supervisory board must exercise the standard of care of a prudent
and diligent businessperson. Both the members of the Celanese board of
management and the members of the Celanese supervisory board owe a duty of
loyalty and care to Celanese, and must act only in the interest of Celanese and
not in his or her own or any third partys interest. The interests of
Celanese are deemed to include the interests of the shareholders, the interests
of the work force and, to some extent, the common interest, and both the
Celanese board of management and the Celanese supervisory board must take all
these interests into account when taking actions or making decisions.

Interested Party Transactions; Loans to Board Members; Compensation

According
to the German Stock Corporation Act, the Celanese supervisory board shall
represent the interests of the company in the event Celanese enters into a
transaction or contract with a member of its board of management. Any service or
consulting agreement between the company and a member of its supervisory board
must be approved by a resolution of the supervisory board. Further, a member of
the management or supervisory

86

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board may not participate in any
resolution that involves a transaction between Celanese and the member, nor the
institution or settlement of legal proceedings between Celanese and the member. A member
of the management or supervisory board who is also a shareholder may not vote his or her
shares on any matter that concerns ratification of his or her own acts or the release of
his or her obligations. Although the German Stock Corporation Act permits companies to
grant certain loans to members of its supervisory board, board or management, or other
executives, as well as to the families of these individuals with supervisory board
approval, the rules of procedure of the Personnel and Compensation Committee of
Celaneses supervisory board may permit the approval of such loans only if they would
not violate U.S. law. Celanese is in compliance with the provisions of the U.S.
Sarbanes-Oxley Act restricting loans to executive officers and directors. Compensation of
supervisory board members requires shareholder approval.

Age Limit

Celanese
AGs Articles of Association do not mandate the retirement of directors
under an age limit requirement. However, the rules of the procedure for the
supervisory boards personnel and compensation committee prohibit the
proposal of candidates for the board of management and the supervisory board who
have reached the ages of 65 and 70, respectively.

Share Ownership Requirement

Celanese
AGs Articles of Association do not require members of its supervisory
board and board of management to be shareholders in the company. However,
Celanese encourages management to purchase Celanese shares by offering members
of its board of management and executives worldwide the right to participate in
an equity participation plan that requires the investment of a defined amount of
money in Celanese shares over a one or two year period since its introduction in
1999. Members of the Celanese board of management have committed to hold their
Celanese shares for at least as long as they are members of the board of
management. Furthermore, Celanese may pay up to half of its supervisory
boards fixed annual compensation in Celanese shares, provided it has
shares available for this purpose.

See
also Item 6. Directors, Senior Management and Employees for further
information about the supervisory and board of management.

Ordinary Shares

The
share capital of Celanese AG consists of 140,069,354 divided into
54,790,369 ordinary shares of no par value issued in registered form, of which
4,731,893 ordinary shares are held by the company as treasury stock. Record
holders of ordinary shares are registered in Celanese AGs share register
(Aktienregister). The share register is administered on behalf of
Celanese AG by Mellon Investor Services as transfer agent and registrar in the
United States, and by registrar services GmbH, as transfer agent and registrar
in Germany.

Celanese
AG also has 3,195,574 in contingent capital. The contingent capital may
only be used to grant stock options to members of the boards of management and
other senior managers of Celanese AG and its subsidiaries.

Dividends

The
board of management prepares and the supervisory board approves the financial
statements for each fiscal year, and both boards recommend the disposition of
all unappropriated retained earnings for approval by shareholders at the annual
general meeting, including the amount of net profits to be distributed as a
dividend. Owners of Celanese AG ordinary shares on the date of the annual
general meeting of shareholders at which a dividend is declared are entitled to
receive the dividend. Under German law, dividends are payable only out of
unappropriated retained earnings as shown in the unconsolidated annual financial
statements of Celanese AG as adopted and approved by resolutions of the Celanese
board of management and the Celanese supervisory board, not from the
consolidated profits of Celanese.

Dividends
are paid to shareholders in proportion to their ownership of the outstanding
capital stock. However, in the event of an increase in capital, the Articles of
Association permit the participation of the new shares in the profits of
Celanese AG to be determined differently from that set forth in Section 60 of
the German Stock Corporation Act, which governs the allocation of dividends.

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Voting Rights

Each
ordinary share entitles the owner to one vote at the general meeting. Cumulative
voting is not permitted under German law. Celanese AGs Articles of
Association provide that all resolutions of the general meeting may be passed by
a simple majority of votes cast and, if a majority of capital is required, by a
simple majority of the share capital represented in the meeting unless otherwise
mandatorily required by law. German law mandatorily requires that the following
matters, among others, be approved by the affirmative vote of 75 percent of the
issued shares present at the shareholders meeting at which the matter is
proposed:

| |  |  | Changing
the objects and purposes provision in the articles of association,
| | - |  | ---------------------------------------------------------------------------

| |  |  | Capital
decreases,
| | - |  | ------------------

| |  |  | Capital
increases in the form of authorized and  conditional capital,
| | - |  | ---------------------------------------------------------------------

| |  |  | Excluding
preemptive rights of shareholders to  subscribe for new shares,
| | - |  | -------------------------------------------------------------------------

| |  |  | Dissolution,
| | - |  | ------------

| |  |  | A
merger into, or a  consolidation with, another stock corporation, and
| | - |  | -----------------------------------------------------------------------

| |  |  | A
transfer of all or  virtually all of the assets.
| | - |  | --------------------------------------------------

Supervisory Board Terms

The
terms of the Celanese AG supervisory board members conclude at the termination
of the annual general meeting that votes on the ratification of their acts for
the fourth business year following the commencement of their term of office, not
counting the business year in which that term begins. Shareholders at the annual
general meeting may elect the shareholders representatives to the
supervisory board to a shorter term. Supervisory board members may also be
re-elected.

Liquidation

If
Celanese AG were to be liquidated, any liquidation proceeds remaining after all
of its liabilities were paid would be distributed to its shareholders in
proportion to their share holdings.

Capital Increases

The
share capital may be increased in consideration of contributions in cash or in
kind, or by establishing authorized capital or contingent capital. Authorized
capital provides the board of management with the flexibility to issue new
shares up to a maximum of 50 percent of the companys stated capital for a
period of up to five years. Contingent capital allows the board of management to
issue new shares up to a maximum of 50 percent of the companys stated
capital for specified purposes, including mergers and the issuance of shares for
convertible bonds. In the case of issuing new shares for employee stock option
plans no more than 10 percent of the companys stated capital may be
authorized. Capital increases require an amendment of the Articles of
Association approved, in the case of an increase in authorized or contingent
capital, by 75 percent of the issued shares present at the shareholders
meeting at which the increase is proposed. The board of management must also
obtain the approval of the supervisory board before issuing new shares out of
authorized capital. Celanese AGs Articles of Association currently contain
provisions for contingent capital, but not for authorized capital; nor do they
contain conditions regarding changes in the share capital that are more
stringent than the law requires.

Redemption

The
share capital may be reduced by an amendment of the Articles of Association
approved by 75 percent of the issued shares present at the shareholders
meeting. Shareholders may also authorize the board of management for a period of
up to 18 months to repurchase up to 10 percent of the issued and outstanding
shares for a specific purpose, such as employee share or option grants or the
cancellation of shares as may be authorized by the shareholders. Such repurchase
authorizations require approval by 50 percent of the issued shares present at
the shareholders meeting unless the repurchased shares are to be used in
such a way that excludes shareholder subscription rights, in which case a
majority of 75 percent of the issued shares present is required.

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Changes in Shareholder Rights

As
a general rule, changes in shareholder rights require approval of all the
shareholders affected. However, for some changes in shareholder rights (such as
changes in the preferential rights of preferred shares), the law only requires a
resolution to be passed by a specific majority of the affected shareholders
present at a general meeting. In addition to such approval from the shareholders
affected, the articles of association must be amended by a resolution of the
majority of the share capital represented at the meeting.

Shareholder Meetings

German
law requires a companys annual general meeting to be held within the first
eight months of each fiscal year. The board of management, supervisory board, or
shareholders owning an aggregate amount of at least 5 percent of the issued
shares may call a meeting of shareholders. There is no minimum quorum
requirement for shareholder meetings. Among other things, the annual general
meeting is asked to approve the appointment of an independent auditor, ratify
the actions of the management and supervisory boards during the prior year,
approve the disposition of unappropriated profit, and, in certain instances,
approve the annual accounts.

According
to Celanese AGs Articles of Association, shareholders listed in the
shareholder register as of the date of the general meeting and who have
indicated their desire to attend the general meeting no later than seven days
prior to the meeting (unless a different period is prescribed by the board of
management) are entitled to attend and vote at the meeting. Shareholders may
also vote by proxy. Unless such proxies are granted to a credit institute or
shareholders association, they may be submitted by mail, telefax, or
electronic media, as determined by the board of management and set forth in the
invitation to the meeting.

The
Articles of Association delegate the responsibility for determining the order of
agenda items, as well as the manner, form and order of voting, to the chairman
of the meeting. The chairman may also allow the transmission of the general
meeting as well as the participation in the general meeting, voting, or the
exercise of other shareholders rights, in each case either directly or by
proxy, by electronic or other media, as permitted by law.

Amendments
to Celanese AGs Articles of Association may be proposed either by the
supervisory board and the board of management, or by a shareholder or group of
shareholders holding at least 195,583 shares.

No Limitation on Foreign Ownership

There
are no limitations under German law or in Celanese AGs Articles of
Association on the right of persons who are not citizens or residents of Germany
to hold or vote ordinary shares in Celanese AG.

Change in Control

There
are no provisions in the Articles of Association that would have an effect of
delaying, deferring or preventing a change in control of Celanese AG and that
would only operate with respect to a merger, acquisition or corporate
restructuring involving it or any of its subsidiaries. German law does not
specifically regulate business combinations with interested shareholders.
However, general principles of German law may restrict business combinations
under some circumstances.

The
German Takeover Act (Wertpapiererwerbs  und Übernahmegesetz),
which became effective on January 1, 2002, standardizes the rules applicable to
public bids for the shares in German public stock corporations. The German
Takeover Act includes, among other things, a set of definitive rules applying to
the companys action in the case of a hostile takeover situation. As a
general rule, the board of management is obliged to remain neutral in such
circumstances. However, the board of management is allowed to proceed with
actions which a prudent (ordentlicher) and conscientious manager of a
company, which is not subject of a takeover offer, would have taken and,
additionally, to seek alternative offers from third parties. Any other actions
of the board of management which may negatively impact the takeover require
either the approval by the shareholders or the consent of the supervisory board.
Approvals by the shareholders may either be granted by an extraordinary general
meeting called in connection with the hostile takeover bid or by way of shelf
resolutions passed before the commencement of such bid. However, such a shelf
resolution is limited to a maximum period of 18 months and requires a three
quarters majority of the present share capital in the general meeting.

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Disclosure of Share Holdings

The
disclosure of shareholdings is governed by the German Securities Trading Act
(Wertpapierhandelsgesetz) and the German Takeover Act. Celanese AG also
complies with the disclosure requirements of the German Corporate Governance
Code.

The
German Securities Trading Act requires holders of voting securities of a company
whose shares are listed on a stock exchange to notify the company and the German
Federal Supervisory Authority for Securities Trading (Bundesaufsichtsamt
für den Wertpapierhandel) of the number of shares they hold if that
number reaches, exceeds or falls below 5 percent, 10 percent, 25 percent, 50
percent and 75 percent of the companys outstanding voting rights.
Moreover, the German Securities Trading Act requires the board of management to
publish this information promptly.

The
German Takeover Act requires any person who directly or indirectly obtains
control over a listed company to publish this fact promptly and submit a
mandatory tender offer for the outstanding shares within four weeks following
the publication. The Takeover Act defines control in the meaning of this
requirement as the holding of at least 30 percent of the voting rights in the
relevant company. See Item 7. Major Shareholders and Related Party
Transactions.

The
German Corporate Governance Code requires members of the board of management and
supervisory board to disclose to the company promptly the purchase and sale of
shares in the company or its consolidated subsidiaries, as well as options or
other instruments thereof. The company must publish this information promptly
thereafter in a suitable electronic information system or in at least one
official stock exchange gazette.

## Material Contracts

As
of September 26, 2002, Madionova GmbH, a wholly-owned subsidiary of Celanese AG,
as buyer, entered into a Master Purchase Agreement with Clariant International
AG, as seller, to purchase Clariants European, U.S. and Canadian emulsions
business and sellers worldwide emulsion powders business, excluding Japan,
including Clariants emulsions and emulsion powders plants in Frankfurt am
Main, Germany, Tarragona, Spain, Perstorp, Sweden, and Koper, Slovenia. The
business was acquired for a purchase price of CHF 213.5 million (147
million) and closed on December 31, 2002. For further information on the
acquisition, see Note 6 to the Consolidated Financial Statements.

## Exchange Controls and Other Limitations Affecting Security Holders

Effective
January 1, 1999, Germany and 10 other member states of the European Monetary
Union or EMU introduced the euro as their common currency and established fixed
conversion rates between their existing sovereign currencies and the euro.
Greece became the twelfth member of the EMU on January 1, 2001. The euro was
only available as deposit money until January 1, 2002, at which time the member
states introduced euro bills and coins. By March 1, 2002, the euro was the sole
legal tender for all member states participating in the EMU, and the national
currencies of those member states were withdrawn from circulation. The euro is a
fully convertible currency. There are, except in limited embargo circumstances,
no legal restrictions in Germany on international capital movements and foreign
exchange transactions. For statistical purposes only, every individual or
corporation residing in Germany must report to the German Central Bank
(Deutsche Bundesbank), any payment (other than those for the import or
export of goods or the payment or repayment of short term loans and deposits)
received from or made to an individual or a corporation resident outside Germany
if such payment exceeds 12,500 or the equivalent in a foreign currency. In
addition, German residents must report any claims against or any liabilities
payable to non-residents if such claims or liabilities, in the aggregate, exceed
approximately 1.5 million or the equivalent in a foreign currency during
any one month. German residents must also report any direct investment outside
Germany if such investment exceeds 10 percent of the total investment (unless
such investment is in a company having total assets of less than 3
million).

Neither
German law nor the Articles of Association of Celanese impose any limitations on
the right of non-resident or non-German owners to hold or vote the Celanese
shares.

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## Taxation

The
following is a discussion of material United States federal income and German
tax consequences to Qualified Holders holding Celanese shares. This discussion
is based upon existing United States federal income and German tax law,
including legislation, regulations, administrative rulings and court decisions,
as in effect on the date of this Annual Report, all of which are subject to
change, possibly with retroactive effect. For purposes of this discussion, in
general, a Qualified Holder means a beneficial owner of Celanese
shares that (1) is a resident of the United States for purposes of the United
States-Germany Income Tax Treaty (the Income Tax Treaty), which
generally includes an individual United States resident, a corporation created
or organized under the laws of the United States, any state thereof or the
District of Columbia and a partnership, estate or trust, to the extent its
income is subject to taxation in the United States as the income of a United
States resident, either in its hands or in the hands of its partners or
beneficiaries, (2) does not hold Celanese shares as part of the business
property of a permanent establishment located in Germany or as part of a fixed
base of an individual located in Germany and used for the performance of
independent personal services, (3) if not an individual, is not subject to the
limitation on benefits restrictions in the Income Tax Treaty and (4) owns,
directly or indirectly, less than 10 percent of the outstanding Celanese shares.
This discussion assumes that the Qualified Holder holds Celanese shares as a
capital asset. This discussion does not address all aspects of United States
federal income and German taxation that may be relevant to all Qualified Holders
in light of their particular circumstances, such as Qualified Holders whose
shares were acquired under the exercise of an employee stock option or otherwise
as compensation or Qualified Holders who are subject to special treatment under
United States federal income tax laws, for example, financial institutions,
insurance companies, tax-exempt organizations and broker-dealers. This
discussion also does not address any aspects of state, local or non-United
States tax law.

EACH
QUALIFIED HOLDER IS STRONGLY URGED TO CONSULT HIS OR HER TAX ADVISORS AS TO THE
UNITED STATES FEDERAL INCOME AND GERMAN TAX CONSEQUENCES OF HOLDING CELANESE
SHARES, INCLUDING THE PARTICULAR FACTS AND CIRCUMSTANCES THAT MAY BE UNIQUE TO
SUCH QUALIFIED HOLDER, AND AS TO ANY OTHER TAX CONSEQUENCES OF HOLDING CELANESE
SHARES.

Taxation of Dividends

Under
German law, German corporations are required to withhold tax on dividends
distributed in 2003 out of prior years profits in an amount equal to 20 percent
of the gross amount paid to resident and nonresident shareholders.*  Subject to
limitations, a partial refund of this 20 percent withholding tax can be obtained
by Qualified Holders under the Income Tax Treaty. Qualified Holders are
generally subject to United States federal income tax on dividends paid by
German corporations. Subject to applicable limitations of United States federal
income tax law, Qualified Holders may be able to claim a foreign tax credit for
German withholding tax on dividends.

In
the case of any Qualified Holder, the German withholding tax on dividends paid
in 2003 is partially refunded under the Income Tax Treaty, effectively reducing
the withholding tax to 15 percent of the gross amount of the dividend. Qualified
Holders are not entitled to the dividends received deduction for United States
federal income tax purposes with respect to dividends paid by non-United States
corporations.

Thus,
for each U.S. $100 of gross dividend paid by Celanese in 2003 to a Qualified Holder, the
dividend after partial refund of the 20 percent withholding tax under the Income Tax
Treaty will be subject to a German withholding tax of U.S. $15. Thus, for each U.S. $100
of gross dividend, the Qualified Holder will include U.S. $100 in gross income and may be
entitled to a foreign tax credit of U.S. $15, subject to applicable limitations of United
States federal income tax law.

Dividends
paid in euro to a Qualified Holder of Celanese shares will be included in income
in a U.S. dollar amount calculated by reference to the exchange rate in effect
on the date the dividends (including any deemed refund of German corporate tax)
are received or treated as received by such holder. If dividends paid in euro
are converted into dollars on the date received or treated as received,
Qualified Holders generally should not be required to recognize foreign currency
gain or loss in respect of each dividend.

---

|* |  | The German corporate
imputation system that had provided German resident individual shareholders with a tax
credit in respect of dividends paid by German corporations was repealed effective with
respect to dividends paid after 2001 out of prior years profits. Consequently,
Qualified Holders are no longer entitled to the additional 5 percent treaty refund with
respect to such dividends that applied in past years. However, the German withholding tax
was reduced from 25 percent to 20 percent with respect to such dividends.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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A
surtax on the German withholding tax is currently levied on dividend
distributions paid by a German resident company. The rate of this surtax is 5.5
percent, which is 1.1 percent (5.5 percent x 20 percent) of the gross dividend
amount. Under the Income Tax Treaty, Qualified Holders are entitled to a full
refund of this surtax.

Refund Procedures

To
claim the refund reflecting the current reduction of the German withholding tax
from 20 percent to 15 percent, and the refund of the 5.5 percent German surtax,
when applicable, a Qualified Holder must submit a claim for refund to the German
tax authorities, with the original bank voucher (or certified copy thereof)
issued by the paying entity documenting the tax withheld within four years from
the end of the calendar year in which the dividend is received. Claims for
refunds are made on a special German claim for refund form, which must be filed
with the German tax authorities: Bundesamt für Finanzen, Friedhofstrasse 1,
53225 Bonn, Germany. The German claim for refund forms may be obtained from the
German tax authorities at the same address where the applications are filed or
from the Embassy of the Federal Republic of Germany, 4645 Reservoir Road, N.W.,
Washington, D.C. 20007-1998.

Qualified
Holders must also submit to the German tax authorities certification of their
last filed United States federal income tax return. That certification is
obtained from the office of the Director of the Internal Revenue Service Center
by filing a request for the certification with the Internal Revenue
Services Philadelphia Service Center, Foreign Certification Request, P.O.
Box 16347, Philadelphia, PA 19114-0447. Requests for certification are to be
made in writing and must include the Qualified Holders name, social
security number or employer identification number, tax return form number and
tax period for which certification is requested. The Internal Revenue Service
(IRS) will send the certification directly to the German tax
authorities if the Qualified Holder authorizes the IRS to do so. This
certification is valid for three years and need only be resubmitted in a fourth
year in the event of a subsequent application for refund.

In
accordance with arrangements under the Sub-Agency Agreement between the Transfer
Agent and the U.S. Transfer Agent relating to Celanese shares traded in the
United States, the Celanese shares held by Qualified Holders will be registered
with the U.S. Transfer Agent, which will receive and distribute dividends to
Qualified Holders of Celanese shares and perform administrative functions
necessary to claim the refund reflecting the current reduction in German
withholding tax from 20 percent to 15 percent, and the refund of the 5.5 percent
German surtax, when applicable, for such Qualified Holders. These arrangements
may be amended or revoked at any time in the future.

The
U.S. Transfer Agent will prepare the German claim for refund forms on behalf of
the Qualified Holders of Celanese shares and file them with the German tax
authorities. In order for the U.S. Transfer Agent to file the claim for refund
forms, the U.S. Transfer Agent will prepare and mail to the Qualified Holders of
those Celanese shares, and those holders will be requested to sign and return to
the U.S. Transfer Agent, (i) a statement authorizing the U.S. Transfer Agent to
perform these procedures and agreeing that the German tax authorities may inform
the IRS of any refunds of German taxes and (ii) a written authorization to remit
the refund of withholding to an account other than that of the Qualified Holder.
Qualified Holders must also submit to the U.S. Transfer Agent certification of
their last filed United States federal income tax return. The U.S. Transfer
Agent will attach the signed statement, the certification and the documentation
issued by the paying agency documenting the dividend paid and the tax withheld
to the claim for refund form and file them with the German tax authorities.

A
simplified refund procedure for Qualified Holders whose Celanese shares are held
through participants of the Depository Trust Company is in effect between the
Depository Trust Company and the German tax authorities. Under this simplified
refund procedure, the Depository Trust Company provides the German tax
authorities with electronic certification of the U.S. taxpayer status of such
Qualified Holders based on information it receives from its participants, and
claims a refund on behalf of those Qualified Holders. Accordingly, Qualified
Holders, using the simplified refund procedure, do not need to file refund claim
forms through the U.S. transfer agent.

The
German tax authorities will issue refunds denominated in euro. In the case of Celanese
shares held by Qualified Holders, the refunds will be issued in the name of the U.S.
Transfer Agent, which will convert the refunds to U.S. dollars and issue corresponding
refund checks to the Qualified Holders of such Celanese shares and brokers. Those brokers,
in turn, will remit corresponding refund amounts to the Qualified Holders holding Celanese
shares registered with such brokers. Qualified Holders of Celanese shares who receive a
refund

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attributable to reduced withholding
taxes under the Income Tax Treaty may be required to recognize foreign currency gain or
loss, which will be treated as ordinary income or loss, to the extent that the U.S. dollar
value of the refund received or treated as received by the Qualified Holder differs from
the U.S. dollar equivalent of the refund on the date the dividend on which such
withholding taxes were imposed was received or treated as received by the Qualified
Holder.

Taxation of Capital Gains

Under
the Income Tax Treaty, a Qualified Holder will not be liable for German tax on
capital gains realized or accrued on the sale or other disposition of Celanese
shares.

Upon
a sale or other disposition of Celanese shares, a Qualified Holder will
recognize capital gain or loss for United States federal income tax purposes
equal to the difference between the amount realized and the Qualified
Holders adjusted tax basis in Celanese shares. In the case of an
individual Qualified Holder of Celanese shares, any such capital gain will be
subject to a maximum United States federal income tax rate of 20 percent, if the
individual Qualified Holders holding period in these Celanese shares is
more than 12 months.

German Gift and Inheritance Taxes

The
United States-Germany estate tax treaty provides that an individual whose
domicile is determined to be in the United States for purposes of such treaty
will not be subject to German inheritance and gift tax (the equivalent of the
United States federal estate and gift tax) on the individuals death or
making of a gift unless the Celanese shares (1) are part of the business
property of a permanent establishment located in Germany or (2) are part of the
assets of a fixed base of an individual located in Germany and used for the
performance of independent personal services. An individuals domicile in
the United States, however, does not prevent imposition of German inheritance
and gift tax with respect to an heir, donee or other beneficiary who is
domiciled in Germany at the time the individual died or the gift was made.

The
United States-Germany estate tax treaty also provides a credit against United
States federal estate and gift tax liability for the amount of inheritance and
gift tax paid in Germany, subject to limitations, in a case where the Celanese
shares are subject to German inheritance or gift tax and United States federal
estate or gift tax.

German Capital Tax (Vermögensteuer)

The
Income Tax Treaty provides that a Qualified Holder will not be subject to German
capital tax with respect to the Celanese shares. As a result of a judicial
decision, the German capital tax presently is not imposed.

United States Information Reporting and Backup Withholding

Dividends
on Celanese shares, and payments of the proceeds of a sale of Celanese shares,
paid within the United States or through U.S.-related financial intermediaries
are subject to information reporting and may be subject to backup withholding at
a 31 percent rate unless the Qualified Holder (1) is a corporation or other
exempt recipient or (2) provides a taxpayer identification number and certifies
that no loss of exemption from backup withholding has occurred.

## Documents on Display

Celanese
furnishes its U.S. shareholders with annual reports in English. These annual
reports include a review of operations and annual audited consolidated financial
statements prepared in conformity with U.S. GAAP. Celanese also furnishes its
U.S. shareholders quarterly reports in English in accordance with U.S. GAAP that
include unaudited interim consolidated financial information. Celanese furnishes
its U.S. shareholders in English all notices of shareholders meetings and
other reports and communications that are made generally available to
shareholders. Celanese transmits the English versions of these notices, reports
and announcements to Mellon Shareholder Services, Celaneses transfer agent
and registrar in New York, New York. The transfer agent arranges for the prompt
mailing of copies of these materials to Celaneses U.S. shareholders. As a
foreign private issuer, Celanese is exempt under the Exchange from the proxy
rules and the short-swing profit recovery provisions of Section 16 of the 1934
Act.

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Celanese
is subject to the informational requirements of the 1934 Act and files reports
and other information with the Commission. Reports and other information filed
by Celanese may be examined, without charge, at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C., 20549, and at the Commissions regional offices located at 175 W.
Jackson Boulevard, Suite 900, Chicago, IL 60604 and The Woolworth Building, 233
Broadway, New York, New York 10279. Copies of such materials are also available
by mail from the Commissions Public Reference Branch at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. More information on the
public reference rooms can be obtained by calling the Commission at
1-800-SEC-0330. The Commission also maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants, such as Celanese, that file electronically with the
Commission. Shares of Celanese are traded on the New York Stock Exchange; the
materials submitted by Celanese to the New York Stock Exchange are also
available for inspection and copying at their offices located at 20 Broad
Street, New York, New York 10005.

## Item 11. Quantitative
and Qualitative Disclosures About Market Risk

The
following tables present information regarding Celaneses use of derivative
financial instruments, and should be read together with Item 5. Operating
and Financial Review and Prospects and Notes 2 and 23 to the Consolidated
Financial Statements.

## Interest-Rate Risk Management

The
following tables provide information about Celaneses use of derivative
financial instruments and other financial instruments that are sensitive to
changes in interest rates as of December 31, 2002. The information is presented
in euro equivalents, which is Celaneses reporting currency, at December
31, 2002 exchange rates.

# Interest-Rate Risk Management  Debt
Principal (Notional) Amount by Expected Maturity
Average Interest Rate
December 31, 2002

|                                | 2003 |  | 2004 |   | 2005 |  | 2006 |   | 2007 |  | Thereafter |   | Total |  | Fair ValueDecember 31,2002 |  
|------------------------------- | ---- |  | ---- | - | ---- |  | ---- | - | ---- |  | ---------- | - | ----- |  | -------------------------- | -
|
|Debt, including current portion |      |  |      |   |      |  |      |   |      |  |            |   |       |  |                            |  
|Fixed rate (U.S. dollar)        |      |  | 1    |   |      |  | 39   |   |      |  | 1          |   |       |  | 1                          |  
|Average interest rate           |      |  | 9.0  | % |      |  | 6.2  | % |      |  | 9.0        | % |       |  | 9.0                        | %
|Variable rate (U.S. dollar)     |      |  | 95   |   |      |  |     |   |      |  | 167        |   |       |  |                           |  
|Average interest rate           |      |  | 1.8  | % |      |  |     |   |      |  | 3.9        | % |       |  |                           |  
|Fixed rate (euro)               |      |  |     |   |      |  |     |   |      |  |           |   |       |  |                           |  
|Average interest rate           |      |  |     |   |      |  |     |   |      |  |           |   |       |  |                           |  
|Variable rate (euro)            |      |  | 96   |   |      |  | 1    |   |      |  | 1          |   |       |  | 1                          |  
|Average interest rate           |      |  | 2.7  | % |      |  | 3.5  | % |      |  | 3.9        | % |       |  | 4.3                        | %
|Other currencies                |      |  | 3    |   |      |  |     |   |      |  |           |   |       |  | 5                          |  
|Total                           |      |  | 195  |   |      |  | 40   |   |      |  | 169        |   |       |  | 7                          |  

For
Celaneses fixed rate and variable rate debt, the table presents principal
amounts and the related weighted average interest rates by expected maturity
date. Weighted average variable rates are based on the respective implied
forward rates at December 31, 2002. For interest rate swaps, the table presents
notional amounts and weighted average interest rates by expected maturity date.
Weighted average variable rates are based on the respective implied forward
rates at December 31, 2002.

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# Interest-Rate Risk Management  Swaps
Principal (Notional) Amount by Expected Maturity
Average Interest (Swap) Rate/Option Strike Price
December 31, 2002

|                                | 2003 |  | 2004 |  | 2005 |  | 2006 |  | 2007 |  | Thereafter |  | Total |  | Fair ValueDecember 31,2002 | 
|------------------------------- | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---------- |  | ----- |  | -------------------------- | 
|
|Interest-rate swaps:            |      |  |      |  |      |  |      |  |      |  |            |  |       |  |                            | 
|U.S. dollar                     |      |  |      |  |      |  |      |  |      |  |            |  |       |  |                            | 
|Payer swap (variable to fixed)  |      |  |     |  |      |  |     |  |      |  | 286        |  |       |  |                           | 
|Average pay rate (fixed)        |      |  |     |  |      |  |     |  |      |  | 5.8%       |  |       |  |                           | 
|Average receive rate (variable) |      |  |     |  |      |  |     |  |      |  | 3.9%       |  |       |  |                           | 

## Foreign-Exchange Risk Management

The
table below provides information about Celaneses significant derivative
financial instruments that are sensitive to changes in exchange rates as of
December 31, 2002. For foreign currency forward contracts related to debt
management and certain sale and purchase transactions denominated in foreign
currencies, the table presents the notional amounts and the weighted average
contractual forward exchange rates. The foreign currency forward contracts
entered into by Celanese have a term of generally less than one year. Celanese
had 955 million notional amount of foreign currency forward contracts
outstanding in various currencies at December 31, 2002. There were no foreign
currency options outstanding as of December 31, 2002.

|Currency Pairs                     | ContractAmountBuy (Sell) |  | AverageContractualForwardExchange Rate |   | Fair ValueDecember 31,2002
|---------------------------------- | ------------------------ |  | -------------------------------------- | - | --------------------------
|
|Foreign Currency Forward Contracts |                          |  |                                        |   |                           
|Euro                               |                          |  |                                        |   |                           
|U.S. dollar                        |                          |  | (901.2                                 | ) |                           
|Japanese yen                       |                          |  | 1.2                                    |   |                           
|British pound                      |                          |  | (10.0                                  | ) |                           
|Canadian dollar                    |                          |  | 41.1                                   |   |                           
|Australian dollar                  |                          |  | (0.3                                   | ) |                           
|Swedish Krona                      |                          |  | 0.6                                    |   |                           
|Danish Krone                       |                          |  | 1.0                                    |   |                           

Most
of the foreign currency forward contracts are currency swaps entered into to
hedge intercompany loans.

## Commodity Risk Management

Celanese
recognized losses of less than 1 million and 2 million from natural
gas swap contracts in 2002 and 2001, respectively. There was no material impact
on the balance sheet at December 31, 2002 and December 31, 2001. The effective
portion of unrealized gains and losses associated with the cash-settled swap
contracts of 1 million and less than 1 million at December 31, 2002
and December 31, 2001, respectively, are recorded as a component of accumulated
other comprehensive income (loss) until the underlying hedged transactions are
reported in earnings. The notional amount of these outstanding swaps at December
31, 2002 is not material.

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The
following measures are taken to avoid and manage risks in the purchase of raw
materials:

| |  |  | Celanese
avoids supply problems by entering into long-term contracts with at  least two suppliers,
when available in regional markets, for each significant  raw material. The quantities
contracted are divided by the suppliers to ensure  supply security and the best cost
option. Celanese enters into long-term  contracts only after a strict evaluation of the
suppliers financial  condition and technical capabilities as well as its
environmental safety record,  so that supply problems and quality risks are reduced to a
minimum.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Price
risks are managed through several measures. Purchasing raw materials both  through
long-term contracts and on spot markets allows Celanese to maintain  security of supply
while allowing for maximum price flexibility. In long-term  contracts, price conditions
generally are based on either changes in production  cost or market conditions.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

## Stock Based Compensation Risk Management

As
of December 31, 1999, Celanese had 1.2 million call options outstanding to
offset the costs associated with the 1999 long-term incentive plan and the 1999
equity participation plan. These options had a maturity of six months, a strike
price of 16.37 per share and an average premium of 3.16 per share.
See Item 6. Compensation of Directors and Officers  Incentive
Plans. The total premium as of December 31, 1999 was 3.8 million.
During 2000, Celanese purchased an additional 3.9 million call options to offset
the costs associated with these plans. These options had a maturity of six
months, a strike price of 16.37 per share and an average premium of
6.46 per share. The total premium as of December 31, 2000 was 25.2
million. The program enabled Celanese to receive shares upon exercise of any
purchased call options. As part of the share buy-back program approved at the
annual general meeting held in May 2000, Celanese used the call options to
purchase 5.1 million shares of treasury stock. At the May 2001 annual general
meeting, Celaneses shareholders authorized an additional share buy-back,
as well as the cancellation of the treasury stock upon the approval of the
supervisory board. The authorization to cancel treasury stock covers existing
treasury stock as well as any shares repurchased pursuant to the share buy-back
authorization approved at the 2001 annual general meeting. German law prohibits
a company to hold more than ten percent of its share capital as treasury stock.
Moreover, German law requires share buy-backs to be paid for out of
distributable reserves or net income (on a parent company basis).
Celaneses 2001 reserves were depleted by impairment charges described in
Item 5. Operating and Financial Review and Prospects  Summary of
Consolidated Results  2002 Compared with 2001  Special
Charges. As of February 10, 2003, Celanese has cancelled
1,125,000 of the treasury stock it holds. Celanese is also in the process of
repurchasing up to 1,031,941 additional shares, of which 430,998 have already
been acquired. Celanese expects to complete this repurchase by the end of April
2003. Celanese bases its decisions whether to repurchase shares on its overall
financial priorities at the time. (See Item 5. Operating and
Financial Review and Prospects  Market Risk.)

During
2001, Celanese purchased call options for one million shares of Celanese stock
to partially offset its exposure of the 2000 LTIP. These options have a maturity
of two years, a strike price of 19.56 per share and an average premium of
4.39 per share. The options allow settlement in cash only. The options had
a market value as of December 31, 2002 of 2 million, which was recorded as
an increase to accumulated other comprehensive income (loss).

## Item 12. Description
of Securities Other Than Equity Securities

Not
applicable.

96

---



# PART II

## Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

## Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None.

## Item 15. Certain Disclosures

## Controls and Procedures

On
January 14, 2003, Celanese performed an evaluation of the effectiveness of the
design and operation of its disclosure controls and procedures. Disclosure
controls and procedures are designed to ensure that the material financial and
non-financial information required to be disclosed in this Annual Report and
filed with the Commission is recorded, processed, summarized and reported in a
timely manner. The evaluation was performed with the participation of
Celaneses key senior management, its financial and legal advisors, and
under the supervision of Celaneses Chief Executive Officer (CEO), Claudio
Sonder, and its Chief Financial Officer (CFO), Perry W. Premdas. Celaneses
management, including the CEO and CFO, concluded that its disclosure controls
and procedures were effective, and that there were no significant deficiencies
in the design or operation of such disclosure controls and procedures, nor
material weaknesses in internal controls. There was no fraud involving
management or other employees who have a significant role in Celaneses
internal controls and procedures for financial reporting. There have been no
significant changes in Celaneses internal controls or in other factors
that could significantly affect internal controls subsequent to the date of the
evaluation. Therefore, no corrective actions were taken.

## Item 16. Reserved

97

---



# PART III

## Item 17. Financial Statements

Not
applicable.

## Item 18. Financial Statements

Reference
is made to Item 19 for a list of all financial statements filed as part of this
Annual Report.

## Item 19. Exhibits

|(a) |  | The following
consolidated financial statements, together with the report of KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, are filed
as part of this Annual Report:
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Index to Consolidated Financial Statements
Report of the Board of Management
Report of Independent Accountants
Consolidated Financial Statements:
Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000
Consolidated Balance Sheets as of December 31, 2002 and 2001
Consolidated Statements of Shareholders Equity for the Years Ended December 31, 2002, 2001 and 2000
Consolidated Statements of Cash Flow for the Years Ended December 31, 2002, 2001 and 2000
Notes to the Consolidated Financial Statements
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All
Schedules are omitted because they are not applicable or because the required
information is contained in the Consolidated Financial Statements or Notes
thereto.

|(b) |  | Documents
filed as exhibits to this Annual Report:
|--- |  | --------------------------------------------------

| | 1.1 |  | English translation of
Articles of Association (Satzung) of Celanese AG as amended to date (filed with the
Commission on October 14, 2002 as an Exhibit to Post-Effective Amendment No. 1 to
Celaneses Registration Statement filed on Form S-8, and incorporated herein by
reference).
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2.1 |  | Form of Definitive
Stock Certificate of Celanese AG (filed as an Exhibit to Celaneses Annual Report on
Form 20-f for the year ended December 31, 1999, and incorporated herein by
reference).
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4.1 |  | Master Purchase
Agreement between Madionova GmbH, as buyer and Clariant International AG, as seller, dated
as of September 26, 2002.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------

| | 4.4 |  | The total amount of
long-term debt securities of Celanese AG or any of its subsidiaries authorized under any
instrument does not exceed 10 percent of the total assets of Celanese on a consolidated
basis. Celanese agrees to furnish the Commission upon request a copy of any instrument
with respect to long-term debt of Celanese AG and any subsidiary for which consolidated or
unconsolidated financial statements are required to be filed and as to which the amount of
securities authorized thereunder does not exceed 10 percent of the total assets of
Celanese AG and its subsidiaries on a consolidated basis.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7.1 |  | Ratio
of Earnings to Fixed Charges
| | --- |  | ----------------------------------

| | 8.1 |  | Significant
subsidiaries as of the end of the year covered by this Annual Report: See Significant
Subsidiaries in Item 4.  Information on the Company.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 |  | Certification
of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the  Sarbanes-Oxley Act of 2002
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 |  | Certification
of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the  Sarbanes-Oxley Act of 2002
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 |  | Celanese
Global Business Conduct Policy
| | ---- |  | ---------------------------------------

| | 23.1 |  | Consent
of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
| | ---- |  | -------------------------------------------------------------------------------------------------

98

---



# SIGNATURES

Pursuant
to the requirements of Section 12 of the Securities Exchange Act of 1934, the
Registrant certifies that it meets all of the requirements for filing on Form
20-F and has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| |  | Celanese AG
(Registrant)
| |  | ------------------------

Date: February 26, 2003

| |  | By: /s/ Claudio Sonder

Name: Claudio Sonder
Title: Chairman of the Board of Management
| |  | ----------------------------------------------------------------------------------------------------------

| |  | By: /s/ Perry W. Premdas

Name: Perry W. Premdas
Title: Member of the Board of Management and
          Chief Financial Officer
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------

99

---



## Certification of Chief Executive Officer

I, Claudio Sonder, certify
that:

1. I have reviewed this Annual
Report on Form 20-F of Celanese AG;

2. Based on my knowledge,
this Annual Report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with
respect to the period covered by this Annual Report;

3. Based on my knowledge,
the financial statements, and other financial information included in this
annual report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the
periods presented in this Annual Report;

4. The registrants
other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and have:

| | (a)
designed such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this Annual
Report is being prepared;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
evaluated the effectiveness of the registrants disclosure controls and procedures as
of a date within 90 days prior to the filing date of this Annual Report (the
Evaluation Date); and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)
presented in this annual report our conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the Evaluation Date;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5. The registrants other
certifying officers and I have disclosed, based on our most recent evaluation, to the
registrants auditors and the audit committee of registrants board of directors
(or persons performing the equivalent function):

| | (a)
all significant deficiencies in the design or operation of internal controls which could
adversely affect the registrants ability to record, process, summarize and report
financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrants internal controls; and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------

6. The registrants
other certifying officers and I have indicated in this annual report whether or
not there were significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: February 26, 2003

| |  | /s/ CLAUDIO SONDER

Claudio SonderChief Executive Officer
| |  | ----------------------------------------------------------------------------

100

---



## Certification of
Chief Financial Officer

I,
Perry W. Premdas, certify that:

1. I
have reviewed this Annual Report on Form 20-F of Celanese AG;

2. Based on my knowledge,
this annual report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with
respect to the period covered by this Annual Report;

3. Based on my knowledge,
the financial statements, and other financial information included in this
Annual Report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the
periods presented in this Annual Report;

4. The registrants
other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and have:

| | (a)
designed such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this Annual
Report is being prepared;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
evaluated the effectiveness of the registrants disclosure controls and procedures as
of a date within 90 days prior to the filing date of this Annual Report (the
Evaluation Date); and
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c)
presented in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation  Date;
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5. The registrants
other certifying officers and I have disclosed, based on our most recent
evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
function):

| | (a)
all significant deficiencies in the design or operation of internal controls  which could
adversely affect the registrants ability to record, process,  summarize and report
financial data and have identified for the  registrants auditors any material
weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)
any fraud, whether or not material, that involves management or other employees  who have
a significant role in the registrants internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------

6. The registrants other
certifying officers and I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date:
February 26, 2003

| |  | /s/ PERRY W. PREMDAS

Perry W. PremdasChief Financial Officer
| |  | --------------------------------------------------------------------------------

101

---



# REPORT
OF THE BOARD OF MANAGEMENT

The
Board of Management of Celanese AG is responsible for the preparation, the
completeness, and the integrity of the consolidated financial statements as well
as for the information contained in the management report of Celanese AG and
subsidiaries (Celanese).

Celanese
has prepared the consolidated financial statements in accordance with United
States generally accepted accounting principles and has applied the exemption of
article 292a HGB.

The
companies included in the consolidated financial statements are required to
maintain orderly accounting records and to establish effective control systems.
These control systems, which our corporate auditing function reviews for
reliability and effectiveness, are intended to enable the Board of Management to
recognize the potential impact of negative factors on Celaneses assets and
developments in a timely fashion. This ensures that the underlying accounting
records correctly reflect all business developments, thereby creating a reliable
basis for the consolidated financial statements.

The
Board of Management runs the company in the interests of its stockholders and in
awareness of its responsibility towards employees and society. Our declared aim
is to employ the resources entrusted to us so as to increase the value of
Celanese.

Pursuant
to a resolution passed at the last General Meeting, the Supervisory Board has
engaged KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft as independent auditors to audit the
consolidated financial statements. A separate long-form audit report in
accordance with German requirements is being prepared by the independent
auditors. The Finance and Audit Committee of the Supervisory Board will examine
the consolidated financial statements including the management report as well as
the audit report during its meeting on the annual financial statements, which
will be attended by the members of the Board of Management and the independent
auditors. Thereafter, the Supervisory Board will review the information relating
to the consolidated financial statements. The results of this review can be
inferred from the report of the Supervisory Board.

Kronberg im Taunus, February 5, 2003

The Board of Management

F-1

---



# INDEX TO
CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                     | Page |     
|---------------------------------------------------------------------------------------------------- | ---- | ----
|Consolidated Financial Statements                                                                    |      |     
|Independent Auditors Report                                                                         |      | F-3 
|Consolidated Statements of Operations for the years ended December 31, 2002, 2001 and 2000           |      | F-4 
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                         |      | F-5 
|Consolidated Statements of Shareholders Equity for the years ended December 31, 2002, 2001 and 2000 |      | F-6 
|Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000           |      | F-7 
|Notes to Consolidated Financial Statements                                                           |      | F-8 
|Consolidated Financial Statement Schedule                                                            |     
|Schedule II  Valuation and Qualifying Accounts                                                      |      | F-57

F-2

---



# INDEPENDENT
AUDITORS REPORT

To the Supervisory Board and Shareholders
Celanese AG:

We
have audited the consolidated financial statements of Celanese AG and
subsidiaries (Celanese) as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we also
have audited the consolidated financial statement schedule as listed in the
accompanying index. These consolidated financial statements and schedule are the
responsibility of Celaneses management. Our responsibility is to express
an opinion on these consolidated financial statements and the consolidated
financial statement schedule based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Celanese as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, the related consolidated financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.

As
discussed in Note 3 to the consolidated financial statements, Celanese adopted
Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets, effective January 1, 2002.

As
discussed in Note 3 to the consolidated financial statements, Celanese has early
adopted SFAS No. 146, Accounting for Costs Associated with Exit or
Disposal Activities, effective October 1, 2002.

As
discussed in Note 19, Celanese changed the actuarial measurement date for its
U.S. pension and other postretirement benefit plans in 2002.

Frankfurt am Main, Germany
February 5, 2003

KPMG Deutsche Treuhand-Gesellschaft
Aktiengesellschaft Wirtschaftsprüfungsgesellschaft

F-3

---



# CELANESE
AG AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF OPERATIONSfor the years ended December 31,

|                                                          | 2002 |  | 2002       |   | 2001 |            | 2000 |           
|--------------------------------------------------------- | ---- |  | ---------- | - | ---- | ---------- | ---- | ----------
|
|Net sales                                                 |      |  | 4,535      |   |      | 4,325      |      | 4,777     
|Cost of sales                                             |      |  | (3,820     | ) |      | (3,643     | )    | (4,132    
|Selling, general and administrative expenses              |      |  | (494       | ) |      | (471       | )    | (552      
|Research and development expenses                         |      |  | (78        | ) |      | (74        | )    | (87       
|Special charges                                           |      |  | 1          |   |      | 1          |      | (496      
|Foreign exchange gain                                     |      |  | 5          |   |      | 5          |      | 2         
|Gain on disposition of assets                             |      |  | 13         |   |      | 12         |      |          
|                                                          |      |  |            |   |      |            |      |           
|Operating profit (loss)                                   |      |  | 162        |   |      | 155        |      | (488      
|                                                         
|Equity in net earnings of affiliates                      |      |  | 23         |   |      | 22         |      | 13        
|Interest expense                                          |      |  | (62        | ) |      | (59        | )    | (80       
|Interest and other income, net                            |      |  | 50         |   |      | 48         |      | 65        
|                                                          |      |  |            |   |      |            |      |           
|Earnings (loss) before income tax, minority interests,    |     
|discontinued operations and cumulative effect of          |     
|changes in accounting principles                          |      |  | 173        |   |      | 166        |      | (490      
|                                                         
|Income tax (provision) benefit                            |      |  | (56        | ) |      | (53        | )    | 126       
|                                                          |      |  |            |   |      |            |      |           
|Earnings (loss) before minority interests,                |     
|discontinued operations and cumulative effect of          |     
|changes in accounting principles                          |      |  | 117        |   |      | 113        |      | (364      
|                                                         
|Minority interests                                        |      |  |           |   |      |           |      |          
|                                                          |      |  |            |   |      |            |      |           
|Earnings (loss) from continuing operations                |      |  | 117        |   |      | 113        |      | (364      
|                                                         
|Earnings (loss) from operation of discontinued operations |     
|(including gain on disposal of discontinued operations    |     
|of 14 million, 14 million and 19 million in 2002,      |     
|2001 and 2000, respectively)                              |      |  | 16         |   |      | 15         |      | (26       
|Income tax benefit (provision)                            |      |  | 42         |   |      | 40         |      | 5         
|                                                          |      |  |            |   |      |            |      |           
|Earnings (loss) from discontinued operations              |      |  | 58         |   |      | 55         |      | (21       
|                                                         
|Cumulative effect of changes in accounting principles,    |     
|net of income tax of 5 million                           |      |  | 20         |   |      | 19         |      |          
|                                                          |      |  |            |   |      |            |      |           
|Net earnings (loss)                                       |      |  | 195        |   |      | 187        |      | (385      
|                                                          |      |  |            |   |      |            |      |           
|Earnings (loss) per common share  basic and diluted:     |     
|Continuing operations                                     |      |  | 2.32       |   |      | 2.25       |      | (7.23     
|Discontinued operations                                   |      |  | 1.15       |   |      | 1.09       |      | (0.42     
|Cumulative effect of changes in accounting principles     |      |  | 0.40       |   |      | 0.38       |      |          
|                                                          |      |  |            |   |      |            |      |           
|Net earnings (loss)                                       |      |  | 3.87       |   |      | 3.72       |      | (7.65     
|                                                          |      |  |            |   |      |            |      |           
|Weighted average shares  basic and diluted               |      |  | 50,329,346 |   |      | 50,329,346 |      | 50,331,847

---

|(1) |  | The
U.S.$ figures are unaudited and have been translated solely for the convenience of the
reader at an exchange rate of U.S.  $1.0485 per 1.00, the noon buying rate of the
Federal Reserve Bank of New York on December 31, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See the accompanying
notes to consolidated financial statements.

F-4

---



# CELANESE
AG AND SUBSIDIARIES

# CONSOLIDATED
BALANCE SHEETSas of December 31,

|                                                                 | 2002 |  | 2002 |       | 2001
|---------------------------------------------------------------- | ---- |  | ---- | ----- | ----
|
|ASSETS                                                           |      |  |      |       |     
|Current assets:                                                  |      | 
|Cash and cash equivalents                                        |      |  |      | 124   |     
|Receivables, net:                                                |      | 
|Trade receivables, net  third party and affiliates              |      |  |      | 700   |     
|Other receivables                                                |      |  |      | 465   |     
|Inventories                                                      |      |  |      | 548   |     
|Deferred income taxes                                            |      |  |      | 84    |     
|Other assets                                                     |      |  |      | 46    |     
|Assets of discontinued operations                                |      |  |      | 3     |     
|                                                                 |      |  |      |       |     
|Total current assets                                             |      |  |      | 1,970 |     
|                                                                 |      |  |      |       |     
|Investments                                                      |      |  |      | 476   |     
|Property, plant and equipment, net                               |      |  |      | 1,700 |     
|Deferred income taxes                                            |      |  |      | 627   |     
|Other assets                                                     |      |  |      | 567   |     
|Intangible assets, net                                           |      |  |      | 1,084 |     
|                                                                 |      |  |      |       |     
|Total assets                                                     |      |  |      | 6,424 |     
|                                                                 |      |  |      |       |     
|LIABILITIES AND SHAREHOLDERS EQUITY                             |      | 
|Current liabilities:                                             |      | 
|Short-term borrowings and current installments of long-term debt |      |  |      | 205   |     
|Accounts payable and accrued liabilities:                        |      | 
|Trade payables  third party and affiliates                      |      |  |      | 601   |     
|Other current liabilities                                        |      |  |      | 691   |     
|Deferred income taxes                                            |      |  |      | 10    |     
|Income taxes payable                                             |      |  |      | 421   |     
|Liabilities of discontinued operations                           |      |  |      | 4     |     
|                                                                 |      |  |      |       |     
|Total current liabilities                                        |      |  |      | 1,932 |     
|                                                                 |      |  |      |       |     
|Long-term debt                                                   |      |  |      | 440   |     
|Deferred income taxes                                            |      |  |      | 55    |     
|Other liabilities                                                |      |  |      | 1,882 |     
|Minority interests                                               |      |  |      | 13    |     
|                                                                
|Shareholders equity:                                            |     
|Common stock, no par value, 140 million and 143 million        |     
|aggregate registered value; 54,790,369 and 55,915,369 shares     |     
|authorized and issued; 50,058,476 and 50,334,891 shares          |     
|outstanding in 2002 and 2001, respectively                       |      |  |      | 146   |     
|Additional paid-in capital                                       |      |  |      | 2,617 |     
|Retained deficit                                                 |      |  |      | (132  | )   
|Accumulated other comprehensive loss                             |      |  |      | (420  | )   
|                                                                 |      |  |      |       |     
|                                                                 |      |  |      | 2,211 |     
|Less: Treasury stock at cost (4,731,893 and 5,580,478 shares     |      | 
|in 2002 and 2001, respectively)                                  |      |  |      | 109   |     
|                                                                 |      |  |      |       |     
|Total shareholders equity                                       |      |  |      | 2,102 |     
|                                                                 |      |  |      |       |     
|Total liabilities and shareholders equity                       |      |  |      | 6,424 |     
|                                                                 |      |  |      |       |     

---

|(1) |  | The
U.S.$ figures are unaudited and have been translated solely for the convenience of the
reader at an exchange rate of U.S.  $1.0485 per 1.00, the noon buying rate of the
Federal Reserve Bank of New York on December 31, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See the accompanying
notes to consolidated financial statements.

F-5

---



# CELANESE
AG AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYfor the years ended December 31, 2002, 2001 and 2000

|                                           | CommonStock |  | AdditionalPaid-inCapital |   | RetainedEarnings(Deficit) |  | AccumulatedOtherComprehensiveIncome (Loss) |   | TreasuryStock |  | TotalShareholdersEquity
|------------------------------------------ | ----------- |  | ------------------------ | - | ------------------------- |  | ------------------------------------------ | - | ------------- |  | ------------------------
|
|Balance at December 31, 1999               |             |  | 143                      |   |                           |  | 2,504                                      |   |               |  | 40                      
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Comprehensive income (loss), net of tax:   |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Net earnings                               |             |  |                         |   |                           |  |                                           |   |               |  | 58                      
|Other comprehensive income (loss):         |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Unrealized gain on securities(1)           |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Foreign currency translation               |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Additional minimum pension liability(2)    |             |  |                         |   |                           |  |                                           |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Other comprehensive income                 |             |  |                         |   |                           |  |                                           |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Comprehensive income                       |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Dividends (0.11 per share)                |             |  |                         |   |                           |  |                                           |   |               |  | (6                      
|Purchase of treasury stock                 |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Call options                               |             |  |                         |   |                           |  | 4                                          |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Balance at December 31, 2000               |             |  | 143                      |   |                           |  | 2,508                                      |   |               |  | 92                      
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Comprehensive income (loss), net of tax:   |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Net loss                                   |             |  |                         |   |                           |  |                                           |   |               |  | (385                    
|Other comprehensive income (loss):         |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Unrealized loss on securities(1)           |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Foreign currency translation               |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Additional minimum pension liability(2)    |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Unrealized loss on derivative contracts(3) |             |  |                         |   |                           |  |                                           |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Other comprehensive loss                   |             |  |                         |   |                           |  |                                           |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Comprehensive loss                         |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Dividends (0.40 per share)                |             |  |                         |   |                           |  |                                           |   |               |  | (20                     
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Balance at December 31, 2001               |             |  | 143                      |   |                           |  | 2,508                                      |   |               |  | (313                    
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Comprehensive income (loss), net of tax:   |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Net earnings                               |             |  |                         |   |                           |  |                                           |   |               |  | 187                     
|Other comprehensive income (loss):         |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Unrealized gain on securities(1)           |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Foreign currency translation               |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Additional minimum pension liability(2)    |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Unrealized loss on derivative contracts(3) |             |  |                         |   |                           |  |                                           |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Other comprehensive loss                   |             |  |                         |   |                           |  |                                           |   |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Comprehensive loss                         |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Amortization of deferred compensation      |             |  |                         |   |                           |  | 3                                          |   |               |  |                        
|Settlement of demerger liability           |             |  |                         |   |                           |  | 7                                          |   |               |  |                        
|Purchase of treasury stock                 |             |  |                         |   |                           |  |                                           |   |               |  |                        
|Retirement of treasury stock               |             |  | (3                       | ) |                           |  | (22                                        | ) |               |  |                        
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         
|Balance at December 31, 2002               |             |  | 140                      |   |                           |  | 2,496                                      |   |               |  | (126                    
|                                           |             |  |                          |   |                           |  |                                            |   |               |  |                         

---

|(1) |  | Net
of taxes of  (1) million, 1 million and 1 million in 2000, 2001 and
2002,  respectively.
|--- |  | -----------------------------------------------------------------------------------------------

|(2) |  | Net
of taxes of  4 million, 145 million and 118 million in 2000, 2001 and
2002,  respectively.
|--- |  | -------------------------------------------------------------------------------------------------

|(3) |  | Net
of taxes of  2 million and 2 million in 2001 and 2002, respectively.
|--- |  | --------------------------------------------------------------------------

See the accompanying
notes to consolidated financial statements.

F-6

---



# CELANESE
AG AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF CASH FLOWfor the years ended December 31,

|                                                                  | 2002 |  |      | 2002 |  |  | 2001 |   |  | 2000 |  
|----------------------------------------------------------------- | ---- |  | ---- | ---- |  |  | ---- | - |  | ---- | -
|
|Operating activities from continuing operations:                  |      |  |      |      |  |  |      |   |  |      |  
|Net earnings (loss)                                               |      |  | 195  |      |  |  | 187  |   |  | (385 | )
|Earnings (loss) from operation of discontinued operations, net(2) |      |  | (43  | )    |  |  | (41  | ) |  | 30   |  
|Gain on disposal of discontinued operations, net of taxes(3)      |      |  | (15  | )    |  |  | (14  | ) |  | (9   | )
|Cumulative effect of changes in accounting principles             |      |  | (20  | )    |  |  | (19  | ) |  |     |  
|Adjustments to reconcile net earnings (loss) to net cash          |      |  |      |      |  |  |      |   |  |      |  
|provided by operating activities:                                 |      |  |      |      |  |  |      |   |  |      |  
|Special charges, net of amounts used                              |      |  | (66  | )    |  |  | (63  | ) |  | 397  |  
|Depreciation and amortization                                     |      |  | 300  |      |  |  | 286  |   |  | 390  |  
|Change in equity of affiliates                                    |      |  | 48   |      |  |  | 46   |   |  | 8    |  
|Deferred income taxes                                             |      |  | 10   |      |  |  | 9    |   |  | (283 | )
|Gain on disposition of assets, net                                |      |  | (13  | )    |  |  | (12  | ) |  | (7   | )
|Writedowns of investments                                         |      |  | 16   |      |  |  | 15   |   |  | 10   |  
|Changes in operating assets and liabilities:                      |      |  |      |      |  |  |      |   |  |      |  
|Trade receivables, net  third party and affiliates               |      |  | (67  | )    |  |  | (64  | ) |  | 284  |  
|Other receivables                                                 |      |  | (19  | )    |  |  | (18  | ) |  | 164  |  
|Inventories                                                       |      |  | 4    |      |  |  | 4    |   |  | 101  |  
|Trade payables  third party and affiliates                       |      |  | 13   |      |  |  | 12   |   |  | (60  | )
|Other liabilities                                                 |      |  | 58   |      |  |  | 55   |   |  | (280 | )
|Income taxes payable                                              |      |  | 3    |      |  |  | 3    |   |  | 159  |  
|Other, net                                                        |      |  | 1    |      |  |  | 1    |   |  | 3    |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Net cash provided by operating activities                         |      |  | 405  |      |  |  | 387  |   |  | 522  |  
|Investing activities from continuing operations:                  |      |  |      |      |  |  |      |   |  |      |  
|Capital expenditures on property, plant and equipment             |      |  | (228 | )    |  |  | (218 | ) |  | (217 | )
|Acquisitions of businesses and purchase of investment             |      |  | (131 | )    |  |  | (125 | ) |  | (2   | )
|(Outflow) proceeds on sale of assets                              |      |  | (16  | )    |  |  | (15  | ) |  | 6    |  
|Proceeds from disposition of businesses and assets                |      |  |     |      |  |  |     |   |  |     |  
|Proceeds and repayments of borrowings from disposal of            |      |  |      |      |  |  |      |   |  |      |  
|discontinued operations                                           |      |  | 211  |      |  |  | 201  |   |  | 38   |  
|Proceeds from sale of marketable securities                       |      |  | 232  |      |  |  | 221  |   |  | 348  |  
|Purchases of marketable securities                                |      |  | (251 | )    |  |  | (239 | ) |  | (298 | )
|Distributions from affiliates                                     |      |  | 43   |      |  |  | 41   |   |  | 4    |  
|Other, net                                                        |      |  | (17  | )    |  |  | (16  | ) |  |     |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Net cash used in investing activities                             |      |  | (157 | )    |  |  | (150 | ) |  | (121 | )
|Financing activities from continuing operations:                  |      |  |      |      |  |  |      |   |  |      |  
|Short-term borrowings, net                                        |      |  | (161 | )    |  |  | (154 | ) |  | (164 | )
|Proceeds from long-term debt                                      |      |  | 60   |      |  |  | 57   |   |  |     |  
|Payments of long-term debt                                        |      |  | (56  | )    |  |  | (53  | ) |  | (192 | )
|Purchase of treasury stock                                        |      |  | (6   | )    |  |  | (6   | ) |  |     |  
|Dividend payments                                                 |      |  |     |      |  |  |     |   |  | (20  | )
|Other, net                                                        |      |  |     |      |  |  |     |   |  |     |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Net cash provided by (used in) financing activities               |      |  | (163 | )    |  |  | (156 | ) |  | (376 | )
|Exchange rate effects on cash                                     |      |  | (8   | )    |  |  | (8   | ) |  | 1    |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Net increase (decrease) in cash and cash equivalents              |      |  | 77   |      |  |  | 73   |   |  | 26   |  
|Cash and cash equivalents at beginning of year                    |      |  | 47   |      |  |  | 45   |   |  | 19   |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Cash and cash equivalents at end of year                          |      |  | 124  |      |  |  | 118  |   |  | 45   |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Net cash provided by (used in) discontinued operations:           |      |  |      |      |  |  |      |   |  |      |  
|Operating activities                                              |      |  | 12   |      |  |  | 11   |   |  | (2   | )
|Investing activities                                              |      |  | (13  | )    |  |  | (12  | ) |  |     |  
|Financing activities                                              |      |  | (2   | )    |  |  | (2   | ) |  |     |  
|                                                                  |      |  |      |      |  |  |      |   |  |      |  
|Net cash used in discontinued operations                          |      |  | (3   | )    |  |  | (3   | ) |  | (2   | )
|                                                                  |      |  |      |      |  |  |      |   |  |      |  

---

|(1) |  | The
U.S.$ figures are unaudited and have been translated solely for the convenience of the
reader at an exchange rate of U.S.  $1.0485 per 1.00, the noon buying rate of the
Federal Reserve Bank of New York on December 31, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes
a tax benefit of 40 million in 2002, a tax expense of 0  million in 2001, and
a tax benefit of 4 million in 2000.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes
tax  expenses of 0 million, 5 million and 19 million in 2002, 2001  and
2000, respectively.
|--- |  | -------------------------------------------------------------------------------------------------------

See the accompanying
notes to consolidated financial statements.

F-7

---



# CELANESE
AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

## 1.
Description of the Company

On
October 22, 1999 (the Effective Date), Celanese AG
(Celanese or the Company), formerly a subsidiary of
Hoechst AG (Hoechst), was demerged from Hoechst and became an
independent publicly traded company. Subsequent to the demerger, Hoechst merged
with Rhône-Poulenc S.A. to form Aventis S.A. (Aventis). In the
demerger, Hoechst distributed all of the outstanding shares of Celaneses
common stock to existing Hoechst shareholders.

Celanese
is a global industrial chemicals company. Its business involves processing
chemical raw materials, such as ethylene and propylene, and natural products,
including natural gas and wood pulp, into value-added chemicals and
chemical-based products. The Celanese portfolio consists of five main business
segments: Acetyl Products, Chemical Intermediates, Acetate Products, Technical
Polymers Ticona and Performance Products.

## 2.
Summary of Accounting Policies

## 
Consolidation principles

The
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States (U.S.
GAAP) for all periods presented and include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. Certain amounts in prior
years have been reclassified to conform to the current year presentation.

## 
Estimates and assumptions

The
preparation of consolidated financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, allocated balances and disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues, expenses and allocated charges
during the reporting period. Actual results could differ from those estimates.

## 
Revenue recognition

Revenue
is recognized when title and risk of loss have been transferred to the customer
and collection of the resulting receivable is reasonably assured, generally at
the time of shipment of products.

## 
Cash and cash equivalents

All
highly liquid investments with original maturities of three months or less are
considered cash equivalents.

## 
Investments in marketable securities

Celanese
has classified its investments in debt and equity securities as
available-for-sale and has reported those investments at their fair
or market values in the balance sheet as other assets. Unrealized gains or
losses, net of the related tax effect on available-for-sale securities, are
excluded from earnings and are reported as a component of accumulated other
comprehensive income (loss) until realized. The cost of securities sold is
determined by using the specific identification method.

A
decline in the market value of any available-for-sale security below cost that
is deemed to be other than temporary results in a reduction in the carrying
amount to fair value. The impairment is charged to earnings and a new cost basis
for the security is established.

F-8

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Financial instruments

Celanese
addresses certain financial exposures through a controlled program of risk
management that includes the use of derivative financial instruments. As a
matter of principle, Celanese does not use derivative financial instruments for
trading purposes. Celanese is party to interest rate swaps as well as foreign
currency forward contracts in the management of its interest rate and foreign
currency exchange rate exposures. Celanese generally utilizes interest rate
derivative contracts in order to fix or limit the interest paid on existing
variable rate debt. Celanese utilizes foreign currency derivative financial
instruments to eliminate or reduce the exposure of its foreign currency
denominated receivables and payables. Additionally, Celanese utilizes derivative
instruments to reduce the exposure of its commodity prices and stock
compensation expense.

Differences
between amounts paid or received on interest rate swap agreements are recognized
as adjustments to interest expense over the life of each swap, thereby adjusting
the effective interest rate on the hedged obligation. Gains and losses on
instruments not meeting the criteria for cash flow hedge accounting treatment,
or that cease to meet hedge accounting criteria, are included as income or
expense.

If
a swap is terminated prior to its maturity, the gain or loss is recognized over
the remaining original life of the swap if the item hedged remains outstanding,
or immediately, if the item hedged does not remain outstanding. If the swap is
not terminated prior to maturity, but the underlying hedged item is no longer
outstanding, the interest rate swap is marked to market and any unrealized gain
or loss is recognized immediately.

Foreign
exchange contracts relating to foreign currency denominated accounts receivable
or accounts payable are accounted for as fair value hedges. Gains and losses on
derivative instruments designated and qualifying as fair value hedging
instruments as well as the offsetting losses and gains on the hedged items are
reported in earnings in the same accounting period. Foreign exchange contracts
for anticipated exposures are accounted for as cash flow hedges. Realized gains
and losses are included in the earnings upon settlement of the contract. The
effective portion of unrealized gains and losses associated with the contracts
are deferred as a component of accumulated other comprehensive income (loss)
until the underlying hedged transactions affect earnings. Derivative instruments
not designated as hedges are marked-to-market at the end of each accounting
period with the results included in earnings.

Celaneses
risk management policy allows the purchase of up to 80 percent of its natural
gas and butane requirements, generally up to 18 months forward using forward
purchase or cash-settled swap contracts to manage its exposure to fluctuating
feed stock and energy costs. Throughout 2002, Celanese entered into natural gas
forward and cash-settled swap contracts for 50 percent of its natural gas
requirements, generally for up to 3 to 6 months forward; however, this amount is
based on past practices and may not be indicative of future requirements. The
fixed price natural gas forward contracts are principally settled through actual
delivery of the physical commodity. The maturities of the cash-settled swap
contracts correlate to the actual purchases of the commodity and have the effect
of securing predetermined prices for the underlying commodity. Although these
contracts are structured to limit Celaneses exposure to increases in
commodity prices, they can also limit the potential benefit Celanese might have
otherwise received from decreases in commodity prices. These cash-settled swap
contracts are accounted for as cash flow hedges. Realized gains and losses are
included in the cost of the commodity upon settlement of the contract. The
effective portion of unrealized gains and losses associated with the
cash-settled swap contracts are deferred as a component of accumulated other
comprehensive income (loss) until the underlying hedged transactions affect
earnings.

Celanese
selectively utilizes call options to offset some of the exposure to variability
in expected future cash flows attributable to changes in the Companys
stock price related to its stock appreciation rights plans. The options are
designated as cash flow hedging instruments. Celanese excludes the time value
component from the assessment of hedge effectiveness. The change in the call
options time value is reported each period in interest expense. The
intrinsic value of the option contracts is deferred as a component of
accumulated other comprehensive income (loss) until the compensation expense
associated with the underlying hedged transactions affect earnings. (See Note 3)

F-9

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Financial instruments  (continued)

Financial
instruments which could potentially subject Celanese to concentrations of credit
risk are primarily receivables concentrated in various geographic locations and
cash equivalents. Celanese performs ongoing credit evaluations of its
customers financial condition. Generally, collateral is not required from
customers. Allowances are provided for specific risks inherent in receivables.

## 
Inventories

Inventories
are stated at the lower of cost or market. Cost is determined using the
first-in, first-out or FIFO method and at certain locations, primarily in the
U.S., the last-in, first-out or LIFO method. Cost includes raw materials, direct
labor and manufacturing overhead.

The
cost  of stores and supplies are valued at cost or market, whichever is lower. Cost is
generally determined by the average cost method.

## 
Investments and equity in net earnings of affiliates

Accounting
Principles Board (APB) Opinion No. 18, The Equity Method of
Accounting for Investments in Common Stock, stipulates that the equity
method should be used to account for investments in corporate joint ventures and
certain other companies when an investor has the ability to exercise
significant influence over operating and financial policies of an investee even
though the investor holds 50 percent or less of the voting stock. APB
Opinion No. 18 considers an investor to have the ability to exercise significant
influence when it owns 20 percent or more of the voting stock of an investee.
Financial Accounting Standards Board (FASB) Interpretation No. 35,
Criteria for Applying the Equity Method of Accounting for Investments in
Common Stock, issued to clarify the criteria for applying the equity method
of accounting to 50 percent or less owned companies, lists circumstances under
which, despite 20 percent ownership, an investor may not be able to exercise
significant influence. Certain investments where Celanese owns greater than a 20
percent ownership and can not exercise significant influence or control are
accounted for under the cost method. Such investments aggregate 71 million
and are included within long-term other assets.

In
accordance with Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets, adopted by the Company
effective January 1, 2002, the excess of cost over underlying equity in net
assets acquired is no longer amortized.

Celanese
assesses the recoverability of the carrying value of its investments whenever
events or changes in circumstances indicate a loss in value that is other than a
temporary decline. See Impairment of property, plant and equipment
for explanation of the methodology utilized.

## 
Property, plant and equipment

Property,
plant and equipment are capitalized at cost. Depreciation is calculated on a
straight-line basis, generally over the following estimated useful lives of the  assets:

|                                     | 
|------------------------------------ | 
|Land Improvements                    | 
|Buildings                            | 
|Buildings and Leasehold Improvements | 
|Machinery and Equipment              | 

Leasehold
improvements are amortized over 10 years or the remaining life of the respective
lease, whichever is shorter.

Repair
and maintenance costs, including costs for planned maintenance turnarounds, that
do not extend the useful life of the asset are charged against earnings as
incurred. Major replacements, renewals and significant improvements are
capitalized.

F-10

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Property, plant and equipment  (continued)

Interest
costs incurred during the construction period of assets are applied to the
average value of constructed assets using the estimated weighted average
interest rate incurred on borrowings outstanding during the construction period.
The interest capitalized is amortized over the life of the asset.

Impairment
of property, plant and equipment Celanese assesses the
recoverability of the carrying value of its property, plant and equipment
whenever events or changes in circumstances indicate that the carrying amount of
the asset may not be fully recoverable. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to the
future net undiscounted cash flows expected to be generated by the asset. If
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying value of the assets exceeds the
fair value of the assets. The estimate of fair value may be determined as the
amount at which the asset could be bought or sold in a current transaction
between willing parties. If this information is not available, fair value is
determined based on the best information available in the circumstances. This
frequently involves the use of a valuation technique including the present value
of expected future cash flows, discounted at a rate commensurate with the risk
involved, or other acceptable valuation techniques. Impairment of property,
plant and equipment to be disposed of is determined in a similar manner, except
that fair value is reduced by the costs to dispose of the assets.

## 
Intangible assets

The
excess of the purchase price over fair value of net identifiable assets and
liabilities acquired (Goodwill) and other intangible assets with
indefinite useful lives, beginning in 2002, are no longer amortized, but instead
tested for impairment at least annually. Patents, trademarks and other
intangibles with finite lives are amortized on a straight-line basis over their
estimated economic or legal lives, whichever is shorter. (See Notes 3 and 12)

Impairment
of intangible assets Prior to January 1, 2002, Celanese
assessed the recoverability of the carrying value of its intangible assets in
the same manner as for property, plant and equipment. See Impairment of
property, plant and equipment. Upon adoption of SFAS No. 142 on January 1,
2002, Celanese assesses the recoverability of the carrying value of its goodwill
and other intangible assets with indefinite useful lives at least annually or
whenever events or changes in circumstances indicate that the carrying amount of
the asset may not be fully recoverable. Recoverability of goodwill is measured
at the reporting unit level based on a two-step approach. First, the carrying
amount of the reporting unit is compared to the fair value as estimated by the
future net discounted cash flows expected to be generated by the reporting unit.
To the extent that the carrying value of the reporting unit exceeds the fair
value of the reporting unit, a second step is performed, wherein the reporting
units assets and liabilities are fair valued. To the extent that the
reporting units carrying value of goodwill exceeds its implied fair value
of goodwill, impairment exists and must be recognized. The implied fair value of
goodwill is calculated as the fair value of the reporting unit in excess of the
fair value of all non-goodwill assets and liabilities allocated to the reporting
unit. (See Note 3)

Recoverability
of other intangible assets with indefinite useful lives is measured by a
comparison of the carrying amount of the intangible assets to the fair value of
the respective intangible assets. Any excess of the carrying value of the
intangible assets over the fair value of the intangible assets is recognized as
an impairment loss. The estimate of fair value is determined similar to that for
goodwill outlined above.

Celanese
assesses the recoverability of patents, trademarks and other intangibles with
finite lives in the same manner as for property, plant and equipment. See
Impairment of property, plant and equipment.

## 
Income taxes

The
provision for income taxes has been determined using the asset and liability
approach of accounting for income taxes. Under this approach, deferred income
taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for

F-11

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Income taxes  (continued)

income tax purposes and net operating loss and tax credit carryforwards. The amount of
deferred taxes on these temporary differences is determined using the tax rates that are
expected to apply to the period when the asset is realized or the liability is settled, as
applicable, based on tax rates, and tax laws, in the respective tax jurisdiction enacted
by the balance sheet date.

## 
Environmental liabilities

Celanese
manufactures and sells a diverse line of chemical products throughout the world.
Accordingly, Celaneses operations are subject to various hazards
incidental to the production of industrial chemicals including the use,
handling, processing, storage and transportation of hazardous materials.
Celanese recognizes losses and accrues liabilities relating to environmental
matters if available information indicates it is probable that a liability has
been incurred and the amount of loss can be reasonably estimated. If a loss is
neither probable nor reasonably estimable, but is reasonably possible, Celanese
provides appropriate disclosure in the notes to its consolidated financial
statements if the contingency is material. Celanese estimates environmental
liabilities on a case-by-case basis using the most current status of available
facts, existing technology and presently enacted laws and regulations.
Environmental liabilities for which the remediation period is fixed and
associated costs are readily determinable are recorded at their net present
value. (See Note 25)

## 
Minority interests

Minority
interests in the equity and results of operations of the entities controlled by
Celanese are shown as a separate item in the consolidated financial statements.
The entities included in the consolidated financial statements that have
minority interests at December 31, 2002 are as follows:

|                                   | OwnershipPercentage |    
|---------------------------------- | ------------------- | ---
|InfraServ GmbH & Co. Oberhausen KG |                     | 84%
|Synthesegasanlage Ruhr GmbH        |                     | 50%

Celanese
has a 60 percent voting interest and the right to appoint a majority of the
board of management of Synthesegasanlage Ruhr GmbH, which results in Celanese
controlling this entity and, accordingly, Celanese consolidates this entity in
its consolidated financial statements.

## 
Research and development

The
costs of research and  development are charged as an expense in the period in which they
are incurred.

## 
Functional currencies

For
most of Celaneses international operations where the functional currency
is other than the euro, assets and liabilities are translated using period-end
exchange rates, while the statement of operations amounts are translated using
the average exchange rates for the respective quarterly period. Differences
arising from the translation of assets and liabilities in comparison with the
translation of the previous periods or from initial recognition during the
period are included as a separate component of accumulated other comprehensive
income (loss).

## 
Earnings per share

Basic
earnings per share is based on the net earnings divided by the weighted average
number of common shares outstanding during the period. Diluted earnings per
share is based on the net earnings divided by the weighted average number of
common shares outstanding during the period adjusted to give effect to common
stock equivalents. For all periods presented, Celanese had no dilutive common
stock equivalents.

F-12

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Stock-based compensation

Upon
issuance of stock options in 2002, Celanese adopted the fair value provisions of
SFAS No. 123, Accounting for Stock-based Compensation. There was no
impact upon adoption. This statement prescribes a fair value based method of
accounting for an employee stock option or similar equity instrument and
encourages all entities to adopt that method of accounting for all of their
employee stock compensation plans.

Under
the fair value based method, compensation cost is measured at the grant date
based on the value of the award and is recognized over the service period, which
is usually the vesting period. Accordingly, compensation expense for stock
options is determined using the Black-Scholes option-pricing model that takes
into account the stock price at the grant date, the exercise price, the expected
life of the option, the volatility and the expected dividends of the underlying
stock, and the risk-free interest rate over the expected life of the option.
Compensation expense for stock options is recorded over the expected life of the
options. Accordingly, compensation expense has been recognized for stock options
in the accompanying consolidated financial statements. (See Note 21)

Compensation
expense for stock appreciation rights, either partially or fully vested, is
recorded based on the difference between the base unit price at the date of
grant and the quoted market price of Celaneses common stock on the
Frankfurt Stock Exchange at the end of the period proportionally recognized over
the vesting period and adjusted for previously recognized expense. (See Note 21)

## 
Captive insurance companies

Celanese
consolidates two wholly-owned insurance companies (the Captives).
The Captives are a key component of the Companys global risk management
program as well as a form of self-insurance for property, liability and
workers compensation risks. The Captives issue insurance policies to
Celanese subsidiaries to provide consistent coverage amid fluctuating costs in
the insurance market and to lower long-term insurance costs by avoiding or
reducing commercial carrier overhead and regulatory fees. The Captives issue
insurance policies and coordinate claims handling services with third party
service providers. They retain risk at levels approved by the Board of
Management and obtain reinsurance coverage from third parties to limit the net
risk retained. One of the Captives also insures certain third party risks. Third
party premiums earned are shown below.

F-13

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Captive insurance companies  (continued)

Summarized
financial  data, excluding intercompany activity, appear below.

|                                                             | As of December 31, |    
|------------------------------------------------------------ | ------------------ | ---
|
|
|Balance Sheets                                               |                    |    
|Assets                                                       |                   
|Reinsurance and Losses Receivable                            |                    | 213
|Prepaid Insurance Premiums                                   |                    | 27 
|Other Current Assets                                         |                    | 8  
|                                                             |                    |    
|Total Current Assets                                         |                    | 248
|Marketable Securities                                        |                    | 135
|Other Long-Term Assets                                       |                    | 1  
|                                                             |                    |    
|Total Assets                                                 |                    | 384
|                                                             |                    |    
|                                                             |                    |    
|Liabilities                                                  |                   
|Insurance Loss Reserves for Third Party and Internal Matters |                    | 137
|Other Current Liabilities                                    |                    | 6  
|                                                             |                    |    
|Total Current Liabilities                                    |                    | 143
|Insurance Liabilities for Third Party and Internal Matters   |                    | 169
|                                                             |                    |    
|Total Liabilities                                            |                    | 312
|                                                             |                    |    
|Equity                                                       |                    | 72 
|                                                             |                    |    

|                         | For the Years EndedDecember 31, |    
|------------------------ | ------------------------------- | ---
|
|
|Statements of Operations |                                 |    
|Third Party Premiums     |                                 | 30 
|Losses                   |                                 | (42
|Interest Income          |                                 | 7  
|Dividend Income          |                                 | 24 
|Other Income/(Expense)   |                                 | (7 
|Income Tax Expense       |                                 | (7 
|                         |                                 |    
|Net Income               |                                 | 5  
|                         |                                 |    

The
assets of the Captives consist primarily of marketable securities and
reinsurance receivables. Marketable securities values are based on quoted market
prices or dealer quotes. The carrying value of the amounts recoverable under the
reinsurance agreements approximate fair value due to the short-term nature of
these items.

F-14

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 2.
Summary of Accounting Policies  (continued)

## 
Captive insurance companies  (continued)

The
liabilities recorded by the Captives relate to the estimated risk of loss
recorded by the Captives, which is based on management estimates and actuarial
valuations, and unearned premiums, which represent the portion of the premiums
written applicable to the unexpired terms of the policies inforce. The
establishment of the provision for outstanding losses is based upon known facts
and interpretation of circumstances influenced by a variety of factors. In
establishing a provision, management considers facts currently known and the
current state of laws and litigation where applicable. Liabilities are
recognized for known claims when sufficient information has been developed to
indicate involvement of a specific policy and management can reasonably estimate
its liability. In addition, liabilities have been established to cover
additional exposure on both known and unasserted claims. Estimates of the
liabilities are reviewed and updated regularly.

The
Captives use reinsurance arrangements to reduce their risk of loss. Reinsurance
arrangements, however, do not relieve the Captives from their obligations to
policy holders. Failure of the reinsurers to honor their obligations could
result in losses to the Captives. The Captives evaluate the financial condition
of their reinsurers and monitor concentrations of credit risk to minimize their
exposure to significant losses from reinsurer insolvencies and establish
allowances for amounts deemed uncollectible.

Premiums
written are recognized as based on the terms of the policies. Capitalization of  the
Captives is determined by regulatory guidelines.

## 
Accounting for purchasing agent agreements

CPO
Celanese Aktiengesellschaft & Co. Procurement Olefin KG, Frankfurt am Main
(CPO), a wholly-owned subsidiary of Celanese, acts as a purchasing
agent on behalf of Celanese as well as third parties. CPO arranges sale and
purchase agreements for raw materials on a commission basis. Accordingly, the
commissions earned on these sales are classified as a reduction to selling,
general and administrative expense. Commissions amounted to 5 million,
15 million and 10 million in 2002, 2001 and 2000, respectively. The
raw material sales volume commissioned by CPO for third parties amounted to
465 million, 534 million and 554 million in 2002, 2001 and
2000, respectively.

## 
New accounting pronouncements

In
June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No.143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and
associated asset retirement costs. The statement applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development, and normal operation of long-lived
assets. The statement requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred. The
asset retirement obligation will be capitalized as part of the carrying amount
of the long-lived asset. The liability is accreted at the end of each period
through charges to operating expense. If the obligation is settled for other
than the carrying amount of the liability, a gain or loss is recognized on
settlement.

Celanese
will adopt this statement effective January 1, 2003. Upon adoption, Celanese
will recognize transition amounts for existing asset retirement obligations,
associated capitalizable costs and accumulated depreciation.

F-15

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 3.
Accounting Changes

Accounting
Changes Adopted in 2002

In
2002, Celanese recorded income of 19 million for the cumulative effect of
two accounting changes. This amount consisted of income of 10 million
(0.20 per share) from the implementation of SFAS No. 142, as disclosed
below, and income of 9 million, net of income taxes of 5 million
(0.18 per share), as a result of the change in the measurement date of
Celaneses U.S. benefit plans. (See Note 19)

Effective
January 1, 2002, Celanese adopted SFAS No. 142, Goodwill and Other Intangible
Assets, and accordingly applied the standards of the statement
prospectively. This statement addresses financial accounting and reporting for
acquired goodwill and other intangible assets and provides that goodwill and
some intangibles no longer be amortized on a recurring basis. Instead, goodwill
and intangible assets with an indefinite life are subject to an initial
impairment test within six months of adoption of SFAS No. 142 and at least
annually thereafter.

As
of January 1, 2002, Celanese had goodwill with a net carrying value of
1,162 million that was subject to the transition provision of SFAS No.
142. During the first half of 2002, Celanese performed the required impairment
tests of goodwill as of January 1, 2002 and determined that there was no
impairment. Other intangible assets with finite lives continue to be amortized
over their useful lives and reviewed for impairment.

Additionally,
SFAS No. 142 requires that any unamortized negative goodwill (excess of fair
value over cost) on the balance sheet be written off immediately and classified
as a cumulative effect of change in accounting principle in the consolidated
statement of operations. As a result, income of 10 million was recorded to
cumulative effect of changes in accounting principles in Celaneses
consolidated statement of operations in the first quarter of 2002.

The
following table presents the impact of adopting SFAS No. 142 on net earnings
(loss) and net earnings (loss) per share:

|                                                      | For the Years Ended December 31, |      
|----------------------------------------------------- | -------------------------------- | -----
|
|
|Reported net earnings (loss)                          |                                  | 187  
|Adjustment for goodwill amortization                  |                                  |     
|Adjustment for negative goodwill                      |                                  | (10  
|                                                      |                                  |      
|Adjusted net earnings (loss)                          |                                  | 177  
|                                                      |                                  |      
|                                                     
|Earnings (loss) per common share  basic and diluted: |                                 
|Reported net earnings (loss)                          |                                  | 3.72 
|Goodwill amortization                                 |                                  |     
|Negative goodwill                                     |                                  | (0.20
|                                                      |                                  |      
|Adjusted net earnings (loss)                          |                                  | 3.52 
|                                                      |                                  |      

Celanese
	adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, on
January 1, 2002, and accordingly applied the standards of the statement prospectively.
SFAS No. 144 supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
	and for Long-Lived Assets to Be Disposed Of. The statement also supersedes APB No. 30,
Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a
	Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
This statement establishes a single accounting model to test impairment, based on the
framework established in SFAS No. 121, for long-lived assets to be disposed of by sale.
The statement retains most of the requirements in SFAS No. 121 related to the recognition
of impairment of long-lived assets to be held and used. Additionally, SFAS No. 144 extends
the applicability to discontinued operations, and broadens the presentation of
discontinued operations to include a component of an entity. The adoption of SFAS No. 144
did not have a material effect on Celaneses consolidated financial statements.

F-16

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 3.
Accounting Changes  (continued)

Effective
October 2002, Celanese early adopted SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, and accordingly applied the
statement prospectively to exit or disposal activities initiated after September
30, 2002. SFAS No. 146 addresses financial accounting and reporting for costs
associated with exit or disposal activities. The statement nullifies Emerging
Issues Task Force (EITF) Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The principal
difference between SFAS No. 146 and EITF Issue No. 94-3 relates to the criteria
for recognition of a liability for a cost associated with an exit or disposal
activity.

SFAS
No. 146 requires recognition only when the liability is incurred. In contrast, under EITF
Issue No. 94-3, a liability was recognized when the Company committed to an exit plan.
Additionally, SFAS No. 146 stipulates that the liability be measured at fair value and
adjusted for changes in cash flow estimates.

In
November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others(FIN No. 45), which
addresses the disclosure to be made by a guarantor in its interim and annual
financial statements about its obligations under guarantees. These disclosure
requirements are included in Note 24. FIN No. 45 also requires the recognition
of a liability by a guarantor at the inception of certain guarantees entered
into or modified subsequent to adoption.

FIN
No. 45 requires the guarantor to recognize a liability for the non-contingent
component of the guarantee, this is the obligation to stand ready to perform in
the event that specified triggering events or conditions occur. The initial
measurement of this liability is the fair value of the guarantee at inception.
The recognition of a liability is required even if it is not probable that payments
will be required under the guarantee or if the guarantee was issued with a
premium payment or as part of a transaction with multiple elements. As noted
above, Celanese has adopted the disclosure requirements of FIN No. 45 and will
apply the recognition and measurement provisions for all guarantees entered into
or modified after December 31, 2002.

Accounting
Changes Adopted in 2001

Celanese
adopted SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, amended by SFAS No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities, on January 1, 2001, and
accordingly applied the standards of the statements prospectively. These
statements standardized the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts. Under the standards,
entities are required to carry all derivative instruments in the statements of
financial position at fair value. The accounting for changes in the fair value
(i.e. gains or losses) of a derivative instrument depends on whether it has
been designated and qualifies as part of a hedging relationship, and, if so, on
the reason for holding it. If certain conditions are met, entities may elect to
designate a derivative instrument as a hedge of exposure to changes in fair
values, cash flows, or foreign currencies. If the hedged exposure is a fair
value exposure, the gain or loss on the derivative instrument is recognized in
earnings in the period of change together with the offsetting gain or loss on
the hedged item attributable to the risk being hedged. If the hedged exposure is
a cash flow exposure, the effective portion of the gain or loss on the
derivative instrument is reported initially as a component of other
comprehensive income (loss) and subsequently reclassified into earnings when the
forecasted transaction affects earnings. Any amounts excluded from the
assessment of hedge effectiveness as well as the ineffective portion of the gain
or loss is reported in earnings immediately. Accounting for foreign currency
hedges is similar to the accounting for fair value and cash flow hedges. If the
derivative instrument is not designated as a hedge, the gain or loss is
recognized in earnings in the period of change.

Upon adoption, Celanese
recorded a net transition adjustment gain of 8 million, net of related
income tax of 4 million, in accumulated other comprehensive income (loss)
at January 1, 2001. Further, the adoption of these statements resulted in
Celanese recognizing 14 million of derivative instrument assets and
2 million of derivative liabilities. The effect of the ineffective portion
of the derivatives on the consolidated statement of operations was not material.

F-17

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 3.
Accounting Changes  (continued)

Celanese
adopted SFAS No. 141, Business Combinations, on June 30, 2001, and
accordingly applied the standards of the statement prospectively. Under this new
standard, all acquisitions subsequent to June 30, 2001 must be accounted for
under the purchase method of accounting. SFAS No. 141 also establishes criteria
for the recognition of intangible assets apart from goodwill. The adoption of
SFAS No. 141 did not have a material effect on Celaneses consolidated
financial statements.

## 4.
Supplemental Cash Flow Information

|                                                                   | For the Years Ended December 31, |   
|------------------------------------------------------------------ | -------------------------------- | --
|
|
|Cash paid during the year for:                                     |                                  |   
|Taxes, net of refunds                                              |                                  | 30
|Interest, net of amounts capitalized                               |                                  | 48
|Noncash investing and financing activities:                        |                                 
|Fair value adjustment to securities available-for-sale, net of tax |                                  | 2 
|Settlement of demerger liability (See Note 20)                     |                                  | 7 

## 5.
Transactions and Relationships with Affiliates

Celanese
is a party to various transactions with affiliated companies. Companies for
which Celanese has investments accounted for under the cost or equity method of
accounting are considered Affiliates; any transactions or balances with such
companies are considered Affiliate transactions. The following tables represent
Celaneses transactions with Affiliates, as defined above, for the periods
presented.

|                                    | 2002 |    | 2001 |    | 2000 |    
|----------------------------------- | ---- | -- | ---- | -- | ---- | ---
|
|Statements of Operations            |      |    |      |    |      |    
|Purchases from Affiliates(1)        |      | 78 |      | 76 |      | 110
|Sales to Affiliates(1)              |      | 75 |      | 41 |      | 68 
|Interest income from Affiliates     |      | 1  |      | 3  |      | 3  
|Interest expense paid to Affiliates |      | 7  |      | 13 |      | 15 

|                                                              | 2002 |     | 2001 |    
|------------------------------------------------------------- | ---- | --- | ---- | ---
|
|Balance Sheets                                                |      |     |      |    
|Trade and other receivables from Affiliates                   |      | 11  |      | 10 
|Current notes receivable (including interest) from Affiliates |      | 9   |      | 11 
|Long-term notes receivable from Affiliates                    |      |    |      | 9  
|                                                              |      |     |      |    
|Total receivables from Affiliates                             |      | 20  |      | 30 
|                                                              |      |     |      |    
|                                                             
|Accounts payable and other liabilities due Affiliates         |      | 25  |      | 36 
|Accrued interest payable due Affiliates                       |      |    |      | 1  
|Short-term borrowings from Affiliates(2)                      |      | 96  |      | 239
|                                                              |      |     |      |    
|Total due Affiliates                                          |      | 121 |      | 276
|                                                              |      |     |      |    

(1)  Purchases/Sales from/to
		Affiliates

Purchases
and sales from/to Affiliates are accounted for at prices approximating those  charged to
third party customers for similar goods or services.

(2) Short-term borrowings from
		Affiliates (See Note 15)

The
2002  and 2001 balances reflect Celaneses short-term borrowings from Affiliates,
the terms of which are based on current market conditions.

F-18

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 6.
Acquisitions and Divestitures

Celanese
completed the following acquisitions of businesses during 2002:

| |  |  | On
December 31, 2002, Celanese acquired Clariant AGs European emulsions
and worldwide emulsion powders businesses, valued at 147 million,
including the assumption of related liabilities. Net of purchase price
adjustments of 2 million and the assumption of liabilities of 20
million, Celanese paid 125 million cash for the net assets of the
business. This new addition to the Acetyl Products segment will enable Celanese
to offer a comprehensive range of value-added emulsions and emulsion powders
that serve as the primary ingredients in quality surface coatings, adhesives,
non-woven textiles and other applications. The emulsions and emulsion powders
business has four production facilities servicing the unique product
requirements of customers across Europe. There are also 11 sales offices and
seven research and technology centers, all strategically located to provide
rapid response to customers. Two of the production facilities are located in
Germany and Spain, in close proximity to Celanese plants that supply chemical
ingredients for emulsions. The acquisition was accounted for using the purchase
method and as a result of this transaction, Celanese recorded excess purchase
price over fair value of net assets acquired of 33 million. Additionally,
Celanese acquired an estimated 20 million of intangible assets related to
this acquisition. The preliminary purchase price allocations are subject to
adjustments in 2003 when the purchase price allocation is finalized.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
completed the following acquisitions of businesses during 2000:

| |  |  | In May 2000, Celanese acquired 100 percent of Axiva GmbH, a process technology
and engineering business, from Aventis for a purchase price of 38 million.
Pursuant to the purchase agreement, Aventis, under certain conditions, shared in
the funding of the Fuel Cell project or the research and development project
focusing on polyunsaturated fatty acids, and is entitled to additional
consideration in the event Celanese sells these projects. The acquisition was
accounted for using the purchase method and accordingly, the results of
operations from the date of acquisition through December 31, 2000 are included
in the accompanying consolidated financial statements. In October 2000, Celanese
sold 75 percent of the process technology and engineering business of Axiva GmbH
to Siemens AG and retained selected projects, which it continues to operate in
the process technology entity, which was renamed Celanese Ventures GmbH.
Celanese received gross proceeds of 10 million on the sale. There was no
material effect on the consolidated statement of operations in 2000.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In September 2000, Celanese completed the acquisition of the polyvinyl alcohol
(PVOH) business of Air Products and Chemicals, Inc. for U.S. $326
million (359 million). As a result of this transaction, Celanese recorded
goodwill of U.S. $52 million (56 million). Celanese completed the purchase
price allocation in June 2001, and as a result reduced its original goodwill by
4 million.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
made the following divestitures during 2002:

| |  |  | Effective January 1, 2002, Celanese sold its interest in InfraServ GmbH &
Co. Deponie Knapsack KG (Deponie) to Trienekens AG. Celanese
recorded a net cash outflow of 23 million on the sale of this business,
which included cash of 40 million offset by proceeds received of 17
million, and a gain of 10 million on disposition of Deponie included in
gain on disposition of assets.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In December 2002, Celanese completed the sale of Trespaphan, its global oriented
polypropylene (OPP) film business, to a consortium consisting of
Dor-Moplefan Group and Bain Capital, Inc. for a value of 209 million. Net
of the purchase price adjustments of 19 million and the repayment of
78 million in intercompany debt that Trespaphan owed Celanese AG, Celanese
received net proceeds of 112 million. Trespaphan was formerly part of
Celaneses Performance Products segment. The transaction is reflected as a
component of discontinued operations in the consolidated financial statements in
accordance with SFAS No. 144.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | During
2002, Celanese sold its global allylamines and U.S. alkylamines businesses to U.S. Amines
Ltd. This business is  reflected as a component of discontinued operations in the
consolidated financial statements in accordance with SFAS No.  144.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-19

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 6.
Acquisitions and Divestitures  (continued)

In
2002, Celanese received net proceeds of 100 million and recorded 15
million in earnings (loss) from operation of discontinued operations (including
a gain on disposal of discontinued operations of 14 million) and a gain of
10 million in gain on disposition of assets relating to these
divestitures. Additionally, Celanese recognized a tax benefit of 40
million for discontinued operations, which includes a tax benefit associated
with a tax deductible writedown of the tax basis for Trespaphans
subsidiary in Germany relating to tax years ended December 31, 2000 and 2001.
Since this tax benefit relates to an entity solely engaged in a business
designated as discontinued operations in the 2002 financial statements, this tax
benefit has been correspondingly included in earnings (loss) from discontinued
operations. Relating to these divestitures, Celanese adjusted 2001 and 2000
earnings by reclassifying pre-tax losses of 40 million and 3
million, respectively, to earnings (loss) from discontinued operations.

Additionally,
Celanese recognized tax benefits of 10 million and 4 million in 2001
and 2000, respectively, related to these divestitures and recorded these in
income tax benefit (expense) of discontinued operations.

Celanese completed the following
divestitures during 2001:

| |  |  | In
January 2001, Celanese sold its investment in InfraServ GmbH & Co. Münchsmünster KG to
Ruhr Oel GmbH. (See Note 10)
| | - |  | ----------------------------------------------------------------------------------------------------------------------

| |  |  | In
January 2001, Celanese sold its CelActiv and Hoecat® catalyst  business to
Synetix.
| | - |  | ---------------------------------------------------------------------------------------

| |  |  | In
April 2001, Celanese sold NADIR filtration GmbH, formerly Celgard GmbH, to
KCS Industrie Holding AG. This divestiture was classified as a discontinued
operation.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
June 2001, Celanese sold its ownership interest in Hoechst Service
Gastronomie GmbH to Eurest Deutschland GmbH and InfraServ GmbH & Co.
Höchst KG.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In
October 2001, Celanese sold its ownership interest in Covion Organic
Semiconducters GmbH, a developer and producer of light-emitting organic
polymers, to Avecia, its joint venture partner in Covion Organic Semiconductors
GmbH.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
received gross proceeds of 13 million in 2001 and recorded a gain of
6 million in interest and other income, a gain of 2 million in gain
on disposal of discontinued operations and a gain of 1 million in gain on
disposition of assets related to the sale of these businesses. Celanese recorded
an additional pre-tax gain in 2001 of 12 million in gain on disposal of
discontinued operations related to a business divested in 2000. Additionally,
Celanese recognized a tax expense of 5 million for discontinued
operations.

Celanese
completed the following divestitures during 2000, all of which were classified as
discontinued operations in the accompanying consolidated statement of
operations:

| |  |  | In January 2000, Celanese sold its phosphorous and phosphorous derivatives
business, conducted by the Thermphos Group, to the Thermphos Groups
management. The loss was recognized at December 31, 1999.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In July 2000, Celanese sold its 50 percent interest in Vinnolit Kunststoff GmbH,
its joint venture with Wacker Chemie GmbH, and its 100 percent interest in
Vintron GmbH, both European producers of high performance polyvinyl chloride or
PVC products, to institutional funds managed by Advent International
Corporation. Pursuant to the sale agreement, the buyer had been granted limited
rescission rights which expired on December 15, 2001.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Celanese
received gross proceeds of 35 million and recorded 31 million,
pre-tax, in earnings (loss) from operation of discontinued operations (including
gain on disposal of discontinued operations of 28 million) relating to
these discontinued operations. Celanese also recorded 9 million of
additional pre-tax losses incurred in 2000 relating to other discontinued
operations sold in 1999 in gain on disposal of discontinued operations. Celanese
recognized a tax expense of 19 million for discontinued operations.

F-20

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 7.
Securities Available for Sale

At
December 31, 2002 and 2001, Celanese had 135 million and 142
million, respectively, of marketable securities available for sale, which were
included as a component of other assets. Celaneses captive insurance
companies hold these securities. There was a net realized loss of 7
million in 2002 and a net realized gain of 5 million in 2001. The net
realized loss in 2002 relates to an other-than-temporary writedown of 7
million due to the decline in market value of certain investments. The amortized
cost, gross unrealized gain, gross unrealized loss and fair values for
available-for-sale securities by major security type at December 31, 2002 and
2001, were as follows:

|                             | AmortizedCost |  | UnrealizedGain |     | UnrealizedLoss |  | FairValue
|---------------------------- | ------------- |  | -------------- | --- | -------------- |  | ---------
|
|At December 31, 2002         |               |  |                |     |                |  |          
|Debt Securities              |               |  |                |     |                |  |          
|U.S. Government              |               |  |                | 31  |                |  |          
|U.S. municipal               |               |  |                |    |                |  |          
|U.S. corporate               |               |  |                | 64  |                |  |          
|                             |               |  |                |     |                |  |          
|Total debt securities        |               |  |                | 95  |                |  |          
|Bank certificates of deposit |               |  |                | 15  |                |  |          
|Equity securities            |               |  |                | 6   |                |  |          
|Mortgage-backed securities   |               |  |                | 16  |                |  |          
|                             |               |  |                |     |                |  |          
|                             |               |  |                | 132 |                |  |          
|                             |               |  |                |     |                |  |          
|At December 31, 2001         |               |  |                |     |                |  |          
|Debt Securities              |               |  |                |     |                |  |          
|U.S. Government              |               |  |                | 21  |                |  |          
|U.S. municipal               |               |  |                | 2   |                |  |          
|U.S. corporate               |               |  |                | 96  |                |  |          
|                             |               |  |                |     |                |  |          
|Total debt securities        |               |  |                | 119 |                |  |          
|Bank certificates of deposit |               |  |                | 3   |                |  |          
|Equity securities            |               |  |                | 10  |                |  |          
|Mortgage-backed securities   |               |  |                | 11  |                |  |          
|                             |               |  |                |     |                |  |          
|                             |               |  |                | 143 |                |  |          
|                             |               |  |                |     |                |  |          

Fixed
maturities at December 31, 2002 by contractual maturity are shown below. Actual
maturities could differ from contractual maturities because borrowers may have
the right to call or prepay obligations, with or without call or prepayment
penalties.

|                       | AmortizedCost |  | FairValue
|---------------------- | ------------- |  | ---------
|
|Within one year        |               |  | 20       
|From one to five years |               |  | 53       
|From six to ten years  |               |  | 34       
|Greater than ten years |               |  | 19       
|                       |               |  |          
|                       |               |  | 126      
|                       |               |  |          

F-21

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 8.
Receivables, net

|                                                    | As of December 31, |      
|--------------------------------------------------- | ------------------ | -----
|
|
|Trade receivables, net  third party and affiliates |                    | 689  
|Reinsurance receivables                             |                    | 213  
|Other                                               |                    | 230  
|                                                    |                    |      
|Subtotal                                            |                    | 1,132
|Allowance for doubtful accounts                     |                    | (21  
|                                                    |                    |      
|Net receivables                                     |                    | 1,111
|                                                    |                    |      

As
of December 31, 2002 and 2001, Celanese had no significant concentrations of
credit risk since Celaneses customer base is dispersed across many
different industries and geographies.

In
2001, Celanese entered into an agreement that allows Celanese to sell certain
U.S. trade receivable under a planned continuous sale program to a third party.
This program is renewable annually until December 2004. The program is accounted
for under the provisions of SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities. The
agreement permits Celaneses U.S. operating subsidiaries to sell certain
U.S. trade receivable to CNA Funding LLC, a wholly owned subsidiary of Celanese
that was formed for the sole purpose of entering into the program. CNA Funding
LLC in turn sells an undivided ownership interest in these trade receivables to
the purchaser. Undivided interests in designated receivable pools were sold to
the purchaser with recourse limited to the receivables purchased. Celanese
continues to service, administer, and collect the trade receivables on behalf of
the financial institution and receives a fee for performance of these services.
At December 31, 2002 and 2001, the provision of the program allowed for the sale
of up to U.S. $120 million and U.S. $150 million of receivables, respectively.
The average monthly balance of outstanding receivables sold under the program in
2002 was approximately U.S. $47 million. There were no outstanding sales of
receivables under this program as of December 31, 2002 and December 31, 2001.
Fees paid by Celanese under this agreement are based on certain variable market
rate indices and totaled approximately U.S. $1 million in 2002. There were no
fees paid under the asset securitization program in 2001.

## 9.
Inventories

|                           | As of December 31, |    
|-------------------------- | ------------------ | ---
|
|
|Finished goods             |                    | 427
|Work-in-process            |                    | 17 
|Raw materials and supplies |                    | 70 
|                           |                    |    
|Subtotal                   |                    | 514
|LIFO reserve               |                    | 9  
|                           |                    |    
|Total inventories          |                    | 523
|                           |                    |    

At
December 31, 2002 and 2001, 219 million and 247 million,
respectively, of total inventories were valued by the LIFO method. During 2002
and 2001, inventory usage resulted in the liquidation of LIFO inventory
quantities, which had the effect of reducing cost of sales by 9 million
and 43 million, respectively.

As
of December 31, 2002 and December 31, 2001, the LIFO reserve for the U.S.
subsidiaries was net of a U.S. $28 million (27 million) fair value
adjustment in inventory from the 1987 acquisition by Hoechst of the former
Celanese Corporation. This acquisition, or merger, was accounted for as a
purchase. The purchase price was allocated based on the fair market value of
assets acquired and liabilities assumed.

F-22

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 10.
Investments

Celanese accounts for the
following Affiliates under the equity method:

|                                             |  |  |                      |  | Net BookValue |  | Earnings
|-------------------------------------------- |  |  | -------------------- |  | ------------- |  | --------
|
|Clear Lake Methanol Co., LLC                 |  |  | Acetyl               |  |               |  | 50.0%   
|Fortron Industries                           |  |  | Ticona               |  |               |  | 50.0%   
|Korea Engineering Plastics Co., Ltd          |  |  | Ticona               |  |               |  | 50.0%   
|Polyplastics Co., Ltd                        |  |  | Ticona               |  |               |  | 45.0%   
|InfraServ GmbH & Co. Gendorf KG              |  |  | Other                |  |               |  | 39.0%   
|InfraServ GmbH & Co. Höchst KG               |  |  | Other                |  |               |  | 31.2%   
|InfraServ GmbH & Co. Knapsack KG             |  |  | Other                |  |               |  | 27.9%   
|Siemens Axiva GmbH                           |  |  | Other                |  |               |  | 25.0%   
|Sherbrooke Capital Health and Wellness, L.P. |  |  | Performance Products |  |               |  | 9.9%    
|                                             |  |  |                      | 
|Total                                        |  |  |                      |  |               |  |         
|                                             |  |  |                      | 

|                                                             | 2002 |       | 2001 |      
|------------------------------------------------------------ | ---- | ----- | ---- | -----
|
|Affiliates totals:                                           |      |       |      |      
|Net sales                                                    |      | 1,857 |      | 1,797
|Net earnings                                                 |      | 54    |      | 49   
|Celaneses share:                                            |     
|Net earnings                                                 |      | 22    |      | 13   
|Dividends                                                    |      | 69    |      | 21   
|Distributions                                                |      | 41    |      |     
|Total assets                                                 |      | 1,800 |      | 2,374
|Total liabilities                                            |      | 872   |      | 1,121
|Interests of others                                          |      | 566   |      | 764  
|                                                             |      |       |      |      
|Celaneses equity                                            |      | 362   |      | 489  
|writedown of investment                                      |      |      |      | (21  
|Excess of cost over underlying equity in net assets acquired |      | 92    |      | 98   
|                                                             |      |       |      |      
|Celaneses investment                                        |      | 454   |      | 566  
|                                                             |      |       |      |      

|                                                     | AcquisitionCost |  | Write-Downs |   | Net BookValue
|---------------------------------------------------- | --------------- |  | ----------- | - | -------------
|
|January 1, 2002                                      |                 |  | 587         |   |              
|Distributions                                        |                 |  | (41         | ) |              
|Exchange rate changes                                |                 |  | (24         | ) |              
|Celaneses share of equity method investee earnings, |                 |  |             |   |              
|net of dividends received                            |                 |  | (47         | ) |              
|                                                     |                 |  |             |   |              
|December 31, 2002                                    |                 |  | 475         |   |              
|                                                     |                 |  |             |   |              

F-23

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 10.
Investments  (continued)

During
2002, Celanese received 41 million in distributions from investments in
InfraServ companies which were recorded as a reduction in carrying value of
these investments. Of this 41 million, 35 million was received from
InfraServ GmbH & Co. Höchst KG, 3 million from InfraServ GmbH
& Co. Knapsack KG and 3 million from InfraServ GmbH & Co. Gendorf
KG.

In
January 2001, Celanese sold its investment in InfraServ GmbH & Co. Münchsmünster KG to
Ruhr Oel GmbH. (See Note 6)

During
the third quarter of 2001, overcapacity in the methanol industry resulted in
Celanese and its venture partner idling its methanol unit, operated by the Clear
Lake Methanol Joint Venture (CLMV) indicating that an other than
temporary decline in the value of Celaneses investment in CLMV had
occurred. As a result, Celanese wrote down its remaining investment in CLMV of
6 million.

## 11.
Property, Plant and Equipment

|                                    | Landand LandImprovements |  | Building,BuildingImprovementsand LeaseholdImprovements |   | MachineryandEquipment |  | ConstructioninProgress |   | CapitalizedInterest |  | Total 
|----------------------------------- | ------------------------ |  | ------------------------------------------------------ | - | --------------------- |  | ---------------------- | - | ------------------- |  | ------
|
|Net book value at December 31, 2001 |                          |  | 107                                                    |   |                       |  | 226                    |   |                     |  | 1,317 
|                                    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|Acquisition or construction cost    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|January 1, 2002                     |                          |  | 192                                                    |   |                       |  | 599                    |   |                     |  | 5,383 
|Additions                           |                          |  |                                                       |   |                       |  | 1                      |   |                     |  | 11    
|Disposals                           |                          |  | (3                                                     | ) |                       |  | (2                     | ) |                     |  | (43   
|Transfers                           |                          |  | 1                                                      |   |                       |  | 13                     |   |                     |  | 192   
|Acquisitions                        |                          |  | 2                                                      |   |                       |  | 9                      |   |                     |  | 44    
|Exchange rate changes               |                          |  | (30                                                    | ) |                       |  | (80                    | ) |                     |  | (723  
|                                    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|December 31, 2002                   |                          |  | 162                                                    |   |                       |  | 540                    |   |                     |  | 4,864 
|                                    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|Accumulated Depreciation            |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|January 1, 2002                     |                          |  | (85                                                    | ) |                       |  | (373                   | ) |                     |  | (4,066
|Additions                           |                          |  | (5                                                     | ) |                       |  | (18                    | ) |                     |  | (255  
|Disposals                           |                          |  | 1                                                      |   |                       |  | 3                      |   |                     |  | 37    
|Exchange rate changes               |                          |  | 16                                                     |   |                       |  | 46                     |   |                     |  | 536   
|                                    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|December 31, 2002                   |                          |  | (73                                                    | ) |                       |  | (342                   | ) |                     |  | (3,748
|                                    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       
|Net book value at December 31, 2002 |                          |  | 89                                                     |   |                       |  | 198                    |   |                     |  | 1,116 
|                                    |                          |  |                                                        |   |                       |  |                        |   |                     |  |       

The
total capital expenditures in property, plant and equipment were 218
million and 217 million in 2002 and 2001, respectively. Depreciation
totaled 283 million and 307 million in 2002 and 2001, respectively.
writedowns due to asset impairments amounting to 6 million and 112
million were recorded to special charges in 2002 and 2001, respectively. The
asset impairment writedowns are included in additions to accumulated
depreciation.

Assets
under capital leases, net of accumulated amortization, amounted to 8  million and
11 million in 2002 and 2001, respectively.

Interest
costs capitalized were 6 million, 4 million and 13 million in
2002, 2001 and 2000, respectively.

F-24

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 12.
Intangible Assets

Goodwill

|                                                   | AcetylProducts |  | ChemicalIntermediates |   | AcetateProducts |  | Ticona |   | Total
|-------------------------------------------------- | -------------- |  | --------------------- | - | --------------- |  | ------ | - | -----
|
|Carrying value of goodwill as of December 31, 2001 |                |  | 585                   |   |                 |  | 15     |   |      
|                                                  
|Acquired during the year                           |                |  | 33                    |   |                 |  |       |   |      
|Impairment losses                                  |                |  |                      |   |                 |  |       |   |      
|Exchange rate changes                              |                |  | (91                   | ) |                 |  | (3     | ) |      
|                                                   |                |  |                       |   |                 |  |        |   |      
|Carrying value of goodwill as of December 31, 2002 |                |  | 527                   |   |                 |  | 12     |   |      
|                                                   |                |  |                       |   |                 |  |        |   |      

As of January 1, 2002, Celaneses gross carrying value and accumulated
amortization of goodwill were 2,047 million and 885 million,
respectively. Effective January 1, 2002, Celanese adopted SFAS No. 142,
Goodwill and Other Intangible Assets, and accordingly applied the
standards of the statement prospectively. This statement provides that goodwill
and other intangible assets with an indefinite life no longer be amortized
rather they will be tested annually for impairment. During 2002, Celanese
performed the required impairment tests of goodwill as of January 1, 2002 and
determined that there was no impairment. Additionally, Celanese recorded a
preliminary excess purchase price over fair value of net assets acquired of
33 million associated with its acquisition of Clariants European
emulsions and worldwide emulsion powders businesses in 2002. (See Note 6)

In 2001, special charges of 243 million were recorded for the impairment of
goodwill in the Chemical Intermediates segment due to the deterioration in the
outlook of the acrylates and oxo business lines. Celaneses management
determined that the future undiscounted cash flows associated with portions of
the assets of the underlying businesses were insufficient to recover their
carrying value. Accordingly, such assets were written down to fair value, which
was determined on the basis of discounted cash flows.

Other Intangible Assets

Celanese
determined that all other intangible assets have finite lives, which will
continue to be amortized over their useful lives. Celaneses gross carrying
value and accumulated amortization of patents, trademarks, and similar rights as
of December 31, 2002 were 38 million and 16 million, respectively.
On December 31, 2002, Celanese acquired an estimated 20 million of
intangible assets related to the emulsions business acquisition (see Note 6).
Aggregate amortization expense charged against earnings for intangible assets
with finite lives during the year ended December 31, 2002 totaled 3
million. Estimated amortization expense for the succeeding five fiscal years is
approximately 8 million in 2003, 6 million each in 2004 and 2005 and
4 million each in 2006 and 2007.

## 13.
Income Taxes

Celanese
is headquartered in Germany. Under German tax law, German corporations are
subject to both a corporate income tax and a trade income tax, the latter of
which varies based upon location. The trade income tax is deductible for
corporate income tax purposes. The German corporate income tax rate in 2002 was
25 percent. Combined with a solidarity surcharge of 5.5 percent on the German
corporate tax, and the blended trade income tax rate, the statutory tax rate for
Celanese in Germany is 40 percent.

Effective
January 1, 2003, the German corporate income tax rate will increase by 1.5
percent for the year 2003. This rate increase only applies to 2003. The
solidarity surcharge on the corporate income tax will remain 5.5 percent.
Combined with the solidarity surcharge on the German income tax rate plus the
blended trade income tax rate, the statutory tax rate in Germany will be 41
percent for 2003.

Deferred
taxes are being provided at a 40 percent rate for the German companies in 2002.
Deferred taxes are being provided on all other companies at the tax rate
currently in effect in the local tax jurisdictions.

F-25

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 13.
Income Taxes  (continued)

Prior
to January 1, 2001 and the enactment of the German Tax Reduction Law, German tax
law provided for a split tax rate to determine corporate income tax.
Undistributed corporate income was subject to German corporate taxes of 40
percent in 2000, plus a solidarity surcharge of 5.5 percent. The corporate
income tax rate for distributed income in 2000 was 32 percent after the
solidarity surcharge levy. Including the surcharge and the blended trade income
tax rate, the German statutory tax rate in 2000 was 45 percent.

|                                                                               | For the Years EndedDecember 31, |     
|------------------------------------------------------------------------------ | ------------------------------- | ----
|
|
|Earnings (loss) before income tax, minority interests, discontinued operations |                                 |     
|and cumulative effect of changes in accounting principles:                     |                                 |     
|Germany                                                                        |                                 | 149 
|U.S                                                                            |                                 | (186
|Other                                                                          |                                 | 203 
|                                                                               |                                 |     
|Total                                                                          |                                 | 166 
|                                                                               |                                 |     
|Provision (benefit) for income taxes:                                          |                                 |     
|Current:                                                                       |                                 |     
|Germany                                                                        |                                 | 40  
|U.S                                                                            |                                 | (49 
|Other                                                                          |                                 | 44  
|                                                                               |                                 |     
|Total current                                                                  |                                 | 35  
|                                                                               |                                 |     
|Deferred:                                                                      |                                 |     
|Germany                                                                        |                                 | 25  
|U.S                                                                            |                                 | (9  
|Other                                                                          |                                 | 2   
|                                                                               |                                 |     
|Total deferred                                                                 |                                 | 18  
|                                                                               |                                 |     
|Income tax provision (benefit)                                                 |                                 | 53  
|                                                                               |                                 |     
|Effective income tax rate reconciliation:                                      |                                 |     
|A reconciliation of income tax provision (benefit) for the years ended         |                                 |     
|December 31, 2002, 2001 and 2000 determined by using the applicable            |                                 |     
|German statutory rate of 40% for 2002, 40% for 2001 and 45% for                |                                 |     
|2000 follows:                                                                  |                                 |     
|                                                                              
|Income tax provision (benefit) computed at statutory tax rates                 |                                 | 66  
|Increase (decrease) in taxes resulting from:                                   |                                 |     
|Change in valuation allowance                                                  |                                 | (28 
|Equity income                                                                  |                                 | 15  
|Non-deductible amortization and impairment                                     |                                 |    
|Investments                                                                    |                                 |    
|Import/export activities                                                       |                                 |    
|U.S. foreign tax credit/Subpart F income                                       |                                 | 2   
|U.S. tax rate differentials                                                    |                                 | 9   
|Other foreign tax rate differentials                                           |                                 | (33 
|Valuation adjustments in subsidiaries                                          |                                 | 16  
|Enacted changes in tax rates                                                   |                                 |    
|Other                                                                          |                                 | 6   
|                                                                               |                                 |     
|Income tax provision (benefit)                                                 |                                 | 53  
|                                                                               |                                 |     

F-26

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 13.
Income Taxes  (continued)

In
2002, Celanese recognized income tax expense of 53 million as compared to
an income tax benefit of 126 million in 2001 and income tax expense of
88 million in 2000. Celanese also recognized in 2002 a 43 million
German tax benefit relating to a tax deductible writedown of its investment in
Trespaphan GmbH. This tax benefit is attributable to a discontinued business and
is therefore reported as part of discontinued operations and is not included in
the 2002 income tax provision.

The
effective tax rate for Celanese in 2002 was 32 percent compared to 26 percent in
2001 and 62 percent in 2000. The Celanese effective tax rate in 2002 was
favorably affected by the utilization of net operating loss carryforwards in
Germany, the release of certain valuation allowances on prior years
deferred tax assets, unrepatriated low-taxed earnings and a lower effective
minimum tax burden in Mexico. The effective tax rate was unfavorably affected in
2002 by distributions of taxable dividends from equity investments and the
reversal of a tax deductible writedown in 2000 of a German investment.

In
2001, Celanese recognized an income tax benefit of 126 million and
reported an effective tax rate of 26 percent. The effective tax rate in 2001 was
favorably affected by the full recognition of previously reserved deferred tax
assets of a subsidiary in Germany, the utilization of net operating loss
carryforwards, offset by non-deductible goodwill amortization and impairment
charges.

In
2000, Celanese recognized an income tax provision of 88 million and
reported an effective tax rate of 62 percent. The effective tax rate in 2000 was
affected by provisions for valuation adjustments and the utilization of net
operating loss carryforwards in Germany as well as non-deductible goodwill
amortization.

The
tax  effects of the temporary differences which give rise to a significant portion of
deferred tax assets and liabilities as of December 31, 2002 and 2001 are as  follows:

|                                       | 2002 |      | 2001 |      
|-------------------------------------- | ---- | ---- | ---- | -----
|
|Pension and Postretirement obligations |      | 391  |      | 366  
|Accrued expenses                       |      | 118  |      | 160  
|Net operating loss carryforwards       |      | 364  |      | 382  
|Investments                            |      | 26   |      | 28   
|Other                                  |      | 94   |      | 76   
|                                       |      |      |      |      
|Subtotal                               |      | 993  |      | 1,012
|Valuation allowance                    |      | (166 | )    | (199 
|                                       |      |      |      |      
|Deferred tax assets                    |      | 827  |      | 813  
|                                       |      |      |      |      
|Depreciation                           |      | 180  |      | 197  
|Interest                               |      | 7    |      | 11   
|Inventory                              |      | 23   |      | 24   
|Other                                  |      | 1    |      | 8    
|                                       |      |      |      |      
|Deferred tax liabilities               |      | 211  |      | 240  
|                                       |      |      |      |      
|Net deferred tax assets                |      | 616  |      | 573  
|                                       |      |      |      |      

A
valuation allowance is provided when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. Celanese has
established valuation allowances primarily for U.S. state and capital loss
carryforwards, and Mexican net operating loss carryforwards, which may not be
realizable. Based on the criteria provided under SFAS No. 109, it is more likely
than not that Celanese will realize the benefit of the remaining deferred tax
assets existing at December 31, 2002.

F-27

---



# CELANESE
AG AND SUBSIDIARIESNOTES
TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)

## 13.
Income Taxes  (continued)

At
December 31, 2002, Celanese has net operating loss carryforwards of
approximately 780 million, primarily in the United States, Germany and
Mexico, with various expiration dates. In addition, Celanese has capital loss
carryforwards of 178 million in the United States, which will expire in
2004.

Provision
has not been made for income taxes or foreign withholding taxes on any
cumulative earnings of foreign subsidiaries because such earnings will either
not be subject to any such taxes or are intended to be indefinitely reinvested
in those operations. It is not practicable to determine the tax liability, if
any, that would be payable if such earnings were not reinvested indefinitely.

## 14.
Accounts Payable and Accrued Liabilities

|                                               | As of December 31, |      
|---------------------------------------------- | ------------------ | -----
|
|
|Trade payables  third party and affiliates    |                    | 573  
|Accrued salaries and benefits                  |                    | 157  
|Accrued environmental (See note 25)            |                    | 34   
|Accrued restructuring                          |                    | 55   
|Insurance loss reserves                        |                    | 137  
|Accrued legal                                  |                    | 24   
|Other                                          |                    | 252  
|                                               |                    |      
|Total accounts payable and accrued liabilities |                    | 1,232
|                                               |                    |      

## 15. Debt

## Short-term borrowings and current installments of long-term debt

|                                                     | As ofDecember 31, |     | Weighted AverageInterest Rates |    
|---------------------------------------------------- | ----------------- | --- | ------------------------------ | ---
|
|
|Current installments of long-term debt               |                   | 99  |                                | 8  
|Bank loans                                           |                   |    |                                | 19 
|Short-term borrowings from Affiliates                |                   | 96  |                                | 240
|                                                     |                   |     |                                |    
|Total short-term borrowings and current installments |                  
|of long-term debt                                    |                   | 195 |                                | 267
|                                                     |                   |     |                                |    

Celanese
has a U.S. $700 million (667 million) commercial paper program of which no
amounts were outstanding at December 31, 2002. Celanese maintains committed
backup facilities, revolving credit lines and term loans with several banks
aggregating 1,580 million at December 31, 2002; the aggregate unused part
thereof amounts to 1,241 million, of which U.S. $310 million (296
million) were used as credit backup for Celaneses commercial paper
program. These credit backup facilities for the commercial paper program are
364-day facilities which are subject to renewal annually.

Celanese
had outstanding letters of credit amounting to 118 million at December 31,
2002 and 110 million at December 31, 2001.

Short-term
borrowings and current installments of long-term debt are principally denominated in U.S.
dollars and euro.

F-28

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 15.
Debt  (continued)

## Long-term
debt

|                                                                            | As of December 31, |    
|--------------------------------------------------------------------------- | ------------------ | ---
|
|
|Term notes:                                                                 |                    |    
|6.125% notes, due 2004                                                      |                    | 24 
|7.125% medium-term notes, due 2009                                          |                    | 13 
|Variable rate loans with interest rates as of December 31, 2002             |                    |    
|adjusted periodically:                                                      |                    |    
|Due in 2003, interest rate of 4.47%                                         |                    | 3  
|Due in 2003, interest rate of 1.49%                                         |                    | 95 
|Due in 2005, interest rate of 2.23%                                         |                    | 167
|Due in 2006, interest rate of 4.47%                                         |                    | 5  
|Pollution control and industrial revenue bonds, interest rates ranging from |                    |    
|5.2% to 6.7%, due at various dates through 2030                             |                    | 199
|Obligations under capital leases, due at various dates through 2012         |                    | 13 
|                                                                            |                    |    
|Subtotal                                                                    |                    | 519
|Less: Current installments of long-term debt                                |                    | 99 
|                                                                            |                    |    
|Total long-term debt                                                        |                    | 420
|                                                                            |                    |    

Substantially
all the above long-term borrowings are denominated in U.S. dollars. Certain loan
agreements, entered into by Celanese subsidiaries, include equity ratio and
other covenants that limit their ability to enter into certain transactions. As
of December 31, 2002, Celanese was in compliance with all debt covenants.

The
maturities in 2003 and thereafter are as follows:

|           | Total
|---------- | -----
|
|2003       |      
|2004       |      
|2005       |      
|2006       |      
|2007       |      
|Thereafter |      
|           |      
|Total      |      
|           |      

Celanese
recorded interest expense, net of amounts capitalized, of 59 million,
80 million and 74 million in 2002, 2001 and 2000, respectively.
Interest expense on the borrowings noted above, including the effects of related
interest rate swaps and the adjustment for capitalized interest, was 48
million, 69 million and 65 million, respectively. The remaining
portion related to the interest component of discounted environmental
liabilities, financial instruments and other liabilities.

F-29

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 16.
Other Liabilities

|                                                                      | As of December 31, |      
|--------------------------------------------------------------------- | ------------------ | -----
|
|
|Pension and postretirement medical and life obligations (See Note 19) |                    | 1,212
|Environmental liabilities (See Note 25)                               |                    | 165  
|Insurance liabilities (See Note 2)                                    |                    | 169  
|Other                                                                 |                    | 249  
|                                                                      |                    |      
|Total other liabilities                                               |                    | 1,795
|                                                                      |                    |      

## 17.
Cost of Raw Materials and Supplies

The
following cost of raw materials and supplies reflect total costs incurred by  continuing
and discontinued operations in the respective periods:

|                                                | 2002 |       | 2001 |       | 2000 |      
|----------------------------------------------- | ---- | ----- | ---- | ----- | ---- | -----
|
|Cost of raw materials, supplies and merchandise |      | 2,216 |      | 2,761 |      | 2,993
|Cost of services purchased (primarily energy)   |      | 334   |      | 433   |      | 415  
|                                                |      |       |      |       |      |      
|Total cost of raw materials and supplies        |      | 2,550 |      | 3,194 |      | 3,408
|                                                |      |       |      |       |      |      

Total
cost of raw materials and supplies for discontinued operations were 165
million, 206 million, and 232 million for 2002, 2001, and 2000,
respectively. The reduction in cost of raw materials and supplies in 2002
reflects the decrease in raw materials and energy costs due to volatility in
hydrocarbon costs, primarily natural gas.

## 18.
Personnel Expenses

The
following personnel expenses reflect total costs incurred by continuing and  discontinued
operations in the respective periods:

|                                                               | 2002 |     | 2001 |       | 2000 |      
|-------------------------------------------------------------- | ---- | --- | ---- | ----- | ---- | -----
|
|Wages and salaries                                             |      | 707 |      | 767   |      | 777  
|Social security contributions                                  |      | 75  |      | 82    |      | 85   
|Other                                                          |      | 72  |      | 77    |      | 125  
|                                                               |      |     |      |       |      |      
|Personnel expenses excluding pensions and similar benefits and |      |     |      |       |      |      
|restructuring severance expenses                               |      | 854 |      | 926   |      | 987  
|Pensions and similar benefits                                  |      | 104 |      | 125   |      | 127  
|                                                               |      |     |      |       |      |      
|Personnel expenses excluding restructuring severance expenses  |      | 958 |      | 1,051 |      | 1,114
|Restructuring severance expenses                               |      | 11  |      | 133   |      | 46   
|                                                               |      |     |      |       |      |      
|Total cost of personnel expenses                               |      | 969 |      | 1,184 |      | 1,160
|                                                               |      |     |      |       |      |      

Total
cost  of personnel expenses for discontinued operations were 68 million,  78
million, and 68 million for 2002, 2001, and 2000, respectively.

F-30

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 19.
Benefit Obligations

Pension
obligations Pension obligations are established for
benefits payable in the form of retirement, disability and surviving dependent
pensions. The benefits offered vary according to the legal, fiscal and economic
conditions of each country. The commitments result from participation in defined
contribution and defined benefit plans, primarily in the U.S. Benefits are
dependent on years of service and the employees compensation. Supplemental
retirement benefits provided to certain employees are non-qualified for U.S. tax
purposes. Separate trusts have been established for some non-qualified plans.

Defined
benefit pension plans exist at certain locations in Europe and North America.
Independent trusts or insurance companies administer the majority of these
plans. Actuarial valuations for these plans are generally prepared annually.

Celanese
sponsors various defined contribution plans in Europe and North America covering
certain employees. Employees may contribute to these plans and Celanese may
match these contributions in varying amounts. Celaneses contributions to
the defined contribution plans are based on specified percentages of employee
contributions and aggregated 12 million in 2002 and 15 million in
2001.

Other
postretirement benefit plans Certain retired employees
receive postretirement medical benefits under plans sponsored by Celanese.
Celanese has the right to modify or terminate these plans at any time. Celanese
employees in the U.S. who were 50 years of age as of January 1, 2001 are
eligible to receive postretirement medical benefits, both pre-65 coverage and
continued secondary coverage at age 65, provided that upon termination they are
at least age 55 and have a minimum of 10 years of service. On January 1, 2001,
Celanese eliminated continued postretirement medical coverage at age 65 for
employees who were not 50 on January 1, 2001 or were hired on or after January
1, 2001. This group of employees continues to be eligible for pre-65
postretirement medical coverage provided that upon termination they are at least
age 55 and have a minimum of 10 years of service. Generally, the cost for
coverage is shared between Celanese and the employee, and is determined based
upon completed years of service.

|                                                  | Pension Benefits |       | PostretirementBenefits |      
|------------------------------------------------- | ---------------- | ----- | ---------------------- | -----
|
|
|Change in projected benefit obligation            |                  |       |                        |      
|Projected benefit obligation at beginning of year |                  | 2,667 |                        | 2,297
|Service cost                                      |                  | 35    |                        | 35   
|Interest cost                                     |                  | 176   |                        | 181  
|Participant contributions                         |                  | 1     |                        | 1    
|Plan amendments                                   |                  | 1     |                        | 8    
|Actuarial (gains) losses                          |                  | 81    |                        | 210  
|Acquisitions                                      |                  | 6     |                        |     
|Special termination benefits                      |                  | 1     |                        | 1    
|Divestitures                                      |                  |      |                        |     
|Settlements                                       |                  | (7    | )                      | (22  
|Curtailments                                      |                  |      |                        |     
|Benefits paid                                     |                  | (167  | )                      | (165 
|Change in measurement date                        |                  | 76    |                        |     
|Foreign currency exchange rate changes            |                  | (431  | )                      | 121  
|                                                  |                  |       |                        |      
|Projected benefit obligation at end of year       |                  | 2,439 |                        | 2,667
|                                                  |                  |       |                        |      

F-31

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 19.
Benefit Obligations  (continued)

|                                                         | Pension Benefits |       | PostretirementBenefits |      
|-------------------------------------------------------- | ---------------- | ----- | ---------------------- | -----
|
|
|Change in plan assets                                    |                  |       |                        |      
|Fair value of plan assets at beginning of year           |                  | 1,741 |                        | 1,993
|Actual (loss) return on plan assets                      |                  | (159  | )                      | (302 
|Company contributions                                    |                  | 121   |                        | 134  
|Participant contributions                                |                  | 1     |                        | 1    
|Acquisitions                                             |                  |      |                        |     
|Divestitures                                             |                  |      |                        |     
|Settlements                                              |                  | (5    | )                      | (17  
|Benefits paid                                            |                  | (167  | )                      | (165 
|Change in measurement date                               |                  | 243   |                        |     
|Foreign currency exchange rate changes                   |                  | (274  | )                      | 97   
|                                                         |                  |       |                        |      
|Fair value of plan assets at end of year                 |                  | 1,501 |                        | 1,741
|                                                         |                  |       |                        |      
|Funded status and net amounts recognized                 |                  |       |                        |      
|Plan assets in excess of (less than) benefit obligation  |                  | (938  | )                      | (926 
|Unrecognized prior service cost (benefit)                |                  | 40    |                        | 56   
|Unrecognized actuarial loss                              |                  | 807   |                        | 559  
|Unrecognized net transition asset                        |                  | (2    | )                      | (4   
|Fourth quarter contribution                              |                  |      |                        | 119  
|                                                         |                  |       |                        |      
|Net amount recognized in the consolidated balance sheets |                  | (93   | )                      | (196 
|                                                         |                  |       |                        |      
|Amounts recognized in the accompanying consolidated      |                  |       |                        |      
|Balance sheets consist of:                               |                  |       |                        |      
|Accrued benefit liability                                |                  | (804  | )                      | (658 
|Intangible asset(1)                                      |                  | 40    |                        | 51   
|Additional minimum liability(2)                          |                  | 671   |                        | 411  
|                                                         |                  |       |                        |      
|Net amount recognized in the consolidated balance sheets |                  | (93   | )                      | (196 
|                                                         |                  |       |                        |      

---

|(1) |  | Amount
is classified as other assets in the consolidated balance sheets.
|--- |  | ------------------------------------------------------------------------

|(2) |  | Amount
shown net of tax in the consolidated statements of shareholders equity.
|--- |  | ------------------------------------------------------------------------------

Postretirement
medical expense for 2002 was based on a medical trend assumption of 5.5% per
year. This assumption was revised effective with the December 31, 2002 end of
year disclosure and 2003 expense. The revised trend assumption begins at 10% for
2003 decreasing 1% per year until reaching an ultimate trend rate of 5% in 2008.

In
2002, Celanese changed the actuarial valuation measurement date for its U.S.
pension and other postretirement benefit plans from September 30 to December 31.
Celanese believes this method is preferable in the circumstances because a
calendar year reporting will bring the valuation date in line with its fiscal
year-end reporting and allow for a more current measurement of the related
actuarial components. Celanese accounted for this as a change in accounting
principle, which resulted in a cumulative effect adjustment in 2002. As a
result, income of 9 million, net of income taxes of 5 million, was
recorded to cumulative effect of changes in accounting principles in
Celaneses consolidated statement of operations. In addition, this change
reduced total 2002 pension and postretirement benefit expense cost by
approximately 14 million.

F-32

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 19.
Benefit Obligations  (continued)

Celaneses
pension cost is materially affected by the discount rate used to measure pension
obligations, the level of plan assets available to fund those obligations at the
measurement date and the expected long-term rate of return on plan assets. Due
to a lower discount rate, a reduction in the value of plan assets as a result of
investment losses at the measurement date and a lower return on plan asset
assumption, Celaneses total net pension cost for 2003 will increase by
approximately 7 million. In addition, the lower return on plan asset
assumption resulted in expense of 4 million in 2002.

|                                           | PensionBenefits |      | PostretirementBenefits |     
|------------------------------------------ | --------------- | ---- | ---------------------- | ----
|
|
|Components of net periodic benefit cost    |                 |      |                        |     
|Service cost                               |                 | 35   |                        | 35  
|Interest cost                              |                 | 176  |                        | 181 
|Expected return on plan assets             |                 | (178 | )                      | (174
|Amortization of prior service cost         |                 | 8    |                        | 15  
|Recognized actuarial loss                  |                 | 3    |                        |    
|Amortization of the unamortized obligation |                 | (2   | )                      | (2  
|Curtailment loss (gain)                    |                 | (1   | )                      | 1   
|Settlement loss                            |                 | 2    |                        | 1   
|Change in measurement date                 |                 | (15  | )                      |    
|                                           |                 |      |                        |     
|Net periodic benefit cost                  |                 | 28   |                        | 57  
|                                           |                 |      |                        |     

|                                | PensionBenefits |       | PostretirementBenefits |      
|------------------------------- | --------------- | ----- | ---------------------- | -----
|
|Discount rate:                  |                 |       |                        |      
|U.S. plans                      |                 | 6.75% |                        | 7.25%
|International plans             |                 | 6.30% |                        | 6.90%
|Combined                        |                 | 6.70% |                        | 7.20%
|Expected return on plan assets: |                 |       |                        |      
|U.S. plans                      |                 | 9.00% |                        | 9.25%
|International plans             |                 | 7.60% |                        | 8.15%
|Combined                        |                 | 8.90% |                        | 9.20%
|Rate of compensation increase   |                 |       |                        |      
|U.S. plans                      |                 | 4.00% |                        | 3.40%
|International plans             |                 | 2.70% |                        | 3.30%
|Combined                        |                 | 3.75% |                        | 3.40%

The
projected benefit obligation, accumulated benefit obligation, and fair value of plan
assets for the pension plans with accumulated benefit obligations in excess of plan assets
as of December 31, 2002 were 2,433 million, 2,301 million and 1,493
million, respectively, and as of December 31, 2001 were 2,542 million, 2,420
million and 1,614 million, respectively.

F-33

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 19.
Benefit Obligations  (continued)

In
2002, the additional minimum liability increased by 260 million as a
result of the recording of a required increase to the additional minimum
liability of 338 million, partially offset by currency translation
effects. The additional minimum liability adjustment resulted from a decline in
the value of pension plan assets and a reduction in the discount rate used to
value pension plan obligations. As a result of this adjustment, accumulated
other comprehensive income (loss) in the consolidated statement of
shareholders equity was reduced by 220 million, which is net of an
income tax benefit of 118 million.

Included
in the pension obligations above are accrued liabilities relating to
supplemental retirement plans for certain employees amounting to 189
million and 208 million as of December 31, 2002 and 2001, respectively.
Pension expense relating to these plans included in net periodic benefit cost
totaled 20 million, 19 million and 18 million for 2002, 2001
and 2000, respectively. To fund these obligations, Celanese has established
non-qualified trusts, included within other non-current assets, which had market
values of 111 million and 151 million at December 31, 2002 and 2001,
respectively, and recognized interest income of 3 million and 8
million for 2001 and 2000, respectively. There was no interest income recorded
in 2002 related to these trusts.

Assumed
health care cost trend rates have a significant effect on the amounts reported
for the health care plans. A one-percentage-point change in assumed health care
cost trend rates would have the following effects:

|                                    | OnePercentIncrease |  | OnePercentDecrease
|----------------------------------- | ------------------ |  | ------------------
|
|Effect on postretirement obligation |                    |  | 24                

The
effect  of a one percent increase or decrease in the assumed health care cost trend rate
would have less than a 1 million impact on service and interest cost.

The
following table represents additional benefit liabilities and other similar
obligations:

|                     | 2002 |    | 2001 |    
|-------------------- | ---- | -- | ---- | ---
|
|Other Obligations    |      |    |      |    
|Long-term disability |      | 72 |      | 85 
|Other                |      | 25 |      | 29 
|                     |      |    |      |    
|Total                |      | 97 |      | 114
|                     |      |    |      |    

## 20.
Shareholders Equity

## Number
of Shares Authorized and Issued

In
2002, Celanese retired 1,125,000 shares held in treasury, which resulted in a
3 million reduction of common stock, a 22 million reduction in
additional paid-in capital and a 25 million reduction in treasury stock.
Celanese had authorized and issued 54,790,369 and 55,915,369 shares of common
stock of no par value at December 31, 2002 and 2001, respectively.

F-34

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 20.
Shareholders Equity  (continued)

See
table below for share activity:

|                                                 | CommonStock |  | CommonStock |   | AuthorizedCommon Stock | 
|------------------------------------------------ | ----------- |  | ----------- | - | ---------------------- | 
|
|
|As of December 31, 1999                          |             |  | 55,915,369  |   |                        | 
|Shares repurchased into treasury                 |             |  |            |   |                        | 
|Shares issued to Supervisory Board from treasury |             |  |            |   |                        | 
|                                                 |             |  |             |   |                        | 
|As of December 31, 2000                          |             |  | 55,915,369  |   |                        | 
|Shares issued to Supervisory Board from treasury |             |  |            |   |                        | 
|                                                 |             |  |             |   |                        | 
|As of December 31, 2001                          |             |  | 55,915,369  |   |                        | 
|Retirement of treasury shares                    |             |  | (1,125,000  | ) |                        | 
|Shares repurchased into treasury                 |             |  |            |   |                        | 
|Shares issued to Supervisory Board from treasury |             |  |            |   |                        | 
|Authorized Capital increases pursuant to         |             |  |             |   |                        | 
|stock option plan                                |             |  |            |   |                        | 
|                                                 |             |  |             |   |                        | 
|As of December 31, 2002                          |             |  | 54,790,369  |   |                        | 
|                                                 |             |  |             |   |                        | 

## Treasury
Stock

Celanese
is legally permitted under the German Stock Corporation Act to hold as treasury
shares a maximum of 10 percent of its authorized and issued shares at any point
in time. At the Annual General Meeting of Celanese held on May 15, 2002, the
shareholders renewed an authorization for the Board of Management to acquire and
hold a maximum of 10 percent of the 55,915,369 shares authorized and issued at
the time of such meeting. The authorization expires on November 14, 2003.

During
2000, Celanese repurchased 5,591,500 shares at a total cost of 123 million. In 2002,
Celanese retired 1,125,000 treasury shares and repurchased 284,798 shares at a total cost
of 6 million.

During
2002, 2001 and 2000,  respectively, 8,383, 8,536, and 2,486 shares of treasury stock were
issued to  members of the Supervisory Board as part of their annual compensation.

Celanese
held 4,731,893, 5,580,478 and 5,589,014 shares of treasury stock as of December
31, 2002, 2001 and 2000, respectively.

## Additional
Paid-in Capital

In
connection with the demerger and pursuant to the Demerger Agreement executed and
delivered by Celanese and Hoechst, Celanese assumed all of the assets and
liabilities of Hoechsts basic chemicals, acetates, technical polymer and
certain other industrial businesses as well as certain contractual rights and
obligations related to other current and former Hoechst businesses. In 2002, as
a result of a favorable settlement of a demerger liability with Hoechst,
Celanese recorded a 7 million increase to additional paid-in capital.

In
2002, Celanese granted 1.1 million stock options and in accordance with SFAS No. 123
expensed the fair value of these options. As a result, additional paid-in capital
increased by 3 million in 2002 to reflect the 2002 amortization of the fair value of the
stock options. (See Note 21)

The
repurchase of treasury shares in 2000 noted above resulted in a 4 million increase in
additional paid-in capital. (See Note 21)

F-35

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 20.
Shareholders Equity  (continued)

## Accumulated
Other Comprehensive Income (Loss)

Comprehensive
income (loss), which is displayed in the consolidated statement of
shareholders equity, represents net earnings (loss) plus the results of
certain shareholders equity changes not reflected in the consolidated
statement of operations. Such items include unrealized gains/losses on
marketable securities, foreign currency translation, minimum pension liabilities
and unrealized gains/losses on derivative contracts.

The
after-tax components of accumulated other comprehensive income (loss) are as
follows:

|                             | UnrealizedGain/(Loss) onSecurities |  | ForeignCurrencyTranslation |   | MinimumPensionLiability |  | UnrealizedLoss onDerivativeContracts |   | AccumulatedOtherComprehensiveIncome/(Loss)
|---------------------------- | ---------------------------------- |  | -------------------------- | - | ----------------------- |  | ------------------------------------ | - | ------------------------------------------
|
|Balance at December 31, 1999 |                                    |  |                           |   |                         |  | 184                                  |   |                                           
|Current-period change        |                                    |  | 7                          |   |                         |  | 44                                   |   |                                           
|                             |                                    |  |                            |   |                         |  |                                      |   |                                           
|Balance at December 31, 2000 |                                    |  | 7                          |   |                         |  | 228                                  |   |                                           
|Current-period change        |                                    |  | (4                         | ) |                         |  | 35                                   |   |                                           
|                             |                                    |  |                            |   |                         |  |                                      |   |                                           
|Balance at December 31, 2001 |                                    |  | 3                          |   |                         |  | 263                                  |   |                                           
|Current-period change        |                                    |  | 2                          |   |                         |  | (173                                 | ) |                                           
|                             |                                    |  |                            |   |                         |  |                                      |   |                                           
|Balance at December 31, 2002 |                                    |  | 5                          |   |                         |  | 90                                   |   |                                           
|                             |                                    |  |                            |   |                         |  |                                      |   |                                           

## Authorized
and Conditional Capital

At
the Annual General Meeting of Celanese held on May 15, 2002, shareholders of
common stock approved a resolution to increase share capital on a contingent
basis by up to 3,195,574 through the issuance of up to 1,250,000 shares of
common stock with no-par value (contingent capital). The contingent
capital increase serves exclusively to grant stock options to members of the
Board of Management of Celanese and its group companies as well as to other
senior managers of Celanese pursuant to the provisions of the authorization
adopted by the shareholders at the meeting. The issuance of these shares will be
carried out only insofar as these stock options are exercised and are not
satisfied by delivery of existing treasury shares.

## Dividend
Policy

The
payment and amount of any dividends depends on Celaneses current and
future earnings, cash flow, financial condition and other factors and therefore
cannot be guaranteed to be paid in any given period. Dividends are subject to
recommendation by the Celanese Supervisory Board and Board of Management and the
approval of the shareholders at Celaneses annual general meetings. Under
German law, dividends are payable only out of unappropriated retained earnings
as shown in the unconsolidated annual financial statements of Celanese AG,
prepared in accordance with German accounting principles, as adopted and
approved by resolutions of the Celanese Board of Management and Supervisory
Board.

## 21.
Stock-based Compensation

At
the Annual General Meeting of Celanese on May 15, 2002, shareholders approved the 2002
Celanese Stock Option Plan (the 2002 Plan) which authorizes the issuance of up
to 1.25 million options to purchase shares of common stock. On July 8, 2002, Celanese
granted 1.1 million stock options, at an exercise price of 27.54 per share, to the
Board of Management and key employees for the purchase of Celanese shares of common stock.
Options are granted at an exercise price reflecting the reference price (twenty day
average of market price prior to start of plan reference date) plus a 20% exercise premium
and become exercisable five years from the date of grant. Two year vesting is possible if
the market price per share outperforms the median performance of Celaneses

F-36

---



# CELANESE AG AND
SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 21.
Stock-based Compensation  (continued)

competitors over the holding period. All unexercised options expire ten years from the
date of grant. If the market price per Celanese share of common stock on the date of
exercise is at least 20% higher than the reference price at the time of the grant, the
holder is entitled to receive a cash payment equal to the exercise premium of 20%. In
accordance with SFAS No. 123 , the fair value of the 1.1 million options approximated
10 million, which will be recognized over the accelerated vesting period of two
years. For the year ended December 31, 2002, Celanese recognized compensation expense of
approximately 3 million for these options.

A
summary  of the activity related to the 2002 Plan as of and for the year ended December
31, 2002, is presented (stock options in millions):

|                                   | 2002
|---------------------------------- | ----
|
|Outstanding at beginning of year   |     
|Granted                            |     
|Exercised                          |     
|Forfeited                          |     
|                                   |     
|Outstanding at end of year         |     
|                                   |     
|Options exercisable at end of year |     
|                                   |     

The
weighted-average fair value of the options granted during 2002 was estimated to
be 9.33 per option, on the date of grant using the Black-Scholes
option-pricing model with the following assumptions:

|                                | 2002
|------------------------------- | ----
|Expected dividend yield         |     
|Risk-free interest rate         |     
|Expected stock price volatility |     
|Expected life (years)           |     

Effective
January 15, 2001, Celanese adopted the Long-Term Incentive Plan (the 2000
Celanese LTIP). The 2000 Celanese LTIP covers the Board of Management and
senior executives of Celanese. Stock appreciation rights (Rights)
granted under the 2000 Celanese LTIP have a ten-year term and generally will be
exercisable in whole or in part, subject to certain limitations, at any time
during the period between January 15, 2003 and January 14, 2011, provided at the
time of exercise, the performance of an ordinary share of Celanese on the
Frankfurt Stock Exchange must exceed the performance of the median of the share
prices of Celaneses peer group companies as defined by the Board of
Management of Celanese. Under the 2000 Celanese LTIP, the participant will
receive the cash difference between the base price and the share price of
Celanese on the day of exercise. In January 2001, Celanese granted approximately
2 million Rights to the participants under the 2000 Celanese LTIP. During 2002,
Celanese granted an additional 0.1 million Rights to the 2000 Celanese LTIP
participants. Of the total 2.1 million Rights granted, 1.9 million remain
outstanding at December 31, 2002. Celanese recognized expense of approximately
1 million and 1 million during 2002 and 2001, respectively, for the
2000 Celanese LTIP. Rights remaining unexercised as of January 15, 2011 will be
deemed to have been forfeited as of that date. The grant price of these Rights
was 19.56 per share.

During
1999, Celanese adopted the Equity Participation Plan (the 1999 Celanese EPP)
and the Long-Term Incentive Plan (the 1999 Celanese LTIP). The 1999 Celanese
EPP covers the Board of Management and certain senior executives of Celanese. The
participants in the 1999 Celanese EPP were required to purchase a defined value of
Celanese stock over a one or two year period. The Rights granted under the 1999 Celanese
EPP were based on the required amount of money invested in Celanese shares by the
participant, divided by the base price of the stock and multiplied by two. Rights granted
under the EPP have a ten-year term and generally will be exercisable in whole or

F-37

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 21.
Stock-based Compensation  (continued)

in part, subject to certain limitations, at any time during the period between October 25,
2001 and October 25, 2009, provided at the time of exercise, the performance of an
ordinary share of Celanese on the Frankfurt Stock Exchange must exceed the median of
performance of the share prices of Celaneses peer group companies as defined by the
Celanese Board of Management. Under the 1999 Celanese EPP, the participant will receive
the cash difference between the base price and the Celanese share price on the day of
exercise. During 1999, Celanese granted approximately 2.5 million Rights to the 1999
Celanese EPP participants. During 2001, Celanese granted an additional 0.1 million Rights
to the 1999 Celanese EPP participants. Of the total 2.6 million Rights granted, 1.7
million remain outstanding at December 31, 2002. Rights remaining unexercised as of
October 26, 2009 will be deemed to have been forfeited as of that date. The grant price of
these Rights was 16.37 per share. Celanese recognized expense of 2 million,
5 million and 4 million for the 1999 Celanese EPP during 2002, 2001 and 2000,
respectively.

The
1999 Celanese LTIP covers the Board of Management and senior executives of
Celanese. Rights granted under the 1999 Celanese LTIP have a ten-year term and
generally are exercisable in whole or in part, subject to limitations, at any
time during the period between October 25, 2001 and October 25, 2009, provided
at the time of exercise, the performance of an ordinary share of Celanese on the
Frankfurt Stock Exchange must exceed the performance of the median of the share
prices of Celaneses peer group companies as defined by the Board of
Management of Celanese. Under the 1999 Celanese LTIP, the participant will
receive the cash difference between the base price and the share price of
Celanese on the day of exercise. During 1999, Celanese granted approximately 2.4
million Rights to the participants under the 1999 Celanese LTIP, of which 1.6
million remain outstanding at December 31, 2002. Rights remaining unexercised as
of October 26, 2009 will be deemed to have been forfeited as of that date. The
grant price of these Rights was 16.37 per share. Celanese recognized
expense of 1 million, 5 million and 3 million for the 1999
Celanese LTIP in 2002, 2001 and 2000, respectively.

A
summary  of the activity related to stock appreciation rights plans as of and for the
years ended December 31, 2002, 2001 and 2000 is presented (Rights in millions):

|                                  | 2002 |  | 2001 |   | 2000
|--------------------------------- | ---- |  | ---- | - | ----
|
|
|Outstanding at beginning of year  |      |  | 5.8  |   |     
|Granted                           |      |  | 0.1  |   |     
|Exercised                         |      |  | (0.6 | ) |     
|Forfeited                         |      |  | (0.1 | ) |     
|                                  |      |  |      |   |     
|Outstanding at end of year        |      |  | 5.2  |   |     
|                                  |      |  |      |   |     
|Rights exercisable at end of year |      |  | 3.3  |   |     
|                                  |      |  |      |   |     

As
of December 31, 2002, the members of the Supervisory Board and Board of
Management held shares, options and Rights representing 0.3% and 2.1%,
respectively, of the total shares outstanding.

Beginning
in 2000, Celanese offers stock participation plans (SPP) to
employees not eligible to participate in the stock appreciation rights plans.
Under these plans, active employees who invest a defined amount of money in
Celanese shares during a limited period of time are entitled to receive a 35
percent rebate from Celanese. Compensation expense of 2 million was
recognized during both 2002 and 2001 for the Celanese SPP.

In
connection with the demerger, Celanese assumed obligations associated with the
Hoechst 1997 Stock Appreciation Rights Plan (the 1997 Hoechst SAR
Plan) and the Hoechst 1998 Stock Option Plan (the 1998 Hoechst
Option Plan) for participating Celanese employees under these compensation
programs. As a result of the merger of Hoechst and Rhône-Poulenc to form
Aventis in December 1999, the terms and conditions of these compensation
programs were modified to take into account the changed circumstances.

F-38

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 21.
Stock-based Compensation  (continued)

During
1997, Celanese employees participating in the 1997 Hoechst SAR Plan were granted
168,500 Rights. These Rights had a five-year term and generally were exercisable
in whole or in part, subject to certain limitations, at any time during the
period between September 9, 1999 and September 9, 2002, provided that at the
time of exercise, the closing price of an ordinary share of Hoechst on the
Frankfurt Stock Exchange was at least 125 percent of the grant price. The grant
price of these Rights was 37.73 per share. Rights remaining unexercised as
of September 9, 2002 were to be automatically exercised as of that date only if
the closing price of the shares was at least 125 percent of the grant price.
Following the demerger and the creation of Aventis, the terms of the 1997
Hoechst SAR Plan were modified to take into consideration the conversion of
Hoechst shares into Aventis shares. The grant price of 37.73 per Hoechst
share was converted to 45.43 per Aventis share. As a result of this
modification, the number of rights granted was converted to 139,922 from
168,500. Additionally, all hurdles for the exercise of the Rights were
eliminated. As part of the demerger, Hoechst agreed to indemnify Celanese for
all expenses associated with the 1997 Hoechst SAR Plan. All rights remaining
unexercised as of September 9, 2002 were automatically exercised as of that
date.

During
1998, Celanese employees participating in the 1998 Hoechst Option Plan were
granted 124,774 options. These options have a five-year term and generally will
be exercisable in whole or in part, subject to certain limitations, at any time
during the period between September 30, 2001 until September 30, 2003, provided
that, at the time of exercise, the closing price of an ordinary share of Hoechst
on the Frankfurt Stock Exchange must meet the following hurdles, such as, the
closing price must be at least 125 percent of the grant price and the Hoechst
share price must exceed the performance of the share price of eight out of
seventeen peer group companies as defined by the Board of Management of Hoechst.
The grant price of these options was 34.88 per share. As a result of the
demerger and the creation of Aventis, the terms of the 1998 Hoechst Option Plan
were modified to take into consideration the conversion of Hoechst shares into
Aventis shares. Celanese employees that were covered under the 1998 Hoechst
Stock Option Plan had the option to continue the plan as the Aventis Option
Plan, convert it into a form of Celanese Rights or to receive a cash
distribution. In the case of continuing the plan as the Aventis Option Plan, the
grant price was converted from 34.88 per Hoechst share to 42.01 per
Aventis share. The creation of Aventis triggered a change of control provision
contained in the 1998 Hoechst Option Plan, and accordingly, these rights were
considered fully vested at September 30, 2001. Additionally, all performance
hurdles for the exercise of the options were eliminated. As of December 31,
2002, 22,021 Aventis options remain outstanding. Unexercised options as of
September 30, 2003 will be forfeited as of that date. In the case of electing to
convert the options into a form of Celanese Rights, the number of shares subject
to options was converted to 43,750 Celanese Rights, all of which remain
outstanding as of December 31, 2002. The conditions for the exercise of these
Celanese Rights are based on the same requirements as those in the 1999 Celanese
Equity Participation Plan discussed below. The base price of the Rights was
fixed at 16.37 per share. Celanese employees who chose to receive a cash
distribution were paid 15.30 per Hoechst option. Celanese recognized no
expense in 2002 and expense of less than 1 million in 2001 and 2000 for
the 1998 Hoechst Option Plan.

During
2002, 2001 and 2000, 8,383, 8,536 and 2,486 shares of treasury stock,
respectively, and the cash equivalent of 0, 683 and 0 shares of treasury stock,
respectively, were issued to members of the Supervisory Board as part of their
annual compensation.

F-39

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 22.
Leases

Total
minimum rent charged to operations under all operating leases was 46
million, 56 million and 60 million in 2002, 2001 and 2000,
respectively. Future minimum lease payments under rental and lease agreements
which have initial or remaining terms in excess of one year at December 31, 2002
are as follows:

|                                               | Capital |  | Operating
|---------------------------------------------- | ------- |  | ---------
|
|2003                                           |         |  | 3        
|2004                                           |         |  | 3        
|2005                                           |         |  | 2        
|2006                                           |         |  | 2        
|2007                                           |         |  | 2        
|Later years                                    |         |  | 5        
|Sublease income                                |         |  |         
|                                               |         |  |          
|Minimum lease commitments                      |         |  | 17       
|                                               |         |  |          
|Less amounts representing interest             |         |  | 4        
|                                               |         |  |          
|Present value of net minimum lease obligations |         |  | 13       
|                                               |         |  |          

The
related assets for capital leases are included in machinery and equipment in the
consolidated balance sheets.

Management
expects that, in the normal course of business, leases that expire will be
renewed or replaced by other leases.

## 23.
Financial Instruments

In
the normal course of business, Celanese uses various financial instruments,
including derivative financial instruments, to manage risks associated with
interest rate, currency, certain raw material price and stock based compensation
exposures. Celanese does not use derivative financial instruments for
speculative purposes.

Interest Rate Risk Management

Celanese
enters into interest rate swap agreements to reduce the exposure of interest rate risk
inherent in Celaneses outstanding debt. Celaneses interest rate derivative
policy is to lock in borrowing rates to achieve a desired level of fixed/floating rate
debt. Celanese had open interest rate swaps with a notional amount of 286 million
and 340 million at December 31, 2002 and 2001, respectively. Celanese believes its
credit risk exposure related to counterparty default on instruments is not material.
Celanese recognized net interest expense from hedging activities relating to interest rate
swaps of 13 million in 2002 and 6 million in 2001. As of December 31, 2002,
Celaneses interest rate swaps, designated as cash flow hedges, resulted in an
increase in total assets and total liabilities and a decrease in shareholders equity
of 4 million, 17 million and 8 million, net of related income tax of
4 million, respectively. During the year ended December 31, 2002, the Company
recorded a net loss of 3 million in interest and other income, net, for the
ineffective portion of the interest rate swaps. As of December 31, 2001, Celaneses
interest rate swaps resulted in an increase in total assets and total liabilities and a
decrease in shareholders equity of 2 million, 11 million and 4
million, net of related income tax of 2 million, respectively. During the year ended
December 31, 2001, the Company recorded a net loss of 5 million in interest and
other income, net for the ineffective portion of the interest rate swaps. The amount of
losses expected to be reclassified from accumulated other comprehensive income (loss) into
earnings within the next twelve months is not currently determinable.

F-40

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 23.
Financial Instruments  (continued)

Foreign Exchange Risk Management

Certain
Celanese entities have receivables and payables denominated in currencies other
than their respective functional currencies, which creates foreign exchange
risk. Accordingly, Celanese may enter into foreign currency forwards and options
to minimize its exposure to foreign currency fluctuations. The foreign currency
contracts are fair value hedges mainly for booked exposure and, in some cases,
cash flow hedges for anticipated exposure.

Contracts
with notional amounts totaling approximately 955 million and 1,013
million at December 31, 2002 and 2001, respectively, are predominantly in U.S.
dollars, British pound sterling, Japanese yen, and Canadian dollars. Certain of
Celaneses foreign currency forward contracts did not meet the criteria of
SFAS No. 133 to qualify for hedge accounting. Celanese recognizes net foreign
currency transaction gains or losses on the underlying transactions, which are
offset by losses and gains related to foreign currency forward contracts. During
the years ended December 31, 2002 and 2001, Celanese hedged all of its dollar
denominated intercompany loans held by euro denominated entities therefore,
there was no material net effect from foreign exchange gains or losses in
interest and other income, net. During the year ended December 31, 2000, these
contracts hedged only a portion of Celanese dollar denominated intercompany
loans held by euro denominated entities. As a result, a net gain of
approximately 30 million from foreign exchange gains or losses was
recorded to interest and other income, net in 2000.

Commodity Risk Management

Celanese
recognized losses of less than 1 million and 2 million from natural
gas swap contracts in 2002 and 2001, respectively. There was no material impact
on the balance sheet at December 31, 2002 and December 31, 2001. The effective
portion of unrealized gains and losses associated with the cash-settled swap
contracts of 1 million and less than 1 million at December 31, 2002
and December 31, 2001 are recorded as a component of accumulated other
comprehensive income (loss) until the underlying hedged transactions are
reported in earnings. The notional amount of these outstanding swaps at December
31, 2002 is not material.

Stock Based Compensation Risk Management

During
2001, Celanese purchased call options for one million shares of Celanese stock
to partially offset its exposure of the 2000 Celanese LTIP. These options have a
maturity of two years, a strike price of 19.56 per share and an average
premium of 4.39 per share. The options allow settlement in cash only. The
options had a market value as of December 31, 2002 of 2 million, which was
recorded as an increase to accumulated other comprehensive income (loss).

As
of December 31,1999, Celanese purchased call options to purchase 1.2 million
shares of Celanese stock to offset its exposure of the 1999 Celanese LTIP and
1999 Celanese EPP. These options had a maturity of six months, a strike price of
16.37 per share and an average premium of 3.16 per share so that the
total premium paid through December 31, 1999 amounted to 4 million. The
market value of these options at December 31, 1999 was 4 million. As the
options allowed settlement in either cash or stock, at the choice of Celanese,
4 million was recorded as a decrease to additional paid in capital. In
2000, Celanese settled the call options to purchase 1.2 million shares of
treasury stock. As a result, additional paid-in-capital and treasury stock
increased by 4 million each.

F-41

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 23.
Financial Instruments  (continued)

Fair Value of Financial Instruments

Summarized
below are the carrying values and estimated fair values of Celaneses
financial instruments as of December 31, 2002 and 2001. For these purposes, the
fair value of a financial instrument is the amount at which the instrument could
be exchanged in a current transaction between willing parties.

|                                                | 2002 |  | 2001
|----------------------------------------------- | ---- |  | ----
|
|
|Other assets  investments                      |      |  | 239 
|Long-term debt                                  |      |  | 420 
|Pension funds in non-qualified trust            |      |  | 107 
|Debt-related derivative instruments             |      |  | (25 
|Foreign exchange-related derivative instruments |      |  | 35  
|Call options on Celanese stock                  |      |  | 2   

At
December 31, 2002 and 2001, the fair values of cash and cash equivalents,
receivables, notes payable, trade payables, short-term debt and the current
installments of long-term debt approximate carrying values due to the short-term
nature of these instruments. These items have been excluded from the table.
Additionally, certain long-term receivables, principally insurance recoverables,
are carried at net realizable value. (See Note 24)

Included
in other assets are certain investments accounted for under the cost method and
long-term marketable securities classified as available for sale. In general,
the cost investments are not publicly traded; however, Celanese believes that
the carrying value approximates the fair value.

The
fair value of long-term debt and debt-related financial instruments is estimated
based upon the respective implied forward rates as of December 31, 2002, as well
as quotations from investment bankers and on current rates of debt for similar
type instruments.

## 24.
Commitments and Contingencies

Celanese
is involved in a number of legal proceedings, lawsuits and claims incidental to
the normal conduct of its business, relating to such matters as product
liability, anti-trust, past waste disposal practices and release of chemicals
into the environment. While it is impossible at this time to determine with
certainty the ultimate outcome of these proceedings, lawsuits and claims,
management believes, based on the advice of legal counsel, that adequate
provisions have been made and that the ultimate outcome will not have a material
adverse effect on the financial position of Celanese, but may have a material
adverse effect on the results of operations or cash flows in any given
accounting period. (See Note 25)

Plumbing Actions

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

F-42

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 24.
Commitments and Contingencies  (continued)

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

Developments
under this  matter are as follows:

| |  |  | Certification has been denied in putative class actions pending in Florida and
South Carolina state courts. Although plaintiffs subsequently sought to bring
actions individually, they were dismissed and are on appeal.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | In April 2000, the U.S. District Court for the District of New Jersey denied
class certification for a putative class action (of insurance companies with
respect to subrogation claims). The plaintiffs appeal to the Third Circuit
Court of Appeals was denied in July 2000 and the case was subsequently
dismissed. In September 2000, a similar putative class action seeking
certification of the same class that was denied in the New Jersey matter was
filed in Tennessee state court. The court denied certification in March 2002,
and plaintiffs are attempting an appeal. Cases are continuing on an individual
basis.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Class certification of recreational vehicle owners was denied by the Chancery
Court of Tennessee, Weakley County in July 2001, and cases are proceeding on an
individual basis.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | The U.S. District Court for the Eastern District of Texas denied certification
of a putative class action in March 2002. Plaintiffs are also attempting to
appeal this ruling.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Of the three putative class actions pending in Canadian courts, one was denied
class certification while the other two are still pending. The court in a
putative class action pending in the U.S. Virgin Islands denied certification to
a U.S. territories-wide class and dismissed Celanese on jurisdictional grounds.
Plaintiffs are seeking reconsideration of those rulings.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In
November 1995, CNA Holdings, DuPont and Shell entered into national class action
settlements, which have been approved by the courts. The settlements call for
the replacement of plumbing systems of claimants who have had qualifying leaks,
as well as reimbursements for certain leak damage. Furthermore, the three
companies had agreed to fund such replacements and reimbursements up to U.S.
$950 million, (as of December 31, 2002, the funding is now U.S. $1,070 million
due to additional contributions and funding commitments, made primarily by other
parties.) There are additional pending lawsuits in approximately 10
jurisdictions not covered by this settlement; however, these cases do not
involve (either individually or in the aggregate) a large number of homes, and
management does not expect the obligations arising from these lawsuits to have a
material adverse effect on CNA Holdings.

In
1995, CNA Holdings and Shell settled the claims of certain individuals, owning
110,000 property units for an amount not to exceed U.S. $170 million. These
claimants are also eligible for a replumb of their homes in accordance with the
terms similar to those of the national class action settlement. CNA
Holdings and Shells contributions under this settlement were subject
to allocation as determined by binding arbitration.

CNA
Holdings has accrued its best estimate of its share of the plumbing actions. At
December 31, 2002, Celanese had remaining accruals of 81 million for this
matter, of which 22 million is included in current liabilities. Management
believes that the plumbing actions are adequately provided for in the
consolidated financial statements. However, if Celanese were to incur an
additional charge for this matter, such a charge would not be expected to have a
material adverse effect on the financial position, but may have a material
adverse effect on the results of operations or cash flows of Celanese in any
given accounting period. Celanese has reached settlements with a majority of CNA
Holdings insurers specifying their responsibility for these claims; as a
result, Celanese has recorded receivables relating to the anticipated recoveries
from certain third party insurance carriers. These receivables are based on the
probability of collection, an opinion of external counsel, the settlement
agreements with Celaneses insurance carriers whose coverage level exceeds
the receivables and the status of current discussions with other insurance
carriers. As of December 31, 2002, Celanese had recorded 70 million in
outstanding insurance claim receivables. Collectibility could vary depending on
the financial status of the insurance carriers.

F-43

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 24.
Commitments and Contingencies  (continued)

Sorbates Litigation

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

In
addition, during 1999 and 2000, nineteen civil antitrust actions, seeking
monetary damages and other relief for alleged conduct involving the sorbates
industry were filed by private parties in U.S. Federal and various state courts
as well as in the Canadian provinces of Ontario and Quebec. During 2000 and
2001, Hoechst and Nutrinova entered into settlement agreements relating to
actions pending in the states of California, Wisconsin, Kansas, New Mexico and
Tennessee. Pursuant to these settlement agreements, all of which have been
approved by the courts, Hoechst and Nutrinova paid a total of about U.S. $6
million. Seven separate actions involving direct purchasers of sorbates had been
filed in the U.S. District Court for the Northern District of California and
were consolidated into a single action in June 1999. In March 2000, the parties
entered into a settlement of this consolidated civil antitrust federal action.
Under the settlement agreement, Hoechst and the named Celanese subsidiaries paid
approximately U.S. $21 million, U.S. $6 million of which was returned in
December 2001 based on the volume of purchases made by companies that elected to
opt out of the class settlement. In late 2001, these opt out plaintiffs also
entered into settlement agreements with Hoechst and the named Celanese
subsidiaries. Two remaining private actions are still pending.

In
July 2001, Hoechst and Nutrinova entered into an agreement with the Attorneys
General of 33 states, pursuant to which the statutes of limitations were tolled
pending the states investigations. In October 2002, the Attorneys General
for New York, Illinois, Ohio, Nevada, Utah and Idaho filed suit on behalf of
indirect purchasers in their respective states. Each of these actions is in the
early stages of litigation and, in some cases, Hoechst, Nutrinova and the other
named affiliates have not yet been served. In the fall of 2002, the Attorneys
General of Connecticut, Florida, South Carolina and Washington gave notice of
intent to take legal action against sorbates manufacturers, but have not yet
done so. Hoechst and Nutrinova have not received any communications from any
other Attorney General, but they may be forthcoming.

In
January 2003, the European Commission served Hoechst, Nutrinova Nutrition
Specialties & Food Ingredients GmbH and a number of foreign competitors with
a statement of objections alleging unlawful, anticompetitive behavior affecting
the European sorbates market. As in the U.S. and Canada, Hoechst and Nutrinova
have cooperated with the Commissions investigation related to the sorbates
industry. A decision is expected in the second half of 2003. Depending on the
outcome, fines may be imposed.

Based
on the advice of external counsel and a review of the existing facts and
circumstances relating to the matter, including the status of claims filed and
settled, Celanese has remaining accruals of 29 million at December 31,
2002 for the estimated loss relative to this matter including potential risks in
other jurisdictions. Celanese recorded this amount prior to 2002. Although the
outcome of this matter cannot be predicted with certainty, managements
best estimate of the range of possible future losses and fines, including any
that may result from the above noted governmental proceedings (in addition to
the amounts already recorded in the consolidated financial statements), as of
December 31, 2002 is between 0 and 35 million. The estimated range
of such possible future losses is managements best estimate based on the
advice of external counsel taking into consideration potential fines and claims,
both civil and criminal, that may be imposed or made in other jurisdictions.

F-44

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 24.
Commitments and Contingencies  (continued)

Pursuant
to the Demerger Agreement, Hoechst has agreed to indemnify Celanese for 80
percent of any costs Celanese may incur relative to this matter. Accordingly,
Celanese has recognized a receivable from Hoechst and a corresponding
contribution of capital from this indemnification. The additional reserve and
the estimated range of possible future losses, noted above, for this matter are
gross of any recovery from Hoechst. Celanese believes that any resulting
liabilities, net of amounts recoverable from Hoechst, will not, in the
aggregate, have a material adverse effect on Celaneses financial position,
but may have a material adverse effect on results of operations or cash flows in
any given accounting period.

Guarantees

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

Celanese
has accrued for all probable and reasonably estimable losses associated with all known
matters or claims that have  been brought to its attention. (See Note 25)

These known obligations
include the following:

Demerger Obligations

| | Celanese
has obligations to indemnify Hoechst for various liabilities under the Demerger
Agreement as follows:
| | --------------------------------------------------------------------------------------------------------------

| |  |  | Celanese
agreed to indemnify Hoechst for environmental liabilities associated  with contamination
arising under 19 divestiture agreements entered into by  Hoechst prior to the demerger.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Celaneses
obligation to indemnify Hoechst is subject to the following thresholds:
| | ----------------------------------------------------------------------------------

| |  |  | Celanese
will indemnify Hoechst against those liabilities up to 250 million;
| | - |  | -----------------------------------------------------------------------------

| |  |  | Hoechst
will bear those liabilities exceeding 250 million, however  Celanese will reimburse
Hoechst for one-third of those liabilities for amounts  that exceed 750 million in
the aggregate.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
December 31, 2002, Celaneses obligation regarding two agreements had been  settled.
The aggregate amount of environmental indemnifications under the  remaining divestiture
agreements which provide for monetary limits is  approximately 750 million. Three
of the divested agreements do not provide  for monetary limits.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | As
of December 31, 2002, Celanese has spent in the aggregate 32 million for
environmental contamination liabilities in connection with these divestiture  agreements.
Based on Celaneses estimate of the probability of loss under  this indemnification,
Celanese has reserves of 57 million as of December  31, 2002, for this contingency.
Where Celanese is unable to reasonably determine  the probability of loss or estimate
such loss under an indemnification, Celanese  has not recognized any related liabilities.
(See Note 25)
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Celanese
has also undertaken in the Demerger Agreement to indemnify Hoechst to  the extent that
Hoechst is required to discharge liabilities, including tax  liabilities, associated with
businesses that were included in the demerger where  such liabilities were not demerged,
due to legal restrictions on the transfers  of such items. These indemnities do not
provide for any monetary or time  limitations. Celanese has not provided for any reserves
associated with this  indemnification. Celanese did not make any payments to Hoechst in
either 2001 or  2002 in connection with this indemnification.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-45

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 24.
Commitments and Contingencies  (continued)

| | Divestiture
Obligations
| | -----------------------

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

| | Since
the demerger, Celanese has divested in the aggregate over 20 businesses,  investments and
facilities, through agreements containing indemnifications or  guarantees. Many of the
obligations contain monetary and/or time limitations,  ranging from one year to 30 years,
the aggregate amount of guarantees provided  for under these agreements is approximately
2.5 billion as of December 31,  2002. Other agreements do not provide for any
monetary or time limitations.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
divestiture agreements generally provide that Celanese and its predecessor  companies
will indemnify the purchaser against all claims for environmental  liabilities which
arise out of conditions existing prior to the closing of the  purchase. As a general
rule, irrespective of the contractual indemnities  provided to the purchasers, Celanese
and its predecessor companies remain liable  under applicable law to third party
claimants in respect of these pre-closing  conditions, and as a result, Celanese does not
believe that the contractual  indemnities given by Celanese and its predecessor
companies, as a practical  matter, increase its environmental exposure.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Based
on Celaneses historical claims experience and its knowledge of the sites  and
businesses involved, the Company feels that it is adequately reserved for  these matters.
As of December 31, 2002, Celanese has reserves in the aggregate  of 58 million for
all such environmental matters.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Plumbing
Insurance Indemnifications
| | -----------------------------------

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

| | In
certain of the agreements, Celanese received a fixed settlement amount. The  indemnities
under these agreements generally are limited to, but in some cases  are greater than, the
amount received in settlement from the insurance company.  The maximum exposure under
these indemnifications is 90 million. Other  settlement agreements have no stated
limits.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

| | Celanese
has reserves associated with these product liability claims. See Plumbing Actions above.
| | -------------------------------------------------------------------------------------------------

| | Other
Obligations
| | -----------------

| |  |  | Celanese
is secondarily liable under a lease agreement pursuant to which  Celanese 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 January 1, 2003 to April 30,
2012 is estimated to be approximately 66  million (U.S. $63 million).
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-46

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 24.
Commitments and Contingencies  (continued)

| |  |  | In
May 2001, Celanese issued a payment guarantee to a bank to secure the  repayment of a
loan by Celaneses former affiliate Vintron GmbH.  Celaneses obligation under
the guarantee as of December 31, 2002 amounts  to 31 million plus interest and
additional costs. Pursuant to its terms,  the guarantee may be released upon the final
registration of the collateral  given by Vintron GmbH in favor of the bank. Celanese has
been advised that all  formal requirements for the registration have been fulfilled and
the application  has been submitted to the government agency responsible for rights
related to  real estate matters. Celanese expects to be released from this guarantee
during  the first quarter of 2003.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | Celanese
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
7 million, which is unlimited in term.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Other Matters

In
the normal course of business, Celanese enters into commitments to purchase
goods and services over a fixed period of time. Celanese maintains a number of
take-or-pay contracts for the purchase of raw materials and
utilities. At December 31, 2002, there were outstanding commitments of
approximately 1.1 billion under take-or-pay contracts. Celanese does not
expect to incur any losses under these contractual arrangements. Additionally,
at December 31, 2002, there were outstanding commitments relating to capital
projects of approximately 31 million.

In
July 2000, Celanese began production at its acetic acid plant in Singapore.
Shortly thereafter, production was severely constrained by a suppliers
inability to deliver carbon monoxide to the plant on a consistent and reliable
basis. As a result, Celanese declared force majeurefor acetic acid and
vinyl acetate monomer to its Asian customers. Force majeureremained in
effect until March 16, 2001. Celanese and the supplier came to an agreement on
March 20, 2001, whereby Celanese received a compensation payment of 35
million, 4 million of which was recognized in 2000. Celanese received a
subsequent payment in the second quarter 2001 of 8 million for
compensation related to April and May 2001. These problems associated with the
carbon monoxide supplier were resolved in the first half of 2001. The carbon
monoxide supplier experienced operational difficulties in the third quarter
2002, which were corrected during the fourth quarter. There was minimal impact
on full year 2002 operating results due to insurance recoveries.

## 25.
Environmental

General Celanese is subject to environmental laws and regulations worldwide
which impose limitations on the discharge of pollutants into the air and water
and establish standards for the treatment, storage and disposal of solid and
hazardous wastes. Celanese believes that it is in substantial compliance with
all applicable environmental laws and regulations. Celanese is also subject to
retained environmental obligations specified in various contractual agreements
arising from divestiture of certain businesses by Celanese or one of its
predecessor companies.

In
2002, Celaneses worldwide expenditures, including expenditures for legal
compliance, internal environmental initiatives and remediation of active,
orphan, divested and U.S. Superfund sites totaled 102 million, of which
4 million was for capital projects. Environmental reserves for remediation
matters were 199 million and 341 million at December 31, 2002 and
2001, respectively. (See Notes 14 and 16)

It
is anticipated that stringent environmental regulations will continue to be
imposed on the chemical industry. Although Celanese cannot predict with
certainty future environmental expenditures, especially expenditures beyond
2003, management believes that the current spending trends will continue.

F-47

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 25.
Environmental  (continued)

Remediation Due to its industrial history and through retained contractual
obligations, Celanese has the obligation to remediate specific areas on its own
sites as well as on divested, orphan or U.S. Superfund sites. In addition, as
part of the Demerger Agreement with Hoechst, a specified portion of the
responsibility for environmental liabilities from a number of Hoechst
divestitures was transferred to Celanese. Celanese has provided for such
obligations when the event of loss is probable and reasonably estimable.

In
2002, 2001 and 2000, the total remediation efforts charged to earnings before
tax amounted to 7 million, 8 million and 23 million,
respectively. Celanese recognized 2 million of accretion expense in 2002
and 3 million of accretion expense in both 2001 and 2000 related to a
discounted liability for certain fixed period remediation projects. The discount
rate applied to these projects is 6 percent. Management believes that the
environmental related costs will not have a material adverse effect on the
financial position of Celanese, but may have a material adverse effect on the
results of operations or cash flows in any given accounting period.

Celanese
did not record any insurance recoveries related to these matters in 2002 and
recorded 1 million in 2001. There are no receivables for recoveries at
December 31, 2002 and 2001.

German
InfraServs On January 1, 1997, coinciding with a reorganization of the Hoechst
businesses in Germany, real estate service companies (InfraServs) were created
to own directly the land and property and to provide various technical and administrative
services at each of the manufacturing locations. Celanese has manufacturing operations at
three locations in Germany: Oberhausen, Frankfurt am Main-Höchst, and Kelsterbach,
and is holding interests in the companies which own and operate the former Hoechst sites
in Gendorf, Knapsack and Wiesbaden.

InfraServs
are liable for any residual contamination and other pollution because they own
the real estate on which the individual facilities operate. In addition,
Hoechst, as the responsible party under German public law, is liable to third
parties for all environmental damage that occurred while it was still the owner
of the plants and real estate. The contribution agreements entered into in 1997
between Hoechst and the respective operating companies, as part of the
divestiture of these companies, provide that the operating companies will
indemnify Hoechst against environmental liabilities resulting from the
transferred businesses. Additionally, the InfraServs have agreed to indemnify
Hoechst against any environmental liability arising out of or in connection with
environmental pollution of any site. Likewise, in certain circumstances Celanese
could be responsible for the elimination of residual contamination on a few
sites that were not transferred to InfraServ companies, in which case Hoechst
must reimburse Celanese for two-thirds of any costs so incurred.

The
partnership agreements provide that, as between the partners, each partner is
responsible for any contamination caused predominantly by such partner. Any
liability, which cannot be attributed to an InfraServ partner and for which no
third party is responsible, is required to be borne by the InfraServ in
question.

In
view of this potential obligation to eliminate residual contamination, the
InfraServs, primarily relating to equity and cost affiliates which are not
consolidated by Celanese, have recorded provisions totaling about 58
million and 119 million as of December 31, 2002 and 2001, respectively.
The reduction in this provision reflects the sale of InfraServ GmbH & Co.
Deponie Knapsack KG, to Trienekens AG, a company active in all areas of waste
management, which was subsequently merged into RWE Umwelt AG. Deponies
financial assets, including a cash reserve of 58 million for measures
ordered by German authorities, mainly for landfill and land reclamation
activities, as well as all of Deponies liabilities (including those
corresponding to the cash reserve) were transferred to the buyer, thereby
reducing Celaneses environmental provision by the corresponding amount.

If
the InfraServ companies default on their respective indemnification obligations
to eliminate residual contamination, the owners of the remaining participation
in the InfraServ companies have agreed to fund such liabilities, subject to a
number of limitations. To the extent that any liabilities are not satisfied by
either the InfraServs or their owners, these liabilities are to be borne by
Celanese in accordance with the Demerger Agreement. However, Hoechst will
reimburse Celanese for two-thirds of any such costs. Likewise, in certain
circumstances Celanese could be responsible for the elimination of residual
contamination on a few sites that were not transferred to InfraServ companies,
in which case Hoechst must reimburse Celanese for two-thirds of any costs so
incurred.

F-48

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 25.
Environmental  (continued)

The
German InfraServs are owned partially by Celanese, as noted below, and the
remaining ownership is held by various other companies. Celaneses
ownership interest and environmental liability participation percentages for
such liabilities which cannot be attributed to an InfraServ partner were as
follows at December 31, 2002:

|Company                             | Ownership % |  | Liability %
|----------------------------------- | ----------- |  | -----------
|InfraServ GmbH & Co. Gendorf KG     |             |  | 39.0%      
|InfraServ GmbH & Co. Oberhausen KG  |             |  | 84.0%      
|InfraServ GmbH & Co. Knapsack KG    |             |  | 27.0%      
|InfraServ GmbH & Co. Kelsterbach KG |             |  | 100.0%     
|InfraServ GmbH & Co. Höchst KG      |             |  | 31.2%      
|InfraServ GmbH & Co. Wiesbaden KG   |             |  | 17.9%      
|InfraServ Verwaltungs GmbH          |             |  | 100.0%     

U.S.
Superfund Sites In the U.S., Celanese may be subject to substantial
claims brought by U.S. Federal or state regulatory agencies or private
individuals pursuant to statutory authority or common law. In particular,
Celanese has a potential liability under the U.S. Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
related state laws (collectively referred to as Superfund) for
investigation and cleanup costs at approximately 50 sites. At most of these
sites, numerous companies, including certain companies comprising Celanese, or
one of its predecessor companies, have been notified that the EPA, state
governing bodies or private individuals consider such companies to be
potentially responsible parties (PRP) under Superfund or related
laws. The proceedings relating to these sites are in various stages. The cleanup
process has not been completed at most sites and the status of the insurance
coverage for most of these proceedings is uncertain. Consequently, Celanese
cannot determine accurately its ultimate liability for investigation or cleanup
costs at these sites. At December 31, 2002 and 2001, Celanese had provisions
totaling 12 million and 16 million, respectively, for U.S. Superfund
sites and utilized 1 million and 2 million of these reserves in 2002
and 2001, respectively. There were no additional provisions recorded during 2002
or 2001.

As
events progress at each site for which it has been named a PRP, Celanese
accrues, as appropriate, a liability for site cleanup. Such liabilities include
all costs that are probable and can be reasonably estimated. In establishing
these liabilities, Celanese considers its shipment of waste to a site, its
percentage of total waste shipped to the site, the types of wastes involved, the
conclusions of any studies, the magnitude of any remedial actions that may be
necessary, and the number and viability of other PRPs. Often Celanese will join
with other PRPs to sign joint defense agreements that will settle, among PRPs,
each partys percentage allocation of costs at the site. Although the
ultimate liability may differ from the estimate, Celanese routinely reviews the
liabilities and revises the estimate, as appropriate, based on the most current
information available.

Hoechst
Liabilities In connection with the demerger, Celanese agreed to
indemnify Hoechst for the first 250 million of future remediation
liabilities for environmental damages arising from 19 specified divested Hoechst
entities. As of December 31, 2002 Celanese has reserves approximating 57
million for these matters that are included as a component of the total
environmental reserves discussed above. Celanese has made payments through
December 31, 2002 of 32 million. If such future liabilities exceed
250 million, Hoechst will bear such excess up to an additional 500
million. Thereafter, Celanese will bear one-third and Hoechst will bear
two-thirds of any further environmental remediation liabilities. Where Celanese
is unable to reasonably determine the probability of loss or estimate such loss
under this indemnification, Celanese has not recognized any liabilities relative
to this indemnification.

F-49

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 26.
Special Charges

Special
charges include provisions for restructuring and other expenses and income
incurred outside the normal course of operations. Restructuring provisions
represent costs related to severance and other benefit programs, as well as
costs incurred in connection with a decision to exit non-strategic businesses
and the related closure of facilities. These measures are based on formal
management decisions, establishment of agreements with the employees
representatives or individual agreements with the affected employees as well as
the public announcement of the restructuring plan.

Effective
October 2002, Celanese early adopted SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activitiesand accordingly applied the
statement prospectively to exit or disposal activities initiated after September
30, 2002. SFAS No. 146 addresses financial accounting and reporting for costs
associated with exit or disposal activities. It nullifies EITF Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). The principal difference between SFAS No.146 and EITF Issue
No. 94-3 relates to the recognition of a liability for a cost associated with an
exit or disposal activity. SFAS No. 146 requires recognition only when the
liability is incurred. In contrast, under Issue No. 94-3, a liability was recognized
when the company committed to an exit plan. Additionally, SFAS No. 146
stipulates that the liability be measured at fair value and adjusted for changes
in cash flows.

The
components of the 2002 and 2001 restructuring reserves were as follows:

|                                           | EmployeeTerminationBenefits |  | Plant/OfficeClosures |   | Total
|------------------------------------------ | --------------------------- |  | -------------------- | - | -----
|
|Restructuring reserve at December 31, 2000 |                             |  | 36                   |   |      
|Restructuring additions                    |                             |  | 129                  |   |      
|Cash and noncash uses                      |                             |  | (64                  | ) |      
|Other changes                              |                             |  | (4                   | ) |      
|Currency translation adjustments           |                             |  | 2                    |   |      
|                                           |                             |  |                      |   |      
|Restructuring reserve at December 31, 2001 |                             |  | 99                   |   |      
|Restructuring additions                    |                             |  | 11                   |   |      
|Cash and noncash uses                      |                             |  | (64                  | ) |      
|Other changes                              |                             |  | (5                   | ) |      
|Currency translation adjustments           |                             |  | (4                   | ) |      
|                                           |                             |  |                      |   |      
|Restructuring reserve at December 31, 2002 |                             |  | 37                   |   |      
|                                           |                             |  |                      |   |      

Included
in the above restructuring reserves of 64 million and 155 million at
December 31, 2002 and 2001, respectively, are 9 million and 20
million, respectively, of long-term reserves included in other liabilities.

In
2002, Celanese recorded special charges totaling 1 million of income,
which consisted of 19 million of restructuring charges, 10 million
of income from favorable adjustments to restructuring reserves recorded in 2001
and 2000, 1 million of income from reimbursements from third party site
partners related to prior year initiatives, and 9 million of income from
other special charges. The 19 million of additions to the restructuring
reserve included employee severance costs of 11 million and plant and
office closure costs of 8 million.

The
19 million of additions to the restructuring reserve in 2002 included 10 million under
SFAS No. 146 and 9 million under  EITF Issue No. 94-3.

F-50

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 26.
Special Charges  (continued)

## SFAS
No. 146 Initiatives

|                                     | EmployeeTerminationBenefits |  | Plant/OfficeClosures |  | Total
|------------------------------------ | --------------------------- |  | -------------------- |  | -----
|
|Costs incurred in the current period |                             |  | 4                    |  |      
|Cumulative costs incurred to date    |                             |  | 4                    |  |      
|Total costs expected to be incurred  |                             |  | 9                    |  |      

Initiatives
that commenced during the fourth quarter 2002, and recorded under SFAS No. 146,
represented 4 million of restructuring additions for employee termination
benefits and 6 million of restructuring additions for plant and office
closure costs. As a result of the sale of the global allylamines and U.S.
alkylamines businesses in 2002, severance costs are estimated to total 2
million, of which less than 1 million were incurred in 2002 and are
included in earnings (loss) from operation of discontinued operations in the
consolidated statements of operations. The remaining costs are expected to be
incurred in 2003.

|                                     | AcetylProducts |  | ChemicalIntermediates |  | Ticona |  | Total
|------------------------------------ | -------------- |  | --------------------- |  | ------ |  | -----
|
|Costs incurred in the current period |                |  | 3                     |  |        |  | 1    
|Cumulative costs incurred to date    |                |  | 3                     |  |        |  | 1    
|Total costs expected to be incurred  |                |  | 3                     |  |        |  | 3    

## Acetyl
Products and Chemical Intermediates

Employee
severance costs recorded as a result of the streamlining of chemical production
facilities in the United States and Germany amounted to 3 million in 2002.
Additional costs for this initiative are estimated to be 2 million in
2003.

## Ticona

Ticona
plans to concentrate its European manufacturing operations in Germany and as a
result will cease its manufacturing operations in Telford, United Kingdom by
mid-year 2003. As a result, fixed asset impairments totaling 4 million
were recorded in 2002. Additional costs of approximately 7 million
relating to employee severance and lease cancellation costs are expected to be
incurred in 2003. With the construction of a new and expanded GUR® plant in
Bishop, Texas, the GUR operations in Bayport, Texas were transferred to new
facility. Decommissioning and demolition costs associated with the Bayport
closure are estimated to be 2 million, all of which were accrued in 2002.

## EITF
Issue No. 94-3 Initiatives

Project
Focus, initiated in early 2001, set goals to reduce trade working
capital by 100 million compared to end of year 2000 levels, limit capital
expenditures to a maximum of the 2000 level of 235 million and contribute
100 million to earnings before interest, taxes, depreciation and
amortization (EBITDA) from programs to increase efficiency. Project
Forward was announced at the end of August 2001 and initiated
additional restructuring and other measures to reduce costs and increase
profitability.

Restructuring
initiatives that commenced during the first three quarters of 2002, and recorded
under EITF Issue No. 94-3, represented 7 million of restructuring
additions for employee severance costs and 2 million of restructuring
additions for plant and office closures costs.

F-51

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 26.
Special Charges  (continued)

Employee
severance costs consisted primarily of 3 million for the shutdown of the
nylon polymer unit in Bishop, Texas, 1 million for personnel in the PVOH
business, and 3 million for adjustments related to 2001 Forward
initiatives.

Plant
and  office closure costs consisted mainly of asset write-offs of 2 million for
the nylon polymer unit shutdown in Bishop, Texas.

The
10 million of favorable adjustments of prior year restructuring reserves
consisted of an 8 million adjustment to the 2001 reserves and a 2
million adjustment to the 2000 reserves. The 2001 adjustment was primarily due
to lower than expected personnel and closure costs associated with the
streamlining of chemical facilities in the United States, Canada, and Germany.
The 2000 adjustment was due to lower than expected demolition costs for the
Acetyl Products production facility in Knapsack, Germany.

The
other special charges income of 9 million related to a reduction in
reserves associated with settlements of environmental indemnification
obligations associated with former Hoechst entities.

In
2001, Celanese recorded special charges totaling 496 million, which
consisted of 234 million of restructuring charges, which were reduced by
8 million of income for reimbursements from third party site partners and
income from forfeited pension plan assets, 19 million of favorable
adjustments to restructuring reserves recorded in 2000 and 2001 and 289
million of other special charges.

The
234 million of additions to the restructuring reserve included employee
severance costs of 129 million and plant and office closure costs of
105 million. Employee severance costs consisted primarily of 42
million for the streamlining of chemical production and administrative positions
in the United States, Germany and Singapore, 28 million for administrative
and production positions at Ticona in the United States and Germany, 22
million for the restructuring of production and administrative positions in
Mexico, 8 million for the closure of the acetic acid, pentaerythritol and
vinyl acetate monomer units and the elimination of administrative positions in
Edmonton, 7 million for the elimination of corporate administrative
positions, 6 million resulting from the closure of a chemical research and
development center in the United States, 5 million for the shut-down of
acetate filament production at Lanaken, Belgium and 11 million for the
shut-down of acetate filament production at Rock Hill, South Carolina.

The
105 million of additions to the restructuring reserve related to plant and
office closures consisted mainly of 74 million for fixed asset
impairments, the cancellation of supply contracts, other required
decommissioning and environmental closure costs relating to the closure of the
acetic acid, pentaerythritol and vinyl acetate monomer units in Edmonton. Also
included in plant and office closure costs were 11 million for fixed asset
impairments, contract cancellation and other costs associated with the closure
of the chemical research and development center in the United States, 4
million of fixed asset impairments and other closure costs related to the
closure of a chemical distribution terminal in the United States, 9
million for fixed asset impairments and shut-down costs at the acetate filament
facility in Lanaken, 6 million for equipment shutdown and other
decommissioning costs for the acetate filament production facility at Rock Hill
and 1 million associated with the cancellation of a lease associated with
the closure of an administrative facility in Germany.

The
19 million of favorable adjustments of prior year restructuring reserves
consisted of a 14 million adjustment to the 2000 reserves and a 5
million adjustment to the 1999 reserves. The entire 2000 adjustment was due to
lower than expected demolition and decommissioning costs for the Acetyl Products
production facility in Knapsack, Germany. This adjustment resulted from a third
party site partner assuming ownership of the existing facility and obligations.
Of the 1999 adjustment, 3 million related to the reversal of a reserve for
closure costs for a parcel of land in Celaya, Mexico that Celanese donated to
the Mexican government, which assumed the remaining liabilities. The 1999
adjustment also included 2 million relating to less than anticipated
severance costs for Ticona employees in Germany.

F-52

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 26.
Special Charges  (continued)

The
other special charges of 289 million consisted of Chemical Intermediates
goodwill impairment of 243 million and fixed asset impairments of 57
million, Acetyl Products fixed asset impairments of 18 million and 6
million for the relocation of acetate filament production assets associated with
restructuring initiatives.

Also
included in other special charges was 31 million of income from the
receipt of higher than expected insurance reimbursements linked to the plumbing
cases (see Note 24) and 4 million of income related to a net reduction in
reserves associated with settlements of environmental indemnification and other
obligations associated with former Hoechst entities.

In
2000, Celanese recorded special charges totaling 21 million, which
consisted of 95 million of additions to the restructuring reserve,
59 million of favorable adjustments to restructuring reserves recorded in
1999, 3 million of costs for the relocation of production assets
associated with restructuring initiatives, and 18 million of income from
the receipt of higher than expected insurance reimbursements linked to the
plumbing cases. (See Note 24)

The
95 million of restructuring charges included employee severance costs of
44 million and plant and office closure costs of 51 million.
Employee severance costs of 31 million related mainly to the reduction of
approximately 170 positions at two U.S. chemical facilities and the closure of a
European Acetyl Products plant. Additionally, severance costs of 11
million were associated with the planned reduction of approximately 115
positions in the Acetate Products business. The plant and office closure charges
of 51 million consisted mainly of contractual obligations and asset
impairments for the closure of an Acetyl Products plant in Europe (47
million).

The
59 million of favorable adjustments to the 1999 restructuring reserves
consisted of employee termination benefits (24 million) and plant and
office closures (35 million). Employee termination benefits were adjusted
by 11 million due largely to unplanned voluntary resignations and by
10 million due to a modification in Ticonas employee severance plan
resulting from an unfavorable tax treatment which affected the severance
benefits to be received by Celaneses employees in Germany. In addition, a
delay in the scheduled closure of a U.S. Acetate Filament production facility
led to a net adjustment of 3 million in restructuring reserves. This
facility was closed in 2001. The adjustments associated with plant and office
closures resulted mainly from the earlier than expected disposals of lease
obligations of former administrative facilities in the U.S. and Canada (28
million). As a result of the need for additional office space due to the
acquisition of PVOH, Celanese cancelled previous plans to rationalize the U.S.
chemical administrative building (4 million). The closure costs of a
Canadian acetate filament facility were lower than estimated (3 million).

Non-restructuring
special charges of 3 million were related to the cost of transferring  acetate
filament equipment within North America resulting from restructuring  initiatives.

F-53

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 27.
Business and Geographical Segments

Information
with respect to Celaneses industry segments follows:

Business Segments

Acetyl
Productsprimarily produces and supplies acetyl products, including acetic  acid,
vinyl acetate monomer and polyvinyl alcohol;

Chemical
Intermediatesproduces and supplies acrylic acid, acrylate esters, organic
solvents and other intermediates;

Acetate
Products primarily produces and supplies acetate filament and acetate tow;

Ticona,
the technical polymers segment, develops and supplies a broad portfolio of high
performance technical polymers; and

Performance
Productsconsists of Nutrinova, the high intensity sweetener and food
protection ingredients business.

The
segment management reporting and controlling systems are based on the same
accounting policies as those described in the summary of significant accounting
policies in Note 2. Celanese evaluates performance based on operating profit,
net earnings, cash flows and other measures of financial performance reported in
accordance with U.S. GAAP. Besides these measures, Management believes that
EBITDA, excluding special charges, is an appropriate measure for evaluating the
performance of its operating segments as it closely reflects cash flow
management. EBITDA, which may be calculated differently by other companies, is
calculated by adding depreciation and amortization expense back to operating
profit. Celanese excludes special charges from EBITDA for better comparability
between periods.

Trade
Working Capital is defined as trade accounts receivable from third parties and
affiliates, net of allowance for doubtful accounts, plus inventories, less trade
accounts payable to third parties and affiliates.

Sales
and revenues related to transactions between segments are generally recorded at
values that approximate third-party selling prices. Revenues and long-term
assets are allocated to countries based on the location of the business. Capital
expenditures represent the purchase of property, plant and equipment.

F-54

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 27.
Business and Geographical Segments  (continued)

|                                 | AcetylProducts |  | ChemicalIntermediates |   | AcetateProducts |  | Ticona |   | PerformanceProducts |  | TotalSegments |   | Reconciliation |  | Consolidated
|-------------------------------- | -------------- |  | --------------------- | - | --------------- |  | ------ | - | ------------------- |  | ------------- | - | -------------- |  | ------------
|
|2002:                            |                |  |                       |   |                 |  |        |   |                     |  |               |   |                |  |             
|Sales to external customers      |                |  | 1,844                 |   |                 |  | 825    |   |                     |  | 670           |   |                |  | 757         
|Inter-segment revenues           |                |  | 79                    |   |                 |  | 82     |   |                     |  |              |   |                |  |            
|Operating profit (loss)          |                |  | 145                   |   |                 |  | (29    | ) |                     |  | 24            |   |                |  | 22          
|EBITDA excluding special charges |                |  | 252                   |   |                 |  | 22     |   |                     |  | 81            |   |                |  | 87          
|Depreciation                     |                |  | 110                   |   |                 |  | 48     |   |                     |  | 57            |   |                |  | 56          
|Amortization                     |                |  |                      |   |                 |  |       |   |                     |  |              |   |                |  | 1           
|Capital expenditures             |                |  | 40                    |   |                 |  | 70     |   |                     |  | 31            |   |                |  | 66          
|Special charges                  |                |  | (3                    | ) |                 |  | 3      |   |                     |  |              |   |                |  | 8           
|Intangible assets, net           |                |  | 548                   |   |                 |  | 13     |   |                     |  | 146           |   |                |  | 327         
|Trade working capital            |                |  | 299                   |   |                 |  | 122    |   |                     |  | 84            |   |                |  | 118         
|Total assets                     |                |  | 1,925                 |   |                 |  | 591    |   |                     |  | 642           |   |                |  | 1,301       
|                                
|2001:                            |                |  |                       |   |                 |  |        |   |                     |  |               |   |                |  |             
|Sales to external customers      |                |  | 2,062                 |   |                 |  | 938    |   |                     |  | 762           |   |                |  | 773         
|Inter-segment revenues           |                |  | 93                    |   |                 |  | 82     |   |                     |  |              |   |                |  |            
|Operating profit (loss)          |                |  | (73                   | ) |                 |  | (374   | ) |                     |  | (32           | ) |                |  | (15         
|EBITDA excluding special charges |                |  | 208                   |   |                 |  | 30     |   |                     |  | 91            |   |                |  | 52          
|Depreciation                     |                |  | 123                   |   |                 |  | 59     |   |                     |  | 63            |   |                |  | 53          
|Amortization                     |                |  | 33                    |   |                 |  | 17     |   |                     |  | 10            |   |                |  | 23          
|Capital expenditures             |                |  | 43                    |   |                 |  | 30     |   |                     |  | 35            |   |                |  | 97          
|Special charges                  |                |  | 125                   |   |                 |  | 328    |   |                     |  | 50            |   |                |  | (9          
|Intangible assets, net           |                |  | 587                   |   |                 |  | 15     |   |                     |  | 174           |   |                |  | 390         
|Trade working capital            |                |  | 280                   |   |                 |  | 165    |   |                     |  | 108           |   |                |  | 93          
|Total assets                     |                |  | 2,055                 |   |                 |  | 657    |   |                     |  | 800           |   |                |  | 1,514       
|                                
|2000:                            |                |  |                       |   |                 |  |        |   |                     |  |               |   |                |  |             
|Sales to external customers      |                |  | 2,023                 |   |                 |  | 975    |   |                     |  | 756           |   |                |  | 923         
|Inter-segment revenues           |                |  | 83                    |   |                 |  | 73     |   |                     |  |              |   |                |  |            
|Operating profit (loss)          |                |  | (10                   | ) |                 |  | (20    | ) |                     |  | 9             |   |                |  | 96          
|EBITDA excluding special charges |                |  | 200                   |   |                 |  | 48     |   |                     |  | 92            |   |                |  | 140         
|Depreciation                     |                |  | 111                   |   |                 |  | 51     |   |                     |  | 65            |   |                |  | 51          
|Amortization                     |                |  | 31                    |   |                 |  | 15     |   |                     |  | 10            |   |                |  | 22          
|Capital expenditures             |                |  | 80                    |   |                 |  | 39     |   |                     |  | 30            |   |                |  | 58          
|Special charges                  |                |  | 68                    |   |                 |  | 2      |   |                     |  | 8             |   |                |  | (29         
|Intangible assets, net           |                |  | 598                   |   |                 |  | 265    |   |                     |  | 176           |   |                |  | 391         
|Trade working capital            |                |  | 432                   |   |                 |  | 223    |   |                     |  | 143           |   |                |  | 192         
|Total assets                     |                |  | 2,251                 |   |                 |  | 1,066  |   |                     |  | 830           |   |                |  | 1,592       

The
reconciliation column includes (a) operations of certain other operating
entities and their related assets, liabilities, revenues and expenses, (b) the
elimination of inter-segment sales, (c) assets and liabilities not allocated to
a segment, and (d) corporate center costs for support services such as legal,
accounting and treasury functions.

Additionally,
Celanese recognized special charges in 2002, 2001 and 2000 primarily related to
restructuring costs and environmental and other costs associated with previously divested
entities of Hoechst, and demerger costs. (See Note 26)

Other
operating entities consist of ancillary businesses as well as companies which
provide infrastructure and procurement services. Effective July 1, 2000,
Celanese Advanced Materials, Inc., formerly known as advanced fiber materials
(AFM), which comprises the performance polymer (polybenzimidazole or
PBI) and the Vectran® polymer fiber product lines, was
transferred from the Acetate Products segment to Other Activities to reflect the
strategic alignment of PBI with the fuel cell project of Celanese Ventures GmbH.
Celanese Advanced Materials, Inc. had sales to external customers of 24
million in 2000, of which 11 million was included in Other Activities.

F-55

---



# CELANESE AG AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

## 27.
Business and Geographical Segments  (continued)

The
following table presents financial information based on the geographic location
of Celaneses facilities:

|                                   | NorthAmerica |  | ThereofUSA |   | ThereofCanada |  | ThereofMexico |   | Europe |  | ThereofGermany |   | Asia |  | Rest ofWorld |   | Consolidated
|---------------------------------- | ------------ |  | ---------- | - | ------------- |  | ------------- | - | ------ |  | -------------- | - | ---- |  | ------------ | - | ------------
|
|2002:                              |              |  |            |   |               |  |               |   |        |  |                |   |      |  |              |   |             
|Total assets                       |              |  | 4,003      |   |               |  | 3,192         |   |        |  | 237            |   |      |  | 574          |   |             
|Property, plant and equipment, net |              |  | 1,056      |   |               |  | 893           |   |        |  | 45             |   |      |  | 118          |   |             
|Operating profit (loss)            |              |  | (22        | ) |               |  | (100          | ) |        |  | 40             |   |      |  | 38           |   |             
|Net sales                          |              |  | 2,230      |   |               |  | 1,777         |   |        |  | 186            |   |      |  | 267          |   |             
|Depreciation and amortization      |              |  | 203        |   |               |  | 170           |   |        |  | 8              |   |      |  | 25           |   |             
|Capital expenditures               |              |  | 115        |   |               |  | 99            |   |        |  | 7              |   |      |  | 9            |   |             
|                                  
|2001:                              |              |  |            |   |               |  |               |   |        |  |                |   |      |  |              |   |             
|Total assets                       |              |  | 4,923      |   |               |  | 3,828         |   |        |  | 264            |   |      |  | 831          |   |             
|Property, plant and equipment, net |              |  | 1,372      |   |               |  | 1,141         |   |        |  | 55             |   |      |  | 176          |   |             
|Operating profit (loss)            |              |  | (635       | ) |               |  | (390          | ) |        |  | (40            | ) |      |  | (205         | ) |             
|Net sales                          |              |  | 2,594      |   |               |  | 2,060         |   |        |  | 240            |   |      |  | 294          |   |             
|Depreciation and amortization      |              |  | 305        |   |               |  | 226           |   |        |  | 21             |   |      |  | 58           |   |             
|Capital expenditures               |              |  | 155        |   |               |  | 137           |   |        |  | 4              |   |      |  | 14           |   |             
|                                  
|2000:                              |              |  |            |   |               |  |               |   |        |  |                |   |      |  |              |   |             
|Total assets                       |              |  | 5,223      |   |               |  | 3,863         |   |        |  | 316            |   |      |  | 1,044        |   |             
|Property, plant and equipment, net |              |  | 1,464      |   |               |  | 1,209         |   |        |  | 80             |   |      |  | 175          |   |             
|Operating profit (loss)            |              |  | 14         |   |               |  | 1             |   |        |  | 31             |   |      |  | (18          | ) |             
|Net sales                          |              |  | 2,842      |   |               |  | 2,315         |   |        |  | 219            |   |      |  | 308          |   |             
|Depreciation and amortization      |              |  | 282        |   |               |  | 198           |   |        |  | 23             |   |      |  | 61           |   |             
|Capital expenditures               |              |  | 114        |   |               |  | 77            |   |        |  | 4              |   |      |  | 33           |   |             

## 28.
Subsequent Events

As
discussed in Note 21, in 2002, shareholders approved the 2002 Celanese Stock
Option Plan. On January 31, 2003, Celanese granted an additional 86,800 stock
options under this plan, at an exercise price of 23.78 per share, to the
Board of Management and key employees.

F-56

---



# CELANESE
AG AND SUBSIDIARIES

# SCHEDULE II
 VALUATION AND QUALIFYING ACCOUNTS

# Allowances
for Doubtful Accounts (in  millions)

|Balance as of December 31, 2000 |  | 20 |  
|------------------------------- |  | -- | -
|Provisions, net of reversals    |  | 8  |  
|Recoveries                      |  | (3 | )
|Charge offs                     |  | (4 | )
|Translation Adjustments         |  | 1  |  
|                                |  |   
|Balance as of December 31, 2001 |  | 22 |  
|Provisions, net of reversals    |  | 6  |  
|Recoveries                      |  | (1 | )
|Charge offs                     |  | (3 | )
|Translation Adjustments         |  | (3 | )
|                                |  |   
|Balance as of December 31, 2002 |  | 21 |  
|                                |  |   

F-57