`AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 2005

================================================================================

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

                                   ----------

                                    FORM 20-F

                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004

                         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           NAME OF EACH EXCHANGE ON WHICH REGISTERED
 Ordinary Shares with no par value                       None

                                   ----------

 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.....................................49,881,618
                           (as of September 30, 2004)

     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]

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                                TABLE OF CONTENTS

                                     PART I

Item 1.   Identity of Directors, Senior Management and Advisers................2
Item 2.   Offer Statistics and Expected Timetable..............................2
Item 3.   Key Information......................................................2
   Selected Financial Data.....................................................2
   Exchange Rate Information...................................................4
   Risk Factors................................................................5
Item 4.   Information on the Company..........................................13
   Acquisition of Celanese....................................................13
   Introduction...............................................................20
   Business Summary...........................................................20
   Segment Overview...........................................................20
   Strategy...................................................................22
   Business Segments..........................................................23
   Other Activities...........................................................33
   Acquisitions and Divestitures..............................................34
   Raw Materials and Energy...................................................34
   Research and Development...................................................35
   Intellectual Property......................................................35
   Environmental and Other Regulation.........................................36
   Organizational Structure...................................................38
   Description of Property....................................................39
Item 5.   Operating and Financial Review and Prospects........................42
   Acquisition of Celanese....................................................42
   Basis of Presentation......................................................44
   Major Events In 2004.......................................................45
   Financial Highlights.......................................................47
   Overview - Nine Months Ended September 30, 2004 Compared with Nine Months
      Ended September 30, 2003................................................48
   Selected Data by Business Segment..........................................49
   Summary of Consolidated Results - Nine Months Ended September 30, 2004
      Compared with Nine Months Ended September 30, 2003......................55
   Summary by Business Segment - 2003 Compared with 2002......................59
   Summary of Consolidated Results - 2003 Compared with 2002..................63
   Liquidity and Capital Resources............................................67
   Critical Accounting Policies and Estimates.................................75
   Outlook....................................................................80
Item 6.   Directors, Senior Management and Employees..........................84
   Directors and Senior Management............................................84
   Compensation of Directors and Officers.....................................86
   Incentive Plans............................................................92
   Board Practices............................................................93
   Employees..................................................................95
   Share Ownership............................................................96
Item 7.   Major Shareholders and Related Party Transactions...................96
   Major Shareholders.........................................................96
   Related Party Transactions.................................................96
Item 8.   Financial Information...............................................97
   Export Sales...............................................................97
   Legal Proceedings..........................................................97
   Dividend Policy...........................................................100
   Significant Changes.......................................................100
Item 9.   The Offer and Listing..............................................101
   Nature of Trading Market..................................................101
Item 10.  Additional Information.............................................104
   Articles of Association...................................................104


                                        i



   Material Contracts........................................................108
   Exchange Controls and Other Limitations Affecting Security Holders........108
   Taxation..................................................................108
   Documents on Display......................................................111
Item 11.  Quantitative and Qualitative Disclosures About Market Risk.........112
   Interest-Rate Risk Management.............................................112
   Foreign-Exchange Risk Management..........................................112
   Commodity Risk Management.................................................113
   Stock Based Compensation Risk Management..................................113
Item 12.  Description of Securities Other Than Equity Securities.............114
Item 13.  Defaults, Dividend Arrearages and Delinquencies....................114
Item 14.  Material Modifications to the Rights of Security Holders and
   Use of Proceeds...........................................................114
Item 15.  Controls and Procedures............................................114
Item 16.  Reserved...........................................................115
Item 16A. Audit Committee Financial Expert...................................115
Item 16B. Code of Ethics and Governance Matters..............................115
Item 16C. Principal Accountant Fees and Services.............................116
   Pre-Approval Policies and Procedures of the Finance and Audit
   Committee.................................................................117
Item 17.  Financial Statements...............................................117
Item 18.  Financial Statements...............................................118
Item 19.  Exhibits...........................................................118
Index to Consolidated Financial Statements...................................F-2

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                                       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 majority owned subsidiaries over which
Celanese exercises control, as well as a special purpose entity, which is a
variable interest entity where Celanese is deemed the primary beneficiary.

     During April 2004, BCP Crystal Acquisition GmbH & Co. KG (renamed Celanese
Europe Holding GmbH & Co. KG), then a German limited partnership
(Kommanditgesellschaft) controlled by a group of investment funds advised by The
Blackstone Group, completed a voluntary public offer and acquired, at a price of
(euro)32.50 per share, a total of 41,588,227 of the ordinary shares of Celanese
AG, representing approximately 84 percent of the Celanese ordinary shares
outstanding on that date, excluding treasury shares (the "Tender Offer").
Celanese Europe Holding GmbH & Co. KG is an indirect wholly-owned subsidiary of
Celanese Corporation, a Delaware corporation whose shares have been listed on
the New York Stock Exchange since January 2005 and are traded under the symbol
CE. Affiliates of The Blackstone Group own a majority of the shares of Celanese
Corporation. As a dominating company, Celanese Europe Holding GmbH & Co. KG is
required, at the request of each minority shareholder, to acquire minority
shares in exchange for "fair cash compensation." Accordingly, pursuant to the
requirements of German law, Celanese Europe Holding GmbH & Co. KG commenced a
tender offer on September 2, 2004 for minority shares, which offer will continue
until two months after the day on which the decision on the last motion in the
award proceedings (Spruchverfahren) and any related appeals, as described in
Item 8. Financial Information - Legal Proceedings, which has been disposed of
has been published. These award proceedings were dismissed in March 2005,
however, the dismissal is still subject to appeal. For a more complete
discussion of the tender offer, see - Item 4. Information on the Company -
Acquisition of Celanese - Domination and Profit and Loss Transfer Agreement.

     Celanese Europe Holding GmbH & Co. KG is, except for accounting purposes,
referred to in this annual report as "Celanese Europe Holding". For accounting
purposes, Celanese Europe Holding GmbH & Co. KG is referred to as "BCP" or
"Purchaser". See Note 3 to the Consolidated Financial Statements contained in
this annual report (the "Consolidated Financial Statements").

                                   ----------

                              BASIS OF PRESENTATION

     In July 2004, the majority of Celanese's shareholders approved changing the
Celanese fiscal accounting year to commence October 1st and end September 30th.
As a result, Celanese's 2004 fiscal year ended on September 30, 2004.
Accordingly, the results of operations and cash flows for the nine months ended
September 30, 2003 are presented on an unaudited basis. The results presented in
this document should not be taken as an indication of the results of operations
to be reported for any subsequent period or for the full fiscal year,
particularly following the transfer on October 5, 2004 of Celanese Americas
Corporation and CPO Celanese AG & Co. Procurement Olefin KG, Frankfurt am Main
to BCP Caylux Holdings Luxembourg S.C.A. and Celanese Europe Holding GmbH & Co.
KG, respectively.

     The Consolidated Financial Statements were prepared in accordance with
accounting principles generally accepted in the United States ("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,
adjusted for acquisitions and divestitures. The Consolidated Financial
Statements and other financial information included in this annual report,
unless otherwise specified, have been presented to separately show 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 four business segments,
Chemical Products, 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.


                                        1



                              CURRENCY TRANSLATION

     Celanese's Consolidated Financial Statements are prepared in euro. U.S.
dollar or U.S.$ amounts as of and for the nine months ended September 30, 2004
are unaudited, and have been converted solely for the convenience of the readers
for 2004 from euro into U.S. dollars, at an exchange rate of U.S.$1.2417 per
(euro)1.00, the noon buying rate in New York City for cable transfers in foreign
currencies announced by the Federal Reserve Bank of New York for customs
purposes (the "Noon Buying Rate") on September 30, 2004. 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 March 29, 2005, the Noon Buying Rate for the euro was U.S$1.2913 per
(euro)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."

                                     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 shown below as of September 30, 2004 and December
31, 2003, and the statement of operations data for the nine months ended
September 30, 2004 and for the years ended December 31, 2003 and 2002, 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 as of December 31, 2002, 2001 and 2000, and the statement of
operations data for the years ended December 31, 2001 and December 31, 2000 are
derived from audited Consolidated Financial Statements not included in this
annual report. The results of operations and cash flows for the nine months
ended September 30, 2003 are presented on an unaudited basis.


                                        2



                                                           NINE MONTHS ENDED SEPTEMBER 30,      YEAR ENDED DECEMBER 31,
                                                          ----------------------------------   ------------------------
                                                            2004     2004     2003     2003     2002     2001     2000
                                                          --------  ------   ------   ------   ------   ------   ------
                                                                                    (UNAUDITED)
                                                          -------------------------------------------------------------
                                                          U.S.$(1)                    (EURO)
                                                          --------  ---------------------------------------------------
                                                              (IN MILLIONS, EXCEPT FOR SHARE AND PER SHARE DATA,
                                                                     PERCENTAGES AND NUMBER OF EMPLOYEES)
                                                          -------------------------------------------------------------

STATEMENT OF OPERATIONS DATA:
Net sales .............................................     3,789    3,051    3,103    4,075    4,064    4,433    4,461
Cost of sales .........................................    (3,077)  (2,478)  (2,592)  (3,435)  (3,359)  (3,806)  (3,684)
Selling, general and administrative expenses ..........      (410)    (330)    (345)    (451)    (474)    (547)    (539)
Research and development expenses .....................       (70)     (56)     (59)     (79)     (69)     (82)     (81)
Special charges(2) ....................................      (176)    (142)       7       (5)       5     (464)     (19)
Operating profit (loss) ...............................        57       46      115      107      183     (464)     144
Interest and other income, net(3) .....................        70       57       64       69        7       (7)      54
Income tax  benefit (provision) .......................      (237)    (191)     (55)     (48)     (59)     123     (107)
Minority interests ....................................        --       --       --       --       --       --       --
Earnings (loss) from continuing operations ............      (110)     (88)     124      129      131     (348)      91
Earnings (loss) from discontinued operations ..........        22       18       (7)       4       25      (59)       1
Cumulative effect of changes in accounting
   principles, net of income tax ......................        --       --       (1)      (1)      19       --       --
Net earnings (loss) ...................................       (88)     (70)     116      132      175     (407)      92
Earnings (loss) per common share - basic(4) ...........     (1.78)   (1.42)    2.34     2.67     3.48    (8.08)    1.73
Earnings (loss) per common share - diluted(4) .........     (1.78)   (1.42)    2.34     2.67     3.48    (8.08)    1.73

BALANCE SHEET DATA:
Debt ..................................................       729      587       --      504      615      880    1,165
Dividends paid per share ..............................      0.15     0.12       --     0.44       --     0.40     0.11
Common stock ..........................................       174      140       --      140      140      143      143
Weighted average shares - basic (in thousands) ........    49,402   49,402   49,488   49,446   50,329   50,332   53,293
Weighted average shares - diluted (in thousands) ......    49,402   49,402   49,488   49,457   50,329   50,332   53,293
OTHER DATA:
Operating margin (%) ..................................       1.5%     1.5%     3.7%     2.6%     4.5%   -10.5%     3.2%
Depreciation and amortization .........................       226      182      192      260      262      364      333
Capital expenditures ..................................       153      123      120      185      214      213      200
Number of employees on a continuing
   basis (end of period) in thousands .................       9.1      9.1     10.0      9.5     10.5     10.6     11.4


(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.$1.2417 per (euro)
     1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

(2)  Special charges include impairment charges, provisions for restructuring,
     which include costs associated with employee termination benefits and,
     plant and office closures, and other expenses and income incurred outside
     the normal course of ongoing operations. See Note 27 to the Consolidated
     Financial Statements.

(3)  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.

(4)  Earnings (loss) per common share - basic and diluted, is calculated by
     dividing net earnings (loss) by the weighted average diluted shares
     outstanding. At December 31, 2000, Celanese did not have any dilutive
     common stock equivalents.


                                        3



EXCHANGE RATE INFORMATION

     As noted in "Currency Translation" above, Celanese uses the euro as its
reporting currency and will make the guaranteed fixed annual payment (Ausgleich)
to minority shareholders pursuant to the Domination and Profit and Loss Transfer
Agreement between Celanese AG and Celanese Europe Holding (the "Domination
Agreement") in euro. Furthermore, prices quoted for Celanese shares on the
Frankfurt Stock Exchange are quoted in euro.

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

     o    The U.S.$ equivalent for the guaranteed fixed annual payment
          (Ausgleich) pursuant to the Domination Agreement received by U.S.
          holders of Celanese shares;

     o    The U.S.$ equivalent for the fair cash compensation (Abfindung)
          pursuant to the Domination Agreement received by U.S. holders
          tendering Celanese shares; and

     o    The trading market price of Celanese shares on the Frankfurt Stock
          Exchange.

     For more information on the Domination Agreement see Item 4. Information on
the Company - Acquisition of Celanese. The table below shows the Noon Buying
Rates for the euro in U.S.$. 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
----                                   ------   ------   -------   -------
2000................................   0.8270   1.0335    0.9231    0.9388
2001................................   0.8437   0.9535    0.8952    0.8901
2002................................   0.8594   1.0485    0.9454    1.0485
2003................................   1.0361   1.2597    1.1411    1.2597
2004
   April ...........................   1.1802   1.2358    1.1989    1.1975
   May..............................   1.1801   1.2274    1.2000    1.2217
   June.............................   1.2006   1.2320    1.2146    1.2179
   July.............................   1.2032   1.2437    1.2266    1.2032
   August...........................   1.2025   1.2368    1.2191    1.2183
   September........................   1.2052   1.2417    1.2224    1.2417
   October..........................   1.2271   1.2783    1.2507    1.2746
   November.........................   1.2703   1.3288    1.2997    1.3259
   December.........................   1.3224   1.3625    1.3407    1.3538
2005
   January..........................   1.2954   1.3476    1.3123    1.3049
   February.........................   1.2773   1.3274    1.3011    1.3274
   March (through March 29).........   1.2877   1.3465    1.3207    1.2913

     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", "Item 11. Quantitative and
Qualitative Disclosures About Market Risk." and "Item 9. The Offer and Listing -
Nature of the Trading Market."


                                        4



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.
During the period covered by this annual report, Celanese had major facilities
located in North America, Europe and Asia, including facilities in Germany,
China and Korea 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.

     Conditions such as the uncertainties associated with war, terrorist
activities, epidemics, pandemics, 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 Europe, Asia,
the United States 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 products, such as formaldehyde, acetic acid and vinyl
acetate monomer, 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:

     o    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.

     o    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.

     o    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.

     o    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 that can outstrip current growth in
          demand.

     o    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 Chemical Products segment, is
currently characterized by overcapacity, and that there may be further capacity
additions in the next few years.


                                       5



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 experience 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 Chemical Products segment, principally methanol, formaldehyde, acetic acid,
vinyl acetate monomer, as well as oxo products. Celanese uses a portion of its
output of these chemicals, in turn, as inputs in the production of further
products in all its segments. Celanese also purchases significant amounts of
natural gas, electricity and fuel oil to supply the energy required in its
production processes.

     Prices of natural gas, oil and other hydrocarbons have increased
dramatically in 2004. To the extent this trend continues and Celanese is unable
to pass through these price increases to its customers, Celanese's operating
profit and results of operations may be less favorable than expected.

     Celanese is exposed to any volatility in the prices of our raw materials
and energy. Although Celanese has agreements providing for the supply of natural
gas, ethylene, propylene, electricity 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:

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

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

     o    The general level of business and economic activity; and

     o    The direct or indirect effect of governmental regulation.

     Celanese strives 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. 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 long-term supply agreements,
multi-year purchasing and sales agreements, and until the Recent Restructuring,
as defined in Item 4. Information on the Company - Acquisition of Celanese,
derivative instruments and forward purchase contracts for commodity price
hedging in North America. Celanese's policy, for the majority of its natural gas
and butane requirements, allows entering into supply agreements and forward
purchase or cash-settled swap contracts. During the nine months ended September
30, 2004, Celanese did not enter into any forward contracts for its butane
requirements and, for natural gas, had positions covering about 35 percent of
its then existing North American Chemical Products segment requirements,
primarily as a result of forward contracts entered into in 2003. 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.

     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 and acetaldehyde. Celanese may not be able to obtain sufficient raw
materials as a result of unforeseen developments that would cause an
interruption in supply. Even if Celanese has multiple sources of supply for a
raw material, these sources would not make up for the loss of a major supplier.
Nor can there be any


                                       6



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. Likewise, Celanese has
undertaken and is continuing to undertake initiatives in all segments to improve
productivity and performance and to generate cost savings. These initiatives may
not be completed or beneficial or the estimated cost savings from such
activities may not be realized.

Frankfurt airport expansion could require Celanese to reduce production capacity
of, limit expansion potential of, or incur relocation costs for its Kelsterbach
plant, which would lead to significant additional costs.

     The Frankfurt airport's expansion plans include the construction of an
additional runway. One of the three sites under consideration, the northwest
option, would be located in close proximity to Celanese`s Kelsterbach production
plant. The construction of this particular runway could have a negative effect
on the plant's current production capacity and future development. While the
government of the state of Hesse and the owner of the Frankfurt airport promote
the expansion of the northwest option, it is uncertain whether this option is in
accordance with applicable laws. Although the government of the state of Hesse
expects the plan approval for the airport expansion in 2007 and the start of
operations in 2009-2010, neither the final outcome of this matter nor its timing
can be predicted at this time.

Environmental regulations and other obligations relating to environmental
matters could subject Celanese to liability for fines, clean-ups and other
damages, require it to incur significant costs to modify its operations and
increase its manufacturing and delivery costs.

     Costs related to Celanese's compliance with environmental laws concerning,
and potential obligations with respect to, 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, for
environmental matters arising out of a number of divestitures that took place
prior to the demerger. Celanese's accruals for environmental remediation
obligations, (euro) 119 million as of September 30, 2004, may be insufficient if
the assumptions underlying those accruals prove incorrect or if Celanese is held
responsible for currently undiscovered contamination. See "Celanese may be
required to make payments to Hoechst" below, Item 4. Information on the Company
- Environmental and Other Regulation, and Item 5. Operating and Financial Review
and Prospects - Liquidity and Capital Resources.

     Celanese's operations are subject to extensive international, national,
state, local, and other supranational laws and regulations that govern
environmental and health and safety matters. Celanese incurs substantial capital
and other costs to comply with these requirements. If they are violated,
Celanese can be held liable for substantial fines and other sanctions, including
limitations on its operations as a result of changes to or revocations of
environmental permits involved. Stricter environmental, safety and health laws,
regulations and enforcement policies could result in substantial costs and
liabilities to Celanese or limitations on Celanese's operations 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 Celanese's business and operating
results may be less favorable than expected. For example, recent European Union
regulations require a trading system for carbon dioxide emissions to have been
in place by January 1, 2005. Accordingly, an emission trading system came into
effect in Germany at the start of 2005. This regulation will directly affect
Celanese's power plants at the Kelsterbach and Oberhausen sites, as well as
power plants operated by other InfraServ entities. Celanese, along with the
InfraServ entities, may be required to purchase carbon dioxide credits, which
could result in increased operating costs, or may be required to develop
additional cost-effective methods to reduce carbon dioxide emissions further,
which could result in increased capital expenditures. Celanese has not yet
determined the impact of this legislation on future capitial spending. The new
regulation indirectly affects Celanese's other Operations in the European Union,
which may experience higher energy costs from third party providers. Celanese
has not yet determined the impact of this legislation on its operating costs.
See "Item


                                       7



4. Information on the Company - Environmental and Other Regulation", and Notes
25 and 26 to the Consolidated Financial Statements.

     Celanese is also involved in several claims, lawsuits and administrative
proceedings relating to environmental matters. An adverse outcome in any of them
may negatively affect Celanese's earnings and cash flows 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.

     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 vinyl acetate monomer or VAM, which
Celanese 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 mid-2005. 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. If labeling is required, then
it should depend on relatively high parts per million of residual VAM in these
end products. It is not possible for Celanese to predict the outcome or effect
of any final ruling.

     Several recent studies have investigated possible links between
formaldehyde exposure and various end points including leukemia. The
International Agency for Research on Cancer, or IARC, recently reclassified
formaldehyde from Group 2A (probable human carcinogen) to Group 1 (known human
carcinogen) based on studies linking formaldehyde exposure to nasopharyngeal
cancer, a rare cancer in humans. IARC also concluded that there is insufficient
evidence for a causal association between leukemia and occupational exposure to
formaldehyde, although it also characterized evidence for such an association as
strong. The results of IARC's review will be examined by government agencies
with responsibility for setting worker and environmental exposure standards and
labeling requirements. Celanese is a producer of formaldehyde and plastics
derived from formaldehyde. Celanese is participating together with other
producers and users in the evaluations of these findings. Celanese cannot
predict the final effect of IARC's reclassification.

     Other recent initiatives will potentially require toxicological testing and
risk assessments of a wide variety of chemicals, including chemicals used or
produced by Celanese. These initiatives include various European Commission
programs, such as the European Environment and Health Strategy, commonly known
as SCALE, as well as the Proposal for the Registration, Evaluation and
Authorization and Restriction of Chemicals or REACH. REACH, which the European
Commission proposed in October 2003, will establish a system to register and
evaluate chemicals manufactured or imported to the European Union. Depending on
the final ruling, additional testing, documentation and risk assessments will
occur for the chemical industry. This will affect European producers of
chemicals as well as all chemical companies worldwide that export to member
states of the European Union. The final ruling has not yet been decided.

     The above-mentioned assessments may result in heightened concerns about the
chemicals involved, and in additional requirements being placed on the
production, handling, labeling or use of the subject chemicals. Such concerns
and 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 lead to a decrease in demand for these products.

Celanese's production facilities handle the processing of some volatile and
hazardous materials that subject Celanese to operating risks that could have a
negative effect on 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:

     o    Pipeline and storage tank leaks and ruptures;


                                       8



     o    Explosions and fires; and

     o    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 disrupt production and have a negative effect on the
productivity and profitability of a particular manufacturing facility and
Celanese's operating results and cash flows.

     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 26 to
the Consolidated Financial Statements.

Fluctuations in exchange and interest rates may affect Celanese's profitability.

     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 such countries, especially the U.S.
dollar, may materially affect Celanese's operating results. For example, changes
in currency exchange rates may affect:

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

     o    The cost of items required in Celanese's operations.

     Celanese uses financial instruments to hedge its exposure to foreign
currency fluctuations. More than 90 percent of outstanding foreign currency
contracts are used to hedge the foreign currency denominated intercompany net
receivables. The net notional amounts under such foreign currency contracts
outstanding at September 30, 2004 were (euro)766 million. The hedging activity
of foreign currency denominated intercompany net receivables resulted in a cash
inflow of approximately (euro)12 million for the nine months ended September 30,
2004. These positive effects may not be indicative of future effects.

     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.

     Prior to the Recent Restructuring, a substantial portion of Celanese's net
sales was denominated in currencies other than the euro. Following the Recent
Restructuring, the translation effects of changes in the value of other
currencies against the euro have not been eliminated, but will be reduced
substantially for Celanese. In its consolidated financial statements, Celanese
translates its local currency financial results into euros based on average
exchange rates prevailing during a reporting period or the exchange rate at the
end of that period. During times of a weakening U.S. dollar, at a constant level
of business, reported international sales, earnings, assets and liabilities will
be reduced because the local currency will translate into fewer euros. We
estimate that the translation effects of changes in the value of other
currencies against the euro increased net sales by approximately 6 percent for
the nine months ended September 30, 2004, 13 percent for the year ended December
31, 2003 and increased net sales by approximately 3 percent in 2002. We estimate
that the translation effects of changes in the value of other currencies against
the euro had increased total assets by approximately 1 percent for the nine
months ended September 30, 2004 and decreased total assets by approximately 13
percent in 2003.

     Celanese also incurs a currency transaction risk whenever one of its
operating subsidiaries enters into either a purchase or a sales transaction
using a different currency from the currency in which revenues are received.
Given


                                       9



the volatility of exchange rates, Celanese may not be able to manage its
currency transaction and/or translation risks effectively, or volatility in
currency exchange rates may expose its financial condition or results of
operations to a significant additional risk. Since a significant portion of its
indebtedness is and will be denominated in U.S. dollars, a strengthening of the
U.S. dollar could make it more difficult for Celanese to repay its indebtedness.

Celanese may be required to make payments to Hoechst.

     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 has an obligation to indemnify
Hoechst against liabilities for environmental damages or contamination arising
under certain divestiture agreements entered into by Hoechst prior to the
demerger. 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:

     o    Celanese will indemnify Hoechst for the total amount of these
          liabilities up to(euro) 250 million;

     o    Hoechst will bear the full amount of those liabilities
          between (euro) 250 million and (euro)750 million; and

     o    Celanese will indemnify Hoechst for one third of those liabilities for
          amounts exceeding (euro) 750 million.

     Celanese has made payments through September 30, 2004 of (euro) 38 million
for environmental contamination liabilities in connection with the divestiture
agreements, and may be required to make additional payments in the future. As of
September 30, 2004, Celanese had reserves of approximately (euro) 38 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 the nine months ended
September 30, 2004 or in the year ended December 31, 2003 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, insofar 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 25 to the Consolidated Financial Statements, and Celanese
has agreed to bear the remaining 20 percent.

As a dominated company, Celanese may be affected by risks arising out of the
debt levels of Celanese Corporation and several of its subsidiaries.

     Celanese Corporation and several of its subsidiaries are highly leveraged.
Since Celanese is a consolidated subsidiary of Celanese Corporation, Celanese
Corporation's substantial debt could have an effect on Celanese, including:

     o    Increasing Celanese's vulnerability to general economic and industry
          conditions;

     o    Limiting Celanese's ability to obtain additional financing for working
          capital, capital expenditures, product development, debt service
          requirements, acquisitions and general corporate or other purposes;
          and

     o    Limiting Celanese's ability to adjust to changing market conditions
          and placing Celanese at a competitive disadvantage compared to its
          competitors who have less debt.


                                       10



Celanese's future success will depend in part on its ability to protect its
intellectual property rights, and its inability to enforce these rights could
reduce its ability to maintain its market position and its margins.

     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. Celanese's continued growth strategy may bring it to regions of the
world where intellectual property protection may be limited and difficult to
enforce.

     As patents expire, the products and processes described and claimed in
those patents become generally available for use by the public. Celanese's
European and U.S. primary production patents for making Sunett, an important
product in Celanese's Performance Products segment, expired at the end of the
first quarter of 2005, which will reduce its ability to realize revenues from
making Sunett due to increased competition and potential limitations and will
result in Celanese's results of operations and cash flows relating to the
product being less favorable than today.

     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. If Celanese is not
successful in protecting its trademark rights, its revenues, results of
operations and cash flows may be adversely affected.

Under the Domination Agreement Celanese's majority shareholder may require it to
take actions that are disadvantageous to it.

     Celanese has entered into a domination and profit and loss transfer
agreement (Beherrschungs- und Gewinnabfuhrungsvertrag) with its majority
shareholder, Celanese Europe Holding. Pursuant to this agreement, Celanese
Europe Holding may instruct Celanese's board of management to take actions that
are disadvantageous to Celanese if such instruction is in the interest of
Celanese Europe Holding or its affiliated companies. In addition, pursuant to
the Domination Agreement, Celanese is obligated to transfer its entire profits
to Celanese Europe Holding, while the Domination Agreement requires Celanese
Europe Holding to compensate Celanese for any annual statutory loss incurred.
Furthermore, the net amount of the guaranteed fixed annual payment (Ausgleich)
guaranteed by Celanese Europe Holding vis-a-vis the minority shareholders of
Celanese in lieu of any future dividend, which, at the time of the entering into
of the Domination Agreement, amounted to (euro) 2.89 per share for a full fiscal
year, may, depending on applicable corporate tax rates, in the future be higher,
lower or the same as (euro) 2.89. As a dominated company, Celanese may be
affected by risks that affect Celanese Europe Holding and its affiliates,
including but not limited to risks arising out of the debt levels of some of
these entities. The Domination Agreement cannot be terminated by Celanese Europe
Holding in the ordinary course of business until September 30, 2009.

     Irrespective of whether a domination agreement is in place between Celanese
Europe Holding and Celanese, under German law Celanese is effectively controlled
by Celanese Europe Holding because of its 84 percent ownership of all
outstanding Celanese ordinary shares. Celanese Europe Holding has the ability,
through a variety of means, to utilize its controlling rights to, among other
things, (1) use its ability, through its 84 percent voting power at any
shareholders' meetings of Celanese, to elect the shareholder representatives on
the supervisory board and to thereby effectively control the appointment and
removal of the members of the Celanese board of management; and (2) effect all
decisions that a majority shareholder is permitted to make under German law.

     For more information on the Domination Agreement, see Item 4. Information
on the Company--Acquisition of Celanese.

     Actions taken by Celanese AG's majority shareholder may eliminate a liquid
market for Celanese shares.

     Celanese Europe Holding currently owns approximately 84 percent of Celanese
AG's shares. If Celanese Europe Holding acquires shares representing 95 percent
or more of Celanese's registered ordinary share capital (excluding treasury
shares), it intends to require, as permitted under German law, the transfer of
the Celanese ordinary shares owned by the then-outstanding minority shareholders
of Celanese in exchange for fair cash compensation (the "Squeeze-out"). As
alternatives to the Squeeze-out, Celanese Europe Holding might also consider


                                       11



instructing Celanese to apply to revoke the admission of its shares from the
Frankfurt Stock Exchange, or converting Celanese AG from its current legal form
of a stock corporation (Aktiengesellschaft, AG) into either a limited
partnership (Kommanditgesellschaft, KG) or a limited liability company
(Gesellschaft mit beschrankter Haftung, GmbH) in accordance with the provisions
of the German Transformation Act (Umwandlungsgesetz, UmwG). Such a conversion
would trigger an automatic delisting from the Frankfurt Stock Exchange. An
application to revoke the admission of Celanese AG's shares from the Frankfurt
Stock Exchange would be subject to approval by the affirmative vote of a
majority of the share capital of Celanese AG, while the conversion to a limited
partnership or limited liability company would require at least a 75 percent
majority. If Celanese AG's shares are delisted from the Frankfurt Stock
Exchange, minority shareholders would cease to have a liquid market in which to
trade their shares. However, if Celanese Europe Holding completely delists the
Celanese's shares from the Frankfurt Stock Exchange, effects a squeeze-out or
converts Celanese AG into a limited partnership or a limited liability company,
Celanese Europe Holding and/or Celanese AG must in each case offer Celanese AG's
remaining minority shareholders fair cash compensation in exchange for their
shares or, in the case of a conversion, in exchange for their equity interest in
the entity that results from the conversion. The amount of the fair cash
compensation per share may be equal to, higher or lower than the Tender Offer
price or the fair cash compensation offered pursuant to the Domination
Agreement. (See Item 4. Information on the Company - Acquisition of Celanese).

Celanese's internal controls over financial reporting may not be effective and
its independent auditors may not be able to certify as to their effectiveness,
which could have a significant and adverse effect on Celanese's business and
reputation.

     Celanese is evaluating its internal controls over financial reporting in
order to allow management to report on, and its independent auditors to attest
to, internal controls over financial reporting, as required by Section 404 of
the Sarbanes-Oxley Act of 2002 and rules and regulations of the Securities and
Exchange Commission, or the Commission, thereunder, which is referred to as
Section 404. Celanese is currently performing the system and process evaluation
and testing required (and any necessary remediation) in an effort to comply with
management certification and auditor attestation requirements of Section 404.
The management certification and auditor attestation requirements of Section 404
will initially apply to Celanese as of September 30, 2006. In the course of
Celanese's ongoing Section 404 evaluation, areas of internal controls that may
need improvement have been identified, and plans are in place to design enhanced
processes and controls to address these and any other issues that might be
identified through this review. Currently, none of the identified areas that
need improvement have been categorized as significant deficiencies or material
weaknesses, individually or in the aggregate. However, as the evaluation process
is still ongoing, conditions that may result in significant deficiencies or
material weaknesses in the future may still be identified. In 2004, certain
members of Celanese's accounting staff identified two significant deficiencies,
and, in 2005, Celanese's external auditor discovered a material weakness in
addition to, and separate from, our Section 404 evaluation process, and those
deficiencies and the material weakness are discussed in detail in the
immediately subsequent risk factor.

     Celanese cannot be certain as to the timing of completion of its
evaluation, testing and any remediation actions or the impact of the same on its
operations. If the requirements of Section 404 cannot be implemented in a timely
manner or with adequate compliance, Celanese's independent auditors may not be
able to certify as to the effectiveness of its internal control over financial
reporting and it may be subject to sanctions or investigation by regulatory
authorities, such as the Commission. As a result, there could be a negative
reaction in the financial markets due to a loss of confidence in the reliability
of Celanese's financial statements. In addition, Celanese may be required to
incur costs in improving its internal control system and the hiring of
additional personnel. Any such action could negatively affect Celanese's
results.

     Celanese expects to incur expenses of an aggregate of approximately (euro)
2.5 million to (euro) 4 million in the fiscal year 2005 in connection with its
compliance with Section 404.

     Celanese has, in the past, identified significant deficiencies and material
weaknesses in its internal controls, and the identification of any significant
deficiencies or material weaknesses in the future could affect its ability to
ensure timely and reliable financial reports.

     In addition to, and separate from, Celanese's evaluation of internal
controls under Section 404 of the Sarbanes-Oxley Act of 2002 and any areas
requiring improvement identified as part of that process, Celanese previously
identified two significant deficiencies and a material weakness in its internal
controls of Celanese Corporation, our parent company. The Public Company
Accounting Oversight Board ("PCAOB") defines a significant deficiency as a
control deficiency, or a combination of control deficiencies, that adversely
affects the company's ability to initiate,


                                       12



authorize, record, process or report external financial data reliably in
accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the company's annual or interim
financial statements that is more than inconsequential will not be prevented or
detected. The PCAOB defines a material weakness as a single deficiency, or a
combination of deficiencies, that results in more than a remote likelihood that
a material misstatement of the annual or interim financial statements will not
be prevented or detected.

     Celanese is in the process of implementing changes to strengthen its
internal controls. In addition, while actions have been taken to address these
deficiencies and weakness, additional measures may be necessary and these
measures, along with other measures expected to be taken to improve our internal
controls, may not be sufficient to address the issues identified by us or ensure
that the internal controls are effective. For a description of these
deficiencies and weakness, see Item 15 - "Controls and Procedures." If
deficiencies in internal controls cannot be corrected in a timely manner,
Celanese's ability to record, process, summarize and report financial
information within the time periods specified in the rules and forms of the
Commission will be adversely affected. This failure could materially and
adversely impact Celanese's business, its financial condition and the market
value of its securities.

Celanese expects to record significant charges in the three months ended
December 31, 2004.

     Celanese expects to incur certain significant charges in the three months
ended December 31, 2004, as more fully described under Note 30 to the
Consolidated Financial Statements, including (all figures are based on
preliminary estimates):

     o    A (euro) 25 million loss related to asset impairment charges resulting
          from the disposition of the cyclo-olefin copolymer business included
          within the Technical Polymers Ticona segment;

     o    A (euro) 9 million charge to equity in net earnings of affiliates,
          representing Celanese AG's portion of restructuring charges recorded
          by European Oxo GmbH, Celanese's oxo chemicals joint venture; and

     o    An expense of (euro) 10 million related to a stock incentive plan for
          executive officers, key employees and directors, a deferred
          compensation plan for executive officers and key employees, as well as
          other management incentive programs approved by Celanese Corporation
          in December 2004.

     The foregoing is not intended to be a complete list of the charges and
other items that could have an effect on results of operations for the three
months ended December 31, 2004.

ITEM 4. INFORMATION ON THE COMPANY

ACQUISITION OF CELANESE

     During April 2004, Celanese Europe Holding GmbH & Co. KG (or Celanese
Europe Holding), a German limited partnership (Kommanditgesellschaft) controlled
by a group of investment funds advised by The Blackstone Group, completed a
voluntary public offer and acquired, at a price of (euro)32.50 per share, a
total of 41,588,227 of the ordinary shares of Celanese, representing
approximately 84 percent of the Celanese ordinary shares outstanding on that
date, excluding treasury shares (the "Tender Offer").

     In addition, as a part of the Tender Offer, Celanese Europe Holding agreed
to refinance certain existing debt of Celanese, pre-fund certain pension
obligations of Celanese, pre-fund certain contingencies and certain obligations
linked to the value of Celanese ordinary shares, and payment obligations related
to outstanding stock appreciation rights, stock options and interest payments,
provide additional funds for working capital and other general corporate
purposes, and pay related fees and expenses.

     For more information on the acquisition of Celanese, see Note 2 to the
Consolidated Financial Statements.

Post-Tender Offer Events

     After the completion of the Tender Offer, the following events occurred:


                                       13



     Delisting. Celanese's ordinary shares were delisted from the New York Stock
Exchange, or NYSE, on June 2, 2004. Celanese may also apply to revoke the
admission of its ordinary shares to the Frankfurt Stock Exchange, which would
require, among other things, a resolution at the shareholders' meeting of
Celanese with the majority of the votes cast in favor of such resolution. If the
shares were to be delisted from both the NYSE and from the Frankfurt Stock
Exchange, Celanese Europe Holding or Celanese would have to offer the then
outstanding minority shareholders fair cash compensation in exchange for their
shares as described below.

     Domination and Profit and Loss Transfer Agreement. On June 22, 2004,
Celanese Europe Holding entered into a domination and profit and loss transfer
agreement (Beherrschungs- und Gewinnabfuhrungsvertrag) or, Domination Agreement,
with Celanese, pursuant to which Celanese agreed to submit itself to the
direction of, and to transfer its entire profits to, Celanese Europe Holding,
and Celanese Europe Holding agreed to compensate Celanese for any annual losses
(Jahresfehlbetrag) incurred while the Domination Agreement is in effect. The
Domination Agreement was approved by shareholders at an extraordinary general
meeting held on July 30-31, 2004. The Domination Agreement was registered in the
commercial register on August 2, 2004 and became operative on October 1, 2004.
The Domination Agreement is subject to legal challenges instituted by dissenting
shareholders. Minority shareholders have filed nine actions against Celanese in
the Frankfurt District Court (Landgericht), seeking, among other things, to set
aside the shareholder resolutions passed at the July 30 - 31, 2004 extraordinary
general meeting based, among other things, on the alleged violation of
procedural requirements and information rights of the shareholders, to declare
the Domination Agreement and the change in the fiscal year void and to prohibit
Celanese from performing its obligations under the Domination Agreement. In
addition, a German court could revoke the registration of the Domination
Agreement in the commercial register. On August 2, 2004, two minority
shareholders instituted public register proceedings with the Konigstein Local
Court (Amtsgericht) and the Frankfurt District Court, both with a view to have
the registration of the Domination Agreement in the Commercial Register deleted
(Amtsloschungsverfahren). See "Item 8. Financial Information - Legal
Proceedings." The Domination Agreement cannot be terminated by Celanese Europe
Holding in the ordinary course of business until September 30, 2009.

     Under the Domination Agreement, the board of management may be compelled to
take actions that are disadvantageous to Celanese if the board of management is
instructed to do so by Celanese Europe Holding, and provided that such
instructions are in the interest of Celanese Europe Holding or its affiliates.
The board of management may only refuse to comply with any such instruction, if,
at the time such instruction is given, (i) it is, in the opinion of the board of
management of Celanese, obviously not in the interests of Celanese Europe
Holding or its affiliates, (ii) in the event of a disadvantageous instruction,
the negative consequences to Celanese are disproportionate to the benefits to
Celanese Europe Holding or its affiliates, (iii) compliance with the instruction
would violate legal or statutory restrictions, (iv) compliance with the
instruction would endanger the existence of Celanese; or (v) it is doubtful
whether Celanese Europe Holding will be able to fully compensate Celanese, as
required by the Domination Agreement, for its annual loss (Jahresfehlbetrag)
incurred during the fiscal year in which such instruction is given. The
supervisory board is not bound by instructions issued by Celanese Europe Holding
under the Domination Agreement. If Celanese Europe Holding instructs the board
of management to take an action that requires the supervisory board's approval
and such approval is not given, the board of management nevertheless has to
comply with such instruction if Celanese Europe Holding repeats it.

     Pursuant to the Domination Agreement, the entire annual statutory profits
of Celanese, if any, less any loss carried forward from the previous fiscal
year, less any amount to be allocated to the statutory capital reserve
(gesetzliche Ruecklage) and less any amount to be allocated to other profit
reserves (andere Gewinnrucklagen) upon approval by Celanese Europe Holding, will
be transferred to Celanese Europe Holding. If, however, during any fiscal year
while the Domination Agreement is in effect, Celanese incurs an annual loss
(Jahresfehlbetrag), on a non-consolidated basis, Celanese Europe Holding would
have to pay to Celanese an amount equal to such loss to the extent that the
respective annual loss is not fully compensated for by dissolving other profit
reserves (andere Gewinnruecklagen) accrued at Celanese since the date on which
the Domination Agreement became operative (Verlustausgleichspflicht). Such
payment obligation would accrue at the end of any fiscal year of Celanese in
which an annual loss was incurred, and such accrual would be independent from
the adoption of the financial statements. The payment obligation would have to
be fulfilled by a cash payment to Celanese by Celanese Europe Holding. Celanese
Europe Holding may be able to reduce or avoid cash payments to Celanese by
offsetting against such loss compensation claims by Celanese any counterclaims
of value against Celanese that Celanese Europe Holding may have. Unless Celanese
Europe Holding is able to obtain funds from a source other than annual profits
of Celanese, it may not be able to satisfy its obligation to fund such
shortfall. BCP Caylux


                                       14



Holdings Luxembourg S.C.A., or BCP Caylux, and BCP Crystal US Holdings Corp., or
BCP Crystal, both of which are indirect wholly-owned subsidiaries of Celanese
Corporation, have each agreed to provide Celanese Europe Holding with financing
to further strengthen its ability to be in a position at all times to fulfill
all of its obligations when they become due under, or in connection with, the
Domination Agreement and to ensure that it will perform all of its obligations
under, or in connection with, the Domination Agreement when such obligations
become due, including, without limitation, the obligations to pay a guaranteed
fixed annual payment to the outstanding minority shareholders of Celanese, to
offer to acquire all outstanding Celanese ordinary shares from the minority
shareholders in return for payment of fair cash consideration and to compensate
Celanese for any annual loss it incurs while the Domination Agreement is in
effect.

     As a consequence of entering into the Domination Agreement, Section 305(1)
of the German Stock Corporation Act (Aktiengesetz) requires that, upon the
Domination Agreement becoming operative, Celanese Europe Holding must at the
request of each remaining minority shareholder of Celanese, acquire such
shareholder's registered ordinary shares of Celanese in exchange for payment of
"fair cash compensation" (angemessene Barabfindung). As required under Section
305(3) sentence 3 of the German Stock Corporation Act, Celanese Europe Holding
will pay to all minority shareholders who tender into such offer and whose
shares are paid for after the day following the date the Domination Agreement
becomes operative, interest on the offer price from such day until the day
preceding the date of settlement at a rate of 2 percent per annum plus the base
rate (as defined in Section 247 of the German Civil Code (BGB)) per annum
prevailing from time to time, as reduced by any guaranteed dividend payments.
The mandatory offer required pursuant to Section 305(1) of the German Stock
Corporation Act is not a voluntary public takeover offer or any other offer
under the German Securities Acquisition and Takeover Act (Wertpapiererwerbs-und
Ubernahmegesetz) or a takeover or tender offer under any other applicable German
law. However, it may be considered a tender offer under applicable laws of the
United States of America. Therefore, in order to comply with applicable U.S.
securities laws, Celanese Europe Holding commenced an offer on September 2,
2004, which will continue as long as Celanese AG remains a defendant in the
minority shareholder award proceedings (Spruchverfahren) as described in "Item
8. Financial Information - Legal Proceedings", in which case the offer will
remain open for two months following final resolution of the award proceedings
by the German courts. The terms of this offer are set forth in the offer
document, dated September 2, 2004, which was filed with the Commission under
cover of Schedule TO on the same day. As of March 29, 2005, pursuant to this
offer Celanese Europe Holding had acquired an additional 642,608 shares. On
March 29, 2005, the closing price of the Celanese ordinary shares on the
Frankfurt Stock Exchange was (euro)46.10 per share. In addition, if Celanese
delists its shares from the Frankfurt Stock Exchange, Celanese Europe Holding
effects a squeeze-out or Celanese is converted into a limited partnership or a
limited liability company, as described below, Celanese Europe Holding and/or
Celanese must in each case make another offer to the then remaining minority
shareholders of Celanese of fair cash compensation in exchange for their shares
or, in the case of a conversion, in exchange for their equity interest in the
entity that results from the conversion. The (euro) 41.92 per share fair cash
compensation, plus interest, required to be offered to minority shareholders in
connection with the Domination Agreement is greater than the Tender Offer price.
The amount of fair cash compensation per share to be offered upon the occurrence
of such event may be equal to, higher or lower than, the Tender Offer price or
the fair cash compensation of (euro) 41.92, plus interest, offered as described
below under "Determination of the Amount to be Paid to the Minority
Shareholders".

     Any minority shareholder who elects not to sell shares to Celanese Europe
Holding will be entitled to remain a shareholder of Celanese and to receive a
gross guaranteed fixed annual payment on such shares (Ausgleich) of (euro) 3.27
per Celanese ordinary share less certain corporate taxes in lieu of any future
dividend. Taking into account the circumstances and the tax rates at the time of
entering into the Domination Agreement, the net guaranteed fixed annual payment
is (euro) 2.89 per share for a full fiscal year. The net guaranteed fixed annual
payment may, depending on applicable corporate tax rates, in the future be
higher, lower or the same as (euro) 2.89 in lieu of any future dividends,
determined as described below under - "Determination of the Amount to be Paid to
Minority Shareholders."

     Irrespective of whether a domination agreement is in place between Celanese
Europe Holding and Celanese, under German law Celanese is effectively controlled
by Celanese Europe Holding because of its 84 percent ownership of all
outstanding Celanese ordinary shares. Celanese Europe Holding has the ability,
through a variety of means, to utilize its controlling rights to, among other
things, (1) through its 84 percent voting power at any shareholders' meetings of
Celanese, to elect the shareholder representatives on the supervisory board and
to thereby effectively control the appointment and removal of the members of the
Celanese board of management; and (2) effect all decisions that a majority
shareholder is permitted to make under German law.


                                       15



     Change in Fiscal Year. At the extraordinary general meeting on July 30 -
31, 2004, Celanese shareholders also approved a change of Celanese's fiscal year
and a corresponding change of Celanese's articles of association in order to
take advantage of the consolidated tax filing status. Therefore, from September
30, 2004 onwards, Celanese's fiscal year begins on October 1 and ends on
September 30 of the following year. A short fiscal year ran from January 1, 2004
to September 30, 2004 and is covered by this annual report.

     Subsequent Purchases of Celanese Shares. Celanese Europe Holding may from
time to time purchase or be required to purchase any or all of the outstanding
Celanese ordinary shares not owned by it in market transactions or otherwise.
Examples of instances in which Celanese Europe Holding may be required to
purchase additional shares include the ongoing mandatory offer relating to the
Domination Agreement, or additional mandatory offers required by actions that
Celanese Europe Holding or its affiliates may take in the future, such as a
possible delisting of the shares from the Frankfurt Stock Exchange, a possible
squeeze-out of minority shareholders or a possible conversion of Celanese into a
different legal form. Celanese Europe Holding's decision to pursue subsequent
voluntary purchases will depend on, among other factors, the then-prevailing
market prices and any negotiated terms with minority shareholders. If Celanese
Europe Holding purchases any shares in an individually negotiated purchase not
over the stock exchange, and before the first anniversary of the publication of
the final results of the Tender Offer, for consideration higher than the Tender
Offer price, it will be required to make additional compensating payments to
sellers of Celanese ordinary shares in the Tender Offer.

     Squeeze-out and Conversion. If Celanese Europe Holding acquires shares
representing 95 percent or more of the registered ordinary share capital
(excluding treasury shares) of Celanese, Celanese Europe Holding intends to
require, as permitted under German law, the transfer to Celanese Europe Holding
of the shares owned by the then-outstanding minority shareholders of Celanese in
exchange for fair cash compensation (the "Squeeze-out") determined as described
below under - "Determination of the Amount to be Paid to Minority Shareholders."
As an alternative to the Squeeze-out, Celanese Europe Holding might also
consider converting Celanese from its current legal form of a stock corporation
(Aktiengesellschaft, AG) into either a limited partnership
(Kommanditgesellschaft, KG) or a limited liability company (Gesellschaft mit
beschrankter Haftung, GmbH) in accordance with the provisions of the German
Transformation Act (Umwandlungsgesetz, UmwG). Such a conversion would trigger an
automatic delisting from the Frankfurt Stock Exchange. An application to revoke
the admission of Celanese AG's shares from the Frankfurt Stock Exchange would be
subject to approval by the affirmative vote of a majority of the share capital
of Celanese AG, while the conversion to a limited partnership or limited
liability company would require at least a 75 percent majority. The conversion
would allow Celanese Europe Holding to take advantage of a more efficient
governance structure, as legal requirements applicable to GmbHs and KGs are in
many respects less onerous than those applicable to AGs. However, if Celanese
Europe Holding completely delists the Celanese ordinary shares from the
Frankfurt Stock Exchange, effects a squeeze-out or converts Celanese into a
limited partnership or a limited liability company, Celanese Europe Holding
and/or Celanese must in each case offer the then remaining minority shareholders
of Celanese fair cash compensation, as described below, in exchange for their
shares or, in the case of a conversion, in exchange for their equity interest in
the entity that results from the conversion. The amount of the fair cash
compensation per share may be equal to, higher or lower than the Tender Offer
price or the fair cash compensation offered pursuant to the Domination
Agreement.

     Determination of the Amount to be Paid to the Minority Shareholders. The
amount to be paid to the minority shareholders as fair cash compensation in
exchange for their shares in connection with the Domination Agreement becoming
operative, the delisting from the Frankfurt Stock Exchange, or a Squeeze-out or,
in the case of a conversion, in exchange for their equity interest in the entity
resulting from such conversion, has been (in the case of the amount payable in
connection with the Domination Agreement) or will be (in each other case)
determined on the basis of the fair value of the enterprise of Celanese,
determined by Celanese and/or Celanese Europe Holding in accordance with
applicable German legal requirements, as of the date of the applicable
resolution of Celanese's shareholders' meeting, and, except in the case of a
delisting from the Frankfurt Stock Exchange, examined by one or more duly
qualified auditors chosen and appointed by the Frankfurt district court
(Landgericht). The amount of the guaranteed fixed annual payment in connection
with the Domination Agreement becoming effective to minority shareholders who
elect not to sell their shares to Celanese Europe Holding but to remain a
shareholder of Celanese was determined by Celanese Europe Holding and Celanese
in accordance with applicable German law, on the basis of the hypothetical
projected earnings of Celanese assuming a full distribution of profits. The
gross guaranteed fixed annual payment of (euro) 3.27 per share may be equal to,
higher or lower than the actual otherwise distributable profits per share of
Celanese. The (euro) 41.92 per share fair cash compensation, plus interest,
offered to minority shareholders in connection with the Domination Agreement is
greater than the Tender Offer price. The amount of cash compensation per share
to be offered to minority shareholders in connection with any delisting from the
Frankfurt


                                       16



Stock Exchange, Squeeze-out or conversion, as applicable, may be equal to,
higher or lower than, the Tender Offer price or the fair cash compensation of
(euro) 41.92 per share, plus interest, offered pursuant to the Domination
Agreement. Furthermore, each of the guaranteed fixed annual payment and the fair
cash compensation is subject to review by the court in award proceedings
(Spruchverfahren) which have been instituted by several dissenting shareholders.
The court dismissed these award proceedings in March 2005, however, the
dismissal is still subject to appeal. If as a result of such award proceedings,
the court increases the amount of the guaranteed fixed annual payment and/or the
fair cash consideration, or if such increase is agreed between the parties in a
court settlement, payments already made to minority shareholders pursuant to the
offer required by the Domination Agreement would have to be increased
accordingly with retroactive effect.

     Any delisting from the Frankfurt Stock Exchange, Squeeze-out or conversion
would require approval by the shareholders of Celanese. While it is to be
expected that in each case, Celanese Europe Holding will have the requisite
majority in such meeting to assure approval of such measures, minority
shareholders, irrespective of the size of their shareholding, may, within one
month from the date of any such shareholder resolution, file an action with the
court to have such resolution set aside. While such action would only be
successful if the resolution were passed in violation of applicable laws and
cannot be based on the unfairness of the amount to be paid to the minority
shareholders, a shareholder action may substantially delay the implementation of
the challenged shareholder resolution pending final resolution of the action. If
such action proved to be successful, the action could prevent the implementation
of a delisting, squeeze-out or conversion. Accordingly, there can be no
assurance that any of the steps described above can be implemented timely or at
all.

The Recent Restructuring

     In October 2004, Celanese Europe Holding completed an organizational
restructuring (the "Recent Restructuring"). As a part of the Recent
Restructuring, Celanese Europe Holding instructed Celanese AG to transfer all of
the shares of Celanese Americas Corporation or CAC from Celanese Holding GmbH, a
wholly owned subsidiary of Celanese, ultimately to BCP Caylux. Consequently,
substantially all of Celanese's North American assets, including significant
portions of its Chemical Products and Technical Products Ticona segments, as
well as its entire Acetate Products segment, including that segment's European
and Asian assets, were transferred out of Celanese AG. In addition, CPO Celanese
Aktiengesellschaft & Co. Procurement Olefin KG, Frankfurt am Main ("CPO"), a
wholly-owned subsidiary of Celanese AG, which acts as a purchasing entity on
behalf of Celanese as well as for third parties, was transferred to Celanese
Holding Europe. Thereafter, BCP Caylux transferred certain assets, including its
equity ownership interest in CAC, to BCP Crystal;

     As a result of these transactions, BCP Crystal holds 100 percent of CAC's
equity and, indirectly, all equity owned by CAC in its subsidiaries. In
addition, BCP Crystal holds, indirectly, all of the Celanese ordinary shares
held by Celanese Europe Holding. Management is still in the process of
determining the potential impact of these transfers on Celanese. Celanese now
serves primarily as the holding company for the European business and certain
Asian businesses.


                                       17



     Corporate Structure

     The charts below summarize our ownership structure immediately before
completion of the Recent Restructuring and our current ownership structure.

     PRE-RESTRUCTURING STRUCTURE

                                  [FLOW CHART]


                                       18



CURRENT STRUCTURE

                                  [FLOW CHART]


                                       19



INTRODUCTION

     Celanese AG was incorporated as Diogenes Erste Vermogensverwaltungs 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 Stra(beta)e 111, 61476 Kronberg/Taunus, Germany, telephone +49 69
305 16000.

BUSINESS SUMMARY

     Celanese is an integrated 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, 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. Prior to the Recent Restructuring, the Celanese
portfolio consisted of four main business segments: Chemical Products, Acetate
Products, Technical Polymers Ticona and Performance Products. The entire Acetate
Products segment, along with significant portions of the Chemical Products and
Technical Polymers Ticona segments were transferred out of Celanese on October
5, 2004 as part of the Recent Restructuring. See Item 4. Information on the
Company - Acquisition of Celanese.

     For the nine months ended September 30, 2004, Celanese had net sales of
(euro) 3,051 million and an operating profit of (euro) 46 million from
continuing operations. At September 30, 2004, Celanese had approximately 9,050
employees worldwide. As of the Recent Restructuring, Celanese had approximately
3,500 employees worldwide on a continuing basis. As of September 30, 2004,
Celanese had 24 production plants and five research centers in ten countries,
including significant joint ventures. As of the Recent Restructuring, Celanese
has nine production plants and three research centers in Europe and Asia,
including significant joint ventures. In the nine months ended September 30,
2004 months of 2004, 47 percent of net sales were derived from sales in North
America, 41 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 the nine months ended September 30, 2004, sales to the
10 largest customers of Celanese accounted for less than 20 percent of its net
sales and the single largest customer represented less than 5 percent of its net
sales.

     Celanese's aggregate capital expenditures for property, plant and equipment
were (euro) 123 million, (euro) 185 million, and (euro) 214 million for the nine
months ended September 30, 2004 and for the years ended December 31, 2003 and
2002, respectively. North America and Europe accounted for 64 percent and 30
percent, respectively, of Celanese's capital expenditures in the nine months
ended September 30, 2004. 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 - Nine Months Ended September 30, 2004 Compared
to Nine Months Ended September 30, 2003 - Discontinued Operations", and Note 7
to the Consolidated Financial Statements.

     As of September 30, 2004, Celanese had 49,881,618 shares outstanding and
approximately 13,500 shareholders. Its ordinary shares are traded on the
Frankfurt Stock Exchange under the symbol CZZ.

SEGMENT OVERVIEW

     As of September 30, 2004, Celanese operated through four principal business
segments: Chemical Products, Technical Polymers Ticona, Acetate Products, and
Performance Products. The Acetate Products segment was transferred out of
Celanese on October 5, 2004 as part of the Recent Restructuring.

     Chemical Products. This segment produces and supplies acetyl products,
including acetic acid, acetate esters, vinyl acetate monomer, polyvinyl alcohol,
and emulsions. These products are generally used as building blocks for
value-added products or in intermediate chemicals used in the paints, coatings,
and inks. Celanese, together with its affiliates, is a leading global producer
of acetic acid.

     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 and


                                       20



industrial applications, often replacing metal or glass. The primary products
within the Ticona segment are Hostaform polyacetal, or POM, offerings, and GUR,
an ultra-high molecular weight polyethylene. Hostaform is used in a broad range
of products including automotive components, electronics and appliances. GUR is
used in battery separators, conveyor belts, filtration equipment, coatings and
medical devices.

     Acetate Products. This segment primarily produced and supplied acetate tow,
which is used in the production of filter products, and acetate filament, which
is used in the apparel and home furnishing industries. The Acetate Products
segment was transferred out of Celanese as part of the Recent Restructuring on
October 5, 2004.

     Performance Products. This segment operates under the trade name of
Nutrinova and produces and sells Sunett(R) high intensity sweetener and food
protection ingredients, such as sorbates, for the food, beverage and
pharmaceuticals industries.

     The table below illustrates each segment's share of total segment net sales
to external customers for the nine months ended September 30, 2004 and for the
years ended December 31, 2003 and 2002.

                   NET SALES TO EXTERNAL CUSTOMERS BY SEGMENT



                                   NINE MONTHS
                                 ENDED SEPTEMBER              YEAR ENDED DECEMBER 31,
                               -------------------   -----------------------------------------
                                       2004                 2003                 2002
                               -------------------   -------------------   -------------------
                                           % OF                  % OF                  % OF
                               (EURO)   SEGMENT(1)   (EURO)   SEGMENT(1)   (EURO)   SEGMENT(1)
                               ------   ----------   ------   ----------   ------   ----------
                                              (IN MILLIONS, EXCEPT PERCENTAGES)
                               ---------------------------------------------------------------

Chemical Products...........    1,942       64%       2,628       65%       2,482       62%
Acetate Products............      425       14%         578       14%         670       17%
Technical Polymers Ticona...      539       18%         675       17%         696       17%
Performance Products........      111        4%         150        4%         161        4%


(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, Celanese Advanced Materials, Inc., its
approximately 41 percent interest in Pemeas GmbH or Pemeas, companies that
provide infrastructure services, and other ancillary businesses. Pemeas is a
venture with a consortium of investors led by Conduit Ventures, a London based
venture capital company, to develop high temperature membrane assemblies or MEAs
for fuel cells. Celanese contributed its MEA activity to Pemeas in April 2004
and in December 2004 approved a plan to sell its interest. Celanese Advanced
Materials, Inc. manufactures and distributes high performance fibers and
polymers globally and was transferred out of Celanese AG in the Recent
Restructuring.


                                       21



STRATEGY

     As a dominated company, Celanese will implement the strategy of Celanese
Corporation by focusing on operating cash flows, profitability, return on
investment and shareholder value. It is believed that these goals can be
achieved through the following business strategies:

     o    Maintain Cost Advantage and Productivity Leadership. Celanese
          continually seeks to reduce its production and raw material costs. Its
          advanced process control projects (APC) generate savings in energy and
          raw materials while increasing yields in production units. Energy and
          raw materials savings resulting from APC projects were approximately
          (euro) 9 million in 2003 and (euro) 11 million in the nine months
          ended September 30, 2004. Most significantly, Celanese intends to
          intensify the implementation of Six Sigma, which has become a
          pervasive and important tool in both operations and administration for
          achieving greater productivity and growth. Celanese is also engaged in
          several projects and process technology improvements focused on energy
          reduction. For example, the Oberhausen site reduced the energy
          consumption 2004 by 22.4 percent mainly as result of changing the raw
          material basis for synthesis gas. Celanese intends to continue using
          best practices to reduce costs and increase equipment reliability in
          maintenance and project engineering.

     o    Focused Business Investment. Celanese intends to continue investing
          strategically in growth areas, including new production capacity, to
          extend its global market leadership position. Historically, Celanese's
          strong market position has enabled it to initiate capacity growth to
          take advantage of projected demand growth. For example, Celanese
          building a 600,000 metric ton per year world-scale acetic acid plant
          in China, the world's fastest growing market for acetic acid and its
          derivatives. Celanese also increased the capacity of its GUR
          ultra-high molecular weight polyethylene plant in Germany by 10,000
          tons per year in the third calendar quarter of 2004. Celanese expects
          to continue to benefit from its investments and capacity expansion
          that enables it to meet increases in global demand.

     o    Maximize Cash Flow and Reduce Debt. Despite a difficult operating
          environment over the past several years, Celanese has generated a
          significant amount of operating cash flow. Celanese believes there are
          opportunities to further improve its operating cash flow through
          increasing productivity, receiving cash dividends from its joint
          ventures and pursuing additional cost reduction efforts. Celanese
          believes in a focused capital expenditure plan that is dedicated to
          attractive investment projects.

     o    Deliver Value-Added Solutions. Celanese continually develops new
          products and industry leading production technologies that solve its
          customers' problems. For example, Ticona has worked closely with fuel
          system suppliers to develop an acetal copolymer with the chemical and
          impact resistance necessary to withstand exposure to hot diesel fuels.
          Celanese's emulsions business pioneered a technological solution that
          leads the industry in product offerings for ecologically friendly
          emulsions for solvent-free interior paints. Celanese believes that its
          customers value its expertise, and it will continue to work with them
          to enhance the quality of their products.

     o    Enhance Value of Portfolio. Celanese will continue to further optimize
          its business portfolio through divestitures, acquisitions and
          strategic investments that enable it to focus on businesses in which
          it can achieve market, cost and technology leadership over the long
          term. In addition, Celanese intends to continue to expand its product
          mix into higher value-added products. For example, Celanese has begun
          construction of a 600,000 metric ton acetic acid plant in China, the
          world's fastest growing market for acetic acid. The plant is expected
          to come on stream in late 2006 or early 2007. Celanese also divested
          non-core businesses, such as acrylates, which was sold to Dow in
          February 2004, and nylon 6/6, which was sold to BASF in December 2003.


                                       22



BUSINESS SEGMENTS

Chemical Products

     The Chemical Products segment consists of six business lines: Acetyls,
Acetyl Derivatives and Polyols, Polyvinyl Alcohol, Emulsions, Specialties, and
other chemical activities. All business lines in this segment mainly conduct
business using the "CELANESE" trade name, except Polyvinyl Alcohol, which uses
the trademark Celvol(R), and Emulsions, which uses the trademarks Mowilith(R)
and Celvolit(R). The following table lists key products and their major end use
markets.

--------------------------------------------------------------------------------
KEY CHEMICAL PRODUCTS
--------------------------------------------------------------------------------
Acetic Acid
--------------------------------------------------------------------------------
Acetic Anhydride
--------------------------------------------------------------------------------
Vinyl Acetate Monomer
--------------------------------------------------------------------------------
Acetate Esters
--------------------------------------------------------------------------------
Oxo Alcohols
--------------------------------------------------------------------------------
Polyvinyl Alcohol
--------------------------------------------------------------------------------
Emulsions
--------------------------------------------------------------------------------
Emulsion Powders
--------------------------------------------------------------------------------
Carboxylic Acids
--------------------------------------------------------------------------------
Amines
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
MAJOR END USE MARKETS
--------------------------------------------------------------------------------
Vinyl Acetate Monomer, Acetic Anhydride and Purified Terephthalic Acid or PTA,
an intermediate used in the production of polyester resins, films and fibers
--------------------------------------------------------------------------------
Cellulose Acetate and Pharmaceuticals
--------------------------------------------------------------------------------
Paints, Adhesives, Paper Coatings, Films and Textiles
--------------------------------------------------------------------------------
Coatings, Inks
--------------------------------------------------------------------------------
Plasticizers, Acrylates, Esters, Solvents and Inks
--------------------------------------------------------------------------------
Adhesives, Building Products, Paper Coatings, Films and Textiles
--------------------------------------------------------------------------------
Water-Based Quality Surface Coatings, Adhesives, Non-Woven Textiles
--------------------------------------------------------------------------------
Building Products
--------------------------------------------------------------------------------
Lubricants, Detergents and Specialties
--------------------------------------------------------------------------------
Agricultural Products and Water Treatments
--------------------------------------------------------------------------------

     Business Lines

     Acetyls. During the periods presented, the acetyls business line produced:

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

          o    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 sale to third parties.

          o    Methanol, principally used internally in the production of acetic
               acid and formaldehyde. The balance is sold to the merchant
               market.

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

          o    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.

     Methanol, which Celanese produced only in North America, was transferred
out of Celanese as part of the Recent Restructuring. The manufacturing
operations for acetic anhydride were also transferred out of Celanese as part of
the Recent Restructuring, but Celanese still purchases this product from its
U.S. affiliates and resells it in Europe and Asia.

     Celanese, together with its subsidiaries and affiliates, is a leading
global producer of acetic acid and the world's leading producer of vinyl acetate
monomer according to the Tecnon Orbichem's Acetic Acid and Vinyl Acetate
1999-2009 World Survey.


                                       23



     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 one
supplier. All these raw materials, except carbon monoxide, are themselves
commodities and are available from a wide variety of sources.

     Celanese's production of acetyl products employs leading proprietary and
licensed technologies, including Celanese's proprietary AO Plus(TM)
acid-optimization technology for the production of acetic acid and VAntage(TM)
vinyl acetate monomer technology. AO Plus enables plant capacity to be increased
with minimal investment, while 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 chemicals,
which in turn are used in the manufacture of paints, coatings, adhesives and
other products.

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

          o    Ethyl acetate, an acetate ester that is a solvent used in
               coatings, inks and adhesives and in the manufacture of
               photographic films and coated papers;

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

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

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

          o    Butyric acid, an intermediate for the production of esters used
               in artificial flavors;

          o    Propionic acid, an organic acid used to protect and preserve
               grain; and

          o    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:

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

          o    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.

     Oxo alcohols and intermediates are produced from propylene and ethylene and
include:

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

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

          o    Synthesis gas, used as an intermediate in the production of oxo
               alcohols and specialties.

     Formaldehyde and oxo alcohols, which Celanese produced only in North
America, were transferred out of Celanese on October 5, 2004 as part of the
Recent Restructuring. In Europe, Celanese participates in European Oxo


                                       24



GmbH, its non-consolidated European oxo chemicals joint venture with Degussa AG.
European Oxo GmbH began operations in October 2003.

     Acetyl derivatives and polyols are commodity products characterized by
cyclicality in pricing. The principal raw materials used in the acetyl
derivatives business line are acetic acid, various alcohols, methanol,
acetaldehyde, propylene, ethylene and synthesis gas. Celanese manufactures many
of these raw materials for its own use as well as for sales to third parties,
including its competitors in the acetyl derivatives business. Celanese purchases
propylene and ethylene from a variety of sources. Celanese manufactures
acetaldehyde for its European production. 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. Although the
manufacturing operations for polyvinyl alcohol, which are in the United States,
were transferred out of Celanese as part of the Recent Restructuring, Celanese
purchases these products from its U.S. affiliates and resells them in Europe and
Asia. According to Stanford Research International's December 2003 report on
PVOH, Celanese Corporation is the largest North American producer of polyvinyl
alcohol and the third largest producer in the world.

     Emulsions. Celanese purchased the emulsions business of Clariant AG on
December 31, 2002. The products in this business are sold under the Mowilith(R)
and Celvolit(R) brands and include conventional emulsions, high-pressure vinyl
acetate ethylene emulsions, and powders. Emulsions 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, based
on sales the business held a number two position in emulsions (excluding SBRs)
in Europe and a number one position in European VAM-based emulsions in 2001.

     Specialties. The specialties business line produces:

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

          o    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

          o    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 venture with Hatco Corporation, a
leading producer of synthetic lubricants, for the production and marketing of
neopolyol esters or NPEs. This venture, in which Celanese holds a 51 percent
interest, built and operates a 7,000 metric ton per year NPE plant at Celanese's
Oberhausen, Germany site. The plant came 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 supplies Estech with carboxylic acids and polyols,
the main raw materials for producing NPEs.

     Facilities

     The Chemical Products segment has production sites in Singapore, Spain,
Sweden, Slovenia and Germany. The emulsions business line also has tolling
arrangements in the United Kingdom, France and Greece. Until the Recent


                                       25



Restructuring, Celanese also had production sites in the United States, Canada
and Mexico and participated in a joint venture in Saudi Arabia that 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, such as China. As a result, Celanese shut down its formaldehyde
unit in Edmonton, Alberta, Canada in 2004. Celanese has commenced building a
600,000 metric ton acetic acid plant in Nanjing, China, which is expected to
come on stream in late 2006 or early 2007.

     Capital Expenditures

     The Chemical Products segment's capital expenditures were (euro) 43
million, (euro) 96 million and (euro) 106 million for the nine months ended
September 30, 2004 and the years ended December 31, 2003 and 2002, respectively.
The capital expenditures incurred during the last three years related primarily
to efficiency and safety improvement-related items associated with the normal
operations of the business, as well as spending for a new plant for synthesis
gas, an important raw material for the production of oxo alcohols and
specialties, at Celanese's Oberhausen site. The new plant, which supplies
European Oxo GmbH and Celanese, came on stream in the third quarter of 2003 and
has improved reliability and reduced production costs. Capital expenditures in
2003 also included the integration of a company-wide SAP system.

     Markets

     The following table illustrates net sales by destination of the Chemical
Products segment by geographic region for the nine months ending September 30,
2004 and the years ended December 31, 2003 and 2002.

       NET SALES TO EXTERNAL CUSTOMERS BY DESTINATION - CHEMICAL PRODUCTS

                    NINE MONTHS ENDED
                      SEPTEMBER 30,           YEAR ENDED DECEMBER 31,
                    -----------------   -----------------------------------
                           2004                2003               2002
                    -----------------   ----------------   ----------------
                                % OF               % OF               % OF
                     (EURO)   SEGMENT   (EURO)   SEGMENT   (EURO)   SEGMENT
                     ------   -------   ------   -------   ------   -------
                               (IN MILLIONS, EXCEPT PERCENTAGES)
                    -------------------------------------------------------
North America....      737      38%      1,046     39%      1,100     44%
Europe/Africa....      770      40%      1,047     40%        865     35%
Asia/Australia...      366      19%        462     18%        442     18%
Rest of World....       69       3%         73      3%         75      3%

     The Chemical 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 acetyls business line, the methanol market is global and highly
dependent on the demand for products made from methanol. Prior to the Recent
Restructuring, Celanese's production was used to satisfy its own demands for
methanol and was 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 entered 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.

     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.


                                       26



     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.

     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. Prior to the Recent
Restructuring, Celanese also provided acetyl derivatives to its Acetate Products
segment, as well as to other participants in the cellulose acetate industry.
Celanese manufactured formaldehyde for its own use as well as for sale to a few
regional customers that include manufacturers in the wood products and chemical
derivatives industries. The sale of formaldehyde was based on both long and
short term agreements. Polyols are sold globally to a wide variety of customers,
primarily in the coatings and resins and the specialty products industries. Oxo
products are sold to a wide variety of customers, primarily in the construction
and automotive industries. The oxo market is 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

     Principal competitors of Celanese in the Chemical Products segment include
Air Products and Chemicals, Inc., Atofina S.A., BASF, Borden Chemical, Inc., BP
p.l.c. ("BP"), Chang Chun Petrochemical Co., Ltd., Daicel, 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., Rohm & Haas Company, Showa Denko K.K., and Kuraray
Co. Ltd.

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
--------------------------------------------------------------------------------
Hostaform(R) (Polyacetals)
--------------------------------------------------------------------------------
GUR(R)(Ultra High Molecular Weight Polyethylene or PE-UHMW)
--------------------------------------------------------------------------------
Celanex(R)/Vandar(R)/Riteflex(R)/Impet(R)(Polyester Engineering Resins)
--------------------------------------------------------------------------------
Vectra(R) (Liquid Crystal Polymers)
--------------------------------------------------------------------------------
Fortron(R)* (Polyphenylene Sulfide or PPS)
--------------------------------------------------------------------------------
Celstran(R), Compel(R)(long fiber reinforced thermoplastics)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
MAJOR MARKETS
--------------------------------------------------------------------------------
Automotive, Electronics, Consumer Products and Medical
--------------------------------------------------------------------------------
Profiles, Battery Separators, Industrial Specialties. Filtration, Coatings and
Medical
--------------------------------------------------------------------------------
Electrical, Electronics, Automotive, and Appliances
--------------------------------------------------------------------------------
Electronics, Telecommunications, Consumer and Medical
--------------------------------------------------------------------------------
Electronics, Automotive and Industrial
--------------------------------------------------------------------------------
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


                                       27



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 a business that enables innovations for its customers while
closely working together with them for a new development. 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 has worked
closely with fuel system suppliers to develop an acetal copolymer with the
chemical and impact resistance necessary to withstand exposure to hot diesel
fuels in the new generation of common rail diesel engines. The product can also
be used in automotive fuel sender units where it remains stable at the high
operating temperatures present in direct-injection diesel engines.

     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.

     Business Lines

     Polyacetals are sold under the trademark Hostaform(R) in all regions but
North America, where Celanese Corporation sells them under the trademark
Celcon(R). Polyplastics, in which Celanese Corporation holds a 45 percent
ownership interest, and Korea Engineering Plastics, in which Celanese holds a 50
percent ownership interest, 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
drug delivery systems and gears for appliances.

     The primary raw material for polyacetals is formaldehyde, which is
manufactured from methanol. During the periods presented, Ticona purchased
formaldehyde and methanol in the United States from Celanese's Chemical Products
segment and, in Europe, manufactures formaldehyde from purchased methanol.

     GUR(R), 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. GUR Micro powder grades are used for high
performance filters, membranes, diagnostic devices, coatings and additives for
thermoplastics & elastomers. PE-UHMW fibers are also used in protective
ballistic applications. The basic raw material for GUR is ethylene.

     Celstran(R) and Compel(R) are long fiber reinforced thermoplastics, which
impart extra strength and stiffness, making them more suitable for larger parts
than conventional thermoplastics. In December 2004, Celanese approved a plan to
dispose of the cyclo-olefin copolymer or COC business included within Ticona.

     Polyesters such as Celanex(R) polybutylene terephthalate, or PBT, and
Vandar(R), 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. Raw materials for polyesters vary. Base monomers, such
as dimethyl terephthalate or DMT and PTA, are widely available with pricing
dependent on broader polyester fiber and packaging resins market conditions.
Smaller volume specialty co-monomers for these products are typically supplied
by a few companies.

     Liquid crystal polymers, or LCPs, such as Vectra(R), are used in electrical
and electronics applications and for precision parts with thin walls and complex
shapes. Fortron(R), 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


                                       28



applications. Fortron is manufactured by Fortron Industries, Ticona's 50-50
joint venture with Kureha Chemicals Industry of Japan.

     The manufacturing operations for polyesters and LCPs, as well as Ticona's
interest in Fortron Industries, were transferred out of Celanese as part of the
Recent Restructuring. However, Ticona still purchases polyesters and LCPs from
its US affiliates and resells them to customers in Europe. Ticona also has
marketing arrangements with Fortron Industries for the sale of PPS in Europe,
whereby Ticona sells the product for the account of Fortron Industries.

     Facilities

     Ticona has polymerization, compounding and research and technology centers
in Germany, Brazil and, until the Recent Restructuring, in the United States.
Ticona's Kelsterbach, Germany production site is located in close proximity to
one of the sites being considered for a new runway under the Frankfurt airport's
expansion plans. The construction of this particular runway could have a
negative effect on the plant's current production capacity and future
development. While the state government of Hesse and the owner of the airport
promote the expansion of this option, it is uncertain whether this option is in
accordance with applicable laws. Although the government of the state of Hesse
expects the plan approval for the airport expansion in 2007 and the start of
operations in 2009-2010, neither the final outcome of this matter nor its timing
can be predicted at this time.

     Capital Expenditures

     Ticona's capital expenditures were (euro) 50 million, (euro) 49 million and
(euro) 66 million for the nine months ended September 30, 2004 and the years
ended December 31, 2003 and 2002, respectively. Ticona had expenditures in each
of these three years relating primarily to efficiency and safety
improvement-related items associated with the normal operations of the business.
In addition, Ticona had expenditures in 2002 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. In 2004, Ticona completed its
expansion of its Oberhausen GUR PE-UHMW capacity by 10,000 metric tons per year.
In the fourth quarter of 2002, Ticona increased capacity by 6,000 metric tons at
its polyacetals facility in Kelsterbach, Germany and commenced a further
increase of 17,000 metric tons, however its completion is dependent upon the
action of the Frankfurt airport expansion described above. The capital
expenditures for 2003 also included construction of a new administrative
building in Florence, Kentucky and integration of a company-wide SAP system.

     Markets

     The following table illustrates the destination of the net sales of the
Technical Polymers Ticona segment by geographic region for the nine months ended
September 30, 2004 and the years ending December 31, 2003 and 2002.

    NET SALES TO EXTERNAL CUSTOMERS BY DESTINATION - TECHNICAL POLYMER TICONA

                       NINE MONTHS
                          ENDED
                      SEPTEMBER 30,          YEAR ENDED DECEMBER 31,
                    ----------------   -----------------------------------
                          2004               2003               2002
                    ----------------   ----------------   ----------------
                               % OF               % OF               % OF
                    (EURO)   SEGMENT   (EURO)   SEGMENT   (EURO)   SEGMENT
                    ------   -------   ------   -------   ------   -------
                               (IN MILLIONS, EXCEPT PERCENTAGES)
                    ------------------------------------------------------
North America....     216      39%       310      45%      339       48%
Europe/Africa....     279      52%       330      49%      318       46%
Asia/Australia...      25       5%        17       3%       19        3%
Rest of World....      19       4%        18       3%       20        3%


                                       29



     Prior to the Recent Restructuring, Ticona's sales in the Asian market were
made mainly through its joint ventures, Polyplastics and Korea Engineering
Plastics which are accounted for under the equity method and therefore not
included in Ticona's consolidated net sales. If Ticona's portion of the sales
made by these joint ventures 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, Celanese Corporation, 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, Celanese Corporation
will indirectly own an approximate 38 percent interest in this joint venture, of
which Celanese will indirectly hold approximately 6 percent. Work on the new
facility commenced in July 2003, and the new plant is expected to start
operations in the second quarter of 2005. The Polyplastics and Fortron
Industries joint ventures were transferred out of Celanese in the Recent
Restructuring.

     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
for most of its major products, as well as a number of electronic channels, such
as its BuyTiconaDirect(TM) 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. A
significant swing in the economic conditions of the end markets of Ticona's
principal customers could significantly affect the demand for Ticona's products.

     Competition

     Ticona's principal competitors include BASF, DuPont, General Electric
Company and Solvay S.A. Smaller regional competitors include Asahi Kasei
Corporation, DSM NV, Mitsubishi Plastics, Inc., Chevron Phillips Chemical
Company, L.P., Braskem S.A., Teijin and Toray Industries Inc.

Acetate Products

     During the period covered by this annual report, the Acetate Products
segment, all of which was transferred out of Celanese as part of the Recent
Restructuring, consisted of two major business lines, acetate filter products
and acetate filament. Both of these business lines used the "Celanese" brand to
market their products. Shortly after the segment was transferred out of
Celanese, Celanese Corporation announced plans to implement a strategic
restructuring of its acetate business, which included discontinuing acetate
filament production by mid-2005. (See Acquisition of Celanese above).

     Business Lines

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

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

     The acetate filter products business line produced acetate tow, which is
used primarily in cigarette filters. The acetate tow market continues to be
characterized by stability and slow growth.

     Celanese had a 30 percent interest in three manufacturing joint ventures
with Chinese state-owned enterprises that produce cellulose acetate flake and
tow in China. Additionally, during the nine months ended September 30, 2004, 22
percent of Celanese's sales of acetate tow were sold to the state-owned tobacco
enterprises, the largest single market for acetate tow in the world. As demand
for acetate tow in China exceeds local supply, Celanese and its Chinese partners
agreed to expand capacity at their three manufacturing joint ventures.


                                       30



     During the periods presented, the Acetate Products segment continued its
cost reduction and operations improvement efforts. These efforts were directed
toward reducing costs while achieving higher productivity of employees and
equipment. In addition to restructuring activities undertaken in prior periods,
Celanese outsourced the operation and maintenance of its utility operations at
the Narrows, Virginia and Rock Hill, South Carolina plants in 2003. Celanese
also closed its Charlotte, North Carolina administrative and research and
development facility and relocated the functions there to the Rock Hill and
Narrows locations. The relocation was substantially completed by September 30,
2004.

     In October 2004, Celanese Corporation announced plans to implement a
strategic restructuring of its acetate business to increase the efficiency,
reduce overcapacity in certain manufacturing areas and to focus on products and
markets that provide long-term value. As part of this restructuring, Celanese
Corporation plans to discontinue acetate filament production by mid-2005 and to
consolidate its acetate flake and tow operations at three locations, instead of
the current five. The Recent Restructuring resulted in Celanese recording
(euro)100 million in restructuring charges related to asset impairment of
Celanese's acetate business for the nine months ended September 30, 2004. (See
Notes 12 and 17 to the Consolidated Financial Statements.)

     Facilities

     The Acetate Products segment had production sites in the United States,
Canada, Mexico and Belgium, and participates in three manufacturing joint
ventures in China. In October 2004, it announced plans to close the Rock Hill,
South Carolina, production site during 2005 and to shutdown production of
acetate products at the Edmonton, Alberta, Canada site by 2007. Additionally,
filament production at Narrows and Ocotlan is expected to be discontinued by
mid-2005 and flake production is expected to be recommissioned in 2005.

     Capital Expenditures

     The Acetate Products segment's capital expenditures were (euro) 27 million,
(euro) 34 million and (euro) 31 million for the nine months ended September 30,
2004 and the years ended December 31, 2003 and 2002, respectively. The capital
expenditures incurred during these years related primarily to efficiency,
environmental and safety improvement-related items associated with the normal
operations of the business. Capital expenditures in 2003 also included the
integration of a company-wide SAP system.

     Markets

     The following table illustrates the destination of the net sales of the
Acetate Products segment by geographic region for the nine months ended
September 30, 2004 and the years ending December 31, 2003 and 2002.

        NET SALES TO EXTERNAL CUSTOMERS BY DESTINATION - ACETATE PRODUCTS



                                 NINE MONTHS ENDED
                                   SEPTEMBER 30,           YEAR ENDED DECEMBER 31,
                                 -----------------   -----------------------------------
                                       2004                2003               2002
                                 -----------------   ----------------   ----------------
                                             % OF               % OF               % OF
                                  (EURO)   SEGMENT   (EURO)   SEGMENT   (EURO)   SEGMENT
                                  ------   -------   ------   -------   ------   -------
                                                 (IN MILLIONS, EXCEPT PERCENTAGES)
                                  ------------------------------------------------------

North America.................      116      27%       167      29%       199      30%
Europe/Africa.................      113      27%       169      29%       177      26%
Asia/Australia................      186      44%       228      40%       272      41%
Rest of World.................       10       2%        14       2%        22       3%


     Sales in the acetate filter products industry were 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, were 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


                                       31



tow prices in the industry as a whole. In the acetate filament industry,
Celanese's sales were made to textile companies that range in size from the
largest in the industry to others which are quite small.

     Competition

     Principal competitors in the Acetate Products segment included Acetate
Products Ltd. (Acordis), Daicel, Eastman, Mitsubishi Rayon Company, Limited,
Novaceta S.p.a., and Rhodia S.A. ("Rhodia").

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(R) (Acesulfame-K)   Beverages, Confections, Dairy Products and
                           Pharmaceuticals
------------------------   ------------------------------------------
Sorbates                   Dairy Products, Baked Goods, Beverages,
                           Animal Feeds, Spreads and Delicatessen
                           Products
------------------------   ------------------------------------------

     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 worldwide, as well as the resale of other food ingredients
mainly in Japan, Australia, Mexico and the United States.

     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 by Nutrinova, such as technical services provided. Nutrinova's strategy is
to be the most reliable and highest quality producer of this product, to develop
new applications for the product and to 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. primary production patents for making
Sunett expired at the end of the first quarter of 2005.

     Nutrinova's food protection ingredients are mainly 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 were (euro) 1
million, (euro) 2 million and (euro) 4 million for the nine months ended
September 30, 2004 and the years ended December 31, 2003 and 2002, respectively.
The capital expenditures incurred during these years related to efficiency,
debottlenecking, quality and safety improvement items associated with the normal
operation of the business.



                                       32




     Markets

     The following table illustrates the destination of the net sales of the
Performance Products segment by geographic region for the nine months ended
September 30, 2004 and the years ended December 31, 2003 and 2002.

      NET SALES TO EXTERNAL CUSTOMERS BY DESTINATION - PERFORMANCE PRODUCTS



                                 NINE MONTHS ENDED
                                    SEPTEMBER 30,          YEAR ENDED DECEMBER 31,
                                 -----------------   -----------------------------------
                                       2004                2003               2002
                                 -----------------   ----------------   ----------------
                                             % OF               % OF               % OF
                                  (EURO)   SEGMENT   (EURO)   SEGMENT   (EURO)   SEGMENT
                                  ------   -------   ------   -------   ------   -------
                                                 (IN MILLIONS, EXCEPT PERCENTAGES)
                                  ------------------------------------------------------

North America.................      45       41%       65       43%       60       37%
Europe/Africa.................      42       38%       52       35%       58       36%
Asia/Australia................      17       15%       25       17%       27       17%
Rest of World.................       7        6%        8        5%       16       10%


     Nutrinova directly markets Sunett(R) 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 its omega-3 fatty acid, docosahexanoeic acid, Nutrinova - DHA(TM). 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,
Yu Yao/Ningbo, Yancheng AmeriPac and other Chinese manufacturers of sorbates.

OTHER ACTIVITIES

     Other Activities included revenues mainly from captive insurance companies,
Celanese Advanced Materials, Inc., and Pemeas GmbH or Pemeas. Celanese Advanced
Materials, which was transferred out of Celanese in the Recent Restructuring,
manufactures and distributes high performance fibers and polymers globally.
Pemeas is a venture with a consortium of investors led by Conduit Ventures, a
London based venture capital company, to develop high temperature membrane
assemblies or MEAs for fuel cells. Celanese, which holds an approximate 41
percent interest in Pemeas, contributed its MEA activity to Pemeas in April
2004. In December 2004, Celanese approved a plan to dispose of its interest in
Pemeas. Other Activities also includes corporate activities, several service
companies and other ancillary businesses, which do not have significant sales.

     Prior to the Recent Restructuring, Celanese held two wholly-owned captive
insurance companies that provided 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
retained 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. These
entities were transferred out of Celanese as part of the Recent Restructuring.
For additional information on the Recent Restructuring, see "Acquisition of
Celanese above."


                                       33



ACQUISITIONS AND DIVESTITURES

Celanese acquired the following businesses:

     o    In December 2002, Celanese purchased the European emulsions and global
          emulsion powders business of Clariant AG valued at (euro) 147 million.

Celanese divested the following businesses:

     o    The following divestitures occurred in October 2004:

          o    Celanese sold its travel services company, OnBoard GmbH, to
               Carlson Wagonlit Travel.

          o    Celanese transferred all of the shares of Celanese Americas
               Corporation ultimately to BCP Crystal.

          o    Celanese transferred its purchasing entity, CPO Celanese
               Aktiengesellschaft & Co. Procurement Olefin KG, Frankfurt am Main
               ("CPO") to Celanese Holding Europe.

     o    In February 2004, Celanese sold its acrylates business to Dow.

     o    In December 2003, the Ticona segment completed the sale of its nylon
          business line to BASF.

     o    Effective January 1, 2002, Celanese sold its interest in InfraServ
          GmbH & Co. Deponie Knapsack KG ("Deponie") to Trienekens AG.

     o    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.

     o    During 2002, Celanese sold its global allylamines and U.S. alkylamines
          businesses to U.S. Amines Ltd.

     For further information on the acquisitions and divestitures discussed
above, see "Item 5. Operating and Financial Review and Prospects - Summary of
Consolidated Results - Nine Months ended September 30, 2004 compared with the
Nine Months Ended September 30, 2003 - Discontinued Operations" and Note 7 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 and acetaldehyde. Although
Celanese has been able to obtain sufficient supplies of raw materials, there can
be no assurance that unforeseen developments will not affect Celanese's raw
material 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 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.
For example, the volatility of prices for natural gas and ethylene (whose cost
is in part linked to natural gas prices) has increased in recent years.
Celanese's production facilities rely largely on fuel oil, natural gas and
electricity for energy. Most of the raw materials for Celanese's European
operations are centrally purchased by an affiliate of Celanese, which also buys
raw materials on behalf of third parties. Celanese manages its exposure through
the use of long-term supply agreements, multi-year purchasing and sales
agreements, and until the Recent Restructuring, derivative instruments and
forward purchase contracts for commodity price hedging in North America.
Celanese's policy for the majority of its natural gas and butane requirements
allows entering into supply agreements and forward purchase or cash-settled swap
contracts. For the nine months ended September 30, 2004, Celanese did not enter
into any forward contracts for its butane


                                       34



requirements and, for natural gas, had positions covering about 35 percent of
its then existing North American Chemical Products segment requirements,
primarily as a result of forward contracts entered into in 2003. 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.

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 Chemical Products segment has been focusing on improving core
production technologies, such as improving catalyst development, and supporting
both debottlenecking and cost reduction efforts.

     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.

     Research and development costs are included in expenses as incurred.
Celanese's research and development costs for the nine months ended September
30, 2004 and the years ended December 31, 2003 and 2002 were (euro) 56 million,
(euro) 79 million and (euro) 69 million, respectively.

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.
However, Celanese does business in regions of the world where intellectual
property protection may be limited and difficult to enforce. Celanese maintains
strict information security policies and procedures wherever it does business.
Such information security policies and procedures include data encryption,
controls over the disclosure and safekeeping of confidential information, as
well as employee awareness training. Moreover, Celanese monitors its competitors
and vigorously challenges patent and trademark infringement. For example, the
Chemical 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.

     As patents expire, the products and processes described and claimed in
those patents become generally available for use by the public. Celanese's
European and U.S. patents for making Sunett, an important product in the
Performance Products segment, expired at the end of the first quarter of 2005,
which will reduce the ability to realize revenues from making Sunett due to
increased competition and potential limitations and will result in results of
operations and cash flows relating to the product being less favorable than
today. Celanese believes that the loss of


                                       35



no other 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:

     o    Emissions to the air;

     o    Discharges to surface and subsurface waters;

     o    Other releases into the environment;

     o    Generation, handling, storage, transportation, treatment and disposal
          of waste materials;

     o    Maintenance of safe conditions in the workplace; and

     o    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. Celanese's worldwide
expenditures during the nine months ended September 30, 2004, including those
with respect to third party and divested sites, and those for compliance with
environmental control regulations and internal company initiatives totaled
(euro) 51 million, of which (euro) 6 million was for capital projects. It is
anticipated that stringent environmental regulations will continue to be imposed
on Celanese and the industry in general. 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 its business
and financial results.

Air Issues

     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. With Russia's
ratification in November 2004, the Protocol has been adopted by enough of the
larger, industrialized countries (defined in Annex I to the Protocol) and came
into effect in February 2005 in all nations that ratified it. The European Union
or EU, including Germany and other countries where Celanese has interests,
ratified the Kyoto Protocol in 2002 and is formulating applicable regulations.
Recent European Union regulations required Germany, like all EU member states,
to have implemented a trading system covering carbon dioxide emissions by
January 1, 2005. Accordingly, an emission trading system came into effect in
Germany at the start of 2005. The new regulation directly affects Celanese's
power plants at the Kelsterbach and Oberhausen sites as well as the power plants
being operated by other InfraServ entities. The InfraServ entities may be
required to purchase carbon dioxide credits, which could result in increased
operating


                                       36



costs, or may be required to develop additional cost-effective methods to reduce
carbon dioxide emissions further, which could result in increased capital
expenditures. Celanese has not yet determined the impact of this legislation on
future capital spending. The new regulation indirectly affects Celanese's other
operations in the European Union, which may experience higher energy costs from
third party providers. Celanese has not yet determined the impact of this
legislation on its operating costs.

Chemical Products Issues

     Other new or revised regulations may place additional requirements on the
production, handling, labeling or use of some chemical products. 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 vinyl acetate monomer or VAM, which Celanese 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 labeling requirements, should apply
only to finished products that contain specified threshold concentrations of a
particular chemical. In the case of VAM, we currently do not expect a final
ruling until the end of the first half of 2005. We 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 end products should not be required but that, if it is, should only
be at relatively high parts per million of residual VAM levels in the end
products. It is not possible for us to predict the outcome or effect of any
final ruling.

     Several recent studies have investigated possible links between
formaldehyde exposure and various medical conditions, including leukemia. The
International Agency for Research on Cancer or IARC recently reclassified
formaldehyde from Group 2A (probable human carcinogen) to Group 1 (known human
carcinogen) based on studies linking formaldehyde exposure to nasopharyngeal
cancer, a rare cancer in humans. IARC also concluded that there is insufficient
evidence for a causal association between leukemia and occupational exposure to
formaldehyde, although it also characterized evidence for such an association as
strong. The results of IARC's review will be examined by government agencies
with responsibility for setting worker and environmental exposure standards and
labeling requirements.

     We are a producer of formaldehyde and plastics derived from formaldehyde.
We, together with other producers and users, are evaluating these findings. We
cannot predict the final effect of IARC's reclassification.

     Other recent initiatives will potentially require toxicological testing and
risk assessments of a wide variety of chemicals, including chemicals used or
produced by us. These initiatives include the European Environment and Health
Strategy, commonly known as SCALE, and the proposal for the Registration,
Evaluation and Authorization and Restriction of Chemicals or REACH. REACH, which
was proposed by the European Commission in October 2003, will establish a system
to register and evaluate chemicals manufactured or imported to the European
Union. Depending on the final ruling, additional testing, documentation and risk
assessments will occur for the chemical industry. This will affect European
producers of chemicals as well as all chemical companies worldwide that export
to member states of the European Union. The final ruling has not yet been
decided.

     The above-mentioned assessments may result in heightened concerns about the
chemicals involved, and in additional requirements being placed on the
production, handling, labeling or use of the subject chemicals. Such concerns
and additional requirements could increase the cost incurred by our customers to
use our chemical products and otherwise limit the use of these products, which
could adversely affect the demand for these products.

Remediation Issues

     Our 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-Hoechst, Gendorf,
Huerth-Knapsack, Wiesbaden, Oberhausen and Kelsterbach. Producers at the sites,
including our subsidiaries, are owners of limited partnership interests in the
respective InfraServ companies. 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


                                       37



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 we have an interest, have recorded provisions totaling
approximately (euro) 59 million as of September 30, 2004. 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 us 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 some
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 our facilities in Germany are over 100 years old, and there may be
significant contamination at these facilities. Provisions are not recorded for
potential soil contamination liability at facilities still under operation, as
German law does not currently require owners or operators to investigate and
remedy soil contamination until the facility is closed and dismantled, unless
the authorities otherwise direct. However, soil contamination known to the owner
or operator must be remedied if such contamination is likely to have an adverse
effect on the public. If we were to terminate operations at one of our
facilities or if German law were changed to require such removal or clean up,
the cost could be material to us. We cannot accurately determine the ultimate
potential liability for investigation and clean up at such sites. We adjust
provisions as new remedial commitments are made. See Notes 25 and 26 to the
Consolidated Financial Statements.

     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 located in Germany, the U.S., and other countries 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 (euro) 250
million. Hoechst will bear those liabilities exceeding (euro) 250 million, but
Celanese will reimburse Hoechst for one-third of those liabilities for amounts
that exceed (euro) 750 million. Celanese has made payments through the nine
months ended September 30, 2004 of (euro) 38 million for environmental
contamination liabilities in connection with the divestiture agreements. As of
September 30, 2004, Celanese has reserves of (euro) 38 million for this
contingency and may be required to record additional reserves in the future. See
Notes 25 and 26 to the Consolidated Financial Statements.

     As of September 30, 2004 and December 31, 2003, Celanese had reserves of
(euro) 119 million and (euro) 126 million, respectively, for environmental
matters worldwide. We regularly review the liabilities for these sites and has
accrued its best estimate of its ultimate liability for investigation or cleanup
costs, but, due to the many variables involved in such estimation, the ultimate
liability may vary from these estimates.

ORGANIZATIONAL STRUCTURE

Significant Subsidiaries

     Until the Recent Restructuring, Celanese AG operated its global businesses
through subsidiaries in Europe, North America and Asia, most of which were 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 during the
periods covered by this annual report were consolidated under CAC, then a
wholly-owned subsidiary which, through its wholly-owned subsidiary, CNA
Holdings, Inc., directly or indirectly owns the North American operating
companies. CAC, along with its subsidiaries, was transferred out of Celanese on
October 5, 2004 as part of the Recent Restructuring. For more information on the
Recent Restructuring, see "Acquisition of Celanese above."


                                       38



     The table below sets forth Celanese's significant subsidiaries as of
September 30, 2004:



-----------------------------------------------------------------------------------------------------
NAME OF COMPANY                                           COUNTRY OF INCORPORATION   PERCENTAGE OWNED
-----------------------------------------------------------------------------------------------------

Celanese Canada Inc.*                                     Canada                          100.00%
-----------------------------------------------------------------------------------------------------
Celanese Chemicals Europe GmbH                            Germany                         100.00%
-----------------------------------------------------------------------------------------------------
Celanese Holding GmbH                                     Germany                         100.00%
-----------------------------------------------------------------------------------------------------
Nutrinova Nutrition Specialties & Food Ingredients GmbH   Germany                         100.00%
-----------------------------------------------------------------------------------------------------
Ticona GmbH                                               Germany                         100.00%
-----------------------------------------------------------------------------------------------------
Grupo Celanese SA*                                        Mexico                           99.88%
-----------------------------------------------------------------------------------------------------
Celanese Singapore Pte. Ltd.                              Singapore                       100.00%
-----------------------------------------------------------------------------------------------------
Celanese Acetate LLC*                                     USA                             100.00%
-----------------------------------------------------------------------------------------------------
Celanese Americas Corporation*                            USA                             100.00%
-----------------------------------------------------------------------------------------------------
Celanese Ltd.*                                            USA                             100.00%
-----------------------------------------------------------------------------------------------------
CNA Holdings, Inc.*                                       USA                             100.00%
-----------------------------------------------------------------------------------------------------
Ticona Polymers, Inc.*                                    USA                             100.00%
-----------------------------------------------------------------------------------------------------


*Transferred out of Celanese on October 5, 2004.

DESCRIPTION OF PROPERTY

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

     As of September 30, 2004, 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 as of September 30, 2004.



------------------------------------------------------------------------------------------------------------------
CORPORATE CENTER
------------------------------------------------------------------------------------------------------------------
SITE                            LEASED/OWNED                                      PRODUCTS/ FUNCTION
------------------------------------------------------------------------------------------------------------------

Kronberg/Taunus, Germany        Leased                                            Administrative offices
------------------------------------------------------------------------------------------------------------------



                                       39



------------------------------------------------------------------------------------------------------------------
CHEMICAL PRODUCTS
------------------------------------------------------------------------------------------------------------------
SITE                            LEASED/OWNED                                      PRODUCTS / FUNCTION
------------------------------------------------------------------------------------------------------------------

Bay City, Texas, USA*           Owned                                             Butyl acetate
                                                                                  Iso-butylacetate
                                                                                  Propylacetate
                                                                                  Vinyl acetate monomer
                                                                                  Carboxylic acids
                                                                                  n/i-Butyraldehyde
                                                                                  Butyl alcohols
                                                                                  Propionaldehyde,
                                                                                  Propyl alcohols
------------------------------------------------------------------------------------------------------------------
Bishop, Texas, USA*             Owned                                             Formaldehyde
                                                                                  Methanol
                                                                                  Pentaerythritol
                                                                                  Polyols
------------------------------------------------------------------------------------------------------------------
Calvert City, Kentucky, USA*    Owned                                             Polyvinyl alcohol
------------------------------------------------------------------------------------------------------------------
Cangrejera, Veracruz, Mexico*   Owned                                             Acetic anhydride
                                                                                  Acetone derivatives
                                                                                  Ethyl acetate
                                                                                  Vinyl acetate monomer
                                                                                  Methyl amines
------------------------------------------------------------------------------------------------------------------
Clear Lake, Texas, USA*         Owned                                             Acetic acid
                                                                                  Vinyl acetate monomer
------------------------------------------------------------------------------------------------------------------
Edmonton, Alberta, Canada*      Owned                                             Methanol
------------------------------------------------------------------------------------------------------------------
Frankfurt am Main, Germany      Owned by InfraServ GmbH & Co. Hochst KG, in       Acetaldehyde
                                which Celanese holds a 31.2 percent limited       Butyl acetate
                                partnership interest                              Vinyl acetate monomer
                                                                                  Conventional emulsions
                                                                                  Emulsion powders
                                                                                  Vinyl acetate ethylene emulsions
------------------------------------------------------------------------------------------------------------------
Oberhausen, Germany             Owned by InfraServ GmbH & Co. Oberhausen KG, in   Amines
                                which Celanese holds an 84.0 percent limited      Carboxylic Acids
                                partnership interest                              Neopentyl Glycols
------------------------------------------------------------------------------------------------------------------
Pampa, Texas, USA*              Owned                                             Acetic acid
                                                                                  Acetic anhydride
                                                                                  Ethyl acetate
------------------------------------------------------------------------------------------------------------------
Pasadena, Texas, USA*           Owned                                             Polyvinyl alcohol
------------------------------------------------------------------------------------------------------------------
Jurong Island, Singapore        Owned                                             Acetic acid
                                                                                  Butyl acetate
                                                                                  Ethyl acetate
                                                                                  Vinyl acetate monomer
------------------------------------------------------------------------------------------------------------------
Koper, Slovenia                 Owned                                             Conventional emulsions
------------------------------------------------------------------------------------------------------------------
Tarragona, Spain                Owned by Complejo Industrial Taqsa AIE, in        Vinyl acetate monomer
                                which Celanese holds a 15.0 percent share
------------------------------------------------------------------------------------------------------------------
Tarragona, Spain                Owned                                             Vinyl acetate ethylene emulsions
------------------------------------------------------------------------------------------------------------------
Tarragona, Spain                Leased                                            Conventional emulsions
------------------------------------------------------------------------------------------------------------------
Perstorp, Sweden                Owned                                             Conventional emulsions
                                                                                  Vinyl acetate ethylene emulsions
------------------------------------------------------------------------------------------------------------------


*Transferred out of Celanese in the Recent Restructuring

---------------------------------------------------------------
ACETATE PRODUCTS*
---------------------------------------------------------------
SITE                        LEASED/OWNED    PRODUCTS / FUNCTION
---------------------------------------------------------------
Lanaken, Belgium*               Owned      Tow
---------------------------------------------------------------
Narrows, Virginia, USA*         Owned      Tow, Filament, Flake
---------------------------------------------------------------
Ocotlan, Jalisco, Mexico*       Owned      Tow, Filament
---------------------------------------------------------------

*Transferred out of Celanese in the Recent Restructuring.


                                       40



--------------------------------------------------------------------------------------------------------
TECHNICAL POLYMERS TICONA
--------------------------------------------------------------------------------------------------------
SITE                               LEASED/OWNED                          PRODUCTS / FUNCTION
--------------------------------------------------------------------------------------------------------

Auburn Hills, Michigan, USA*       Leased                                Automotive Development Center
--------------------------------------------------------------------------------------------------------
Bishop, Texas, USA*                Owned                                 Polyacetals (Celcon(R))
                                                                         PE-UHMW (GUR(R))
                                                                         Compounding
--------------------------------------------------------------------------------------------------------
Florence, Kentucky, USA*           Owned                                 Compounding
--------------------------------------------------------------------------------------------------------
Kelsterbach, Germany               Owned by InfraServ GmbH & Co.         LFT (Celstran(R))
                                   Kelsterbach KG, in which Celanese     Polyacetals (Hostaform(R))
                                   holds a 100.0% limited partnership    Compounding
                                   interest
--------------------------------------------------------------------------------------------------------
Oberhausen, Germany                Owned by InfraServ GmbH & Co.         PE-UHMW (GUR)
                                   Oberhausen KG, in which Celanese      COC and Norbornene (Topas(R)**)
                                   holds an 84.0% limited partnership
                                   interest
--------------------------------------------------------------------------------------------------------
Shelby, North Carolina, USA*       Owned                                 LCP (Vectra(R))
                                                                         PBT and PET (Celanex(R))
                                                                         Compounding
--------------------------------------------------------------------------------------------------------
Wilmington, North Carolina, USA*   Leased by a non-consolidated joint    PPS (Fortron(R))
                                   venture, in which Celanese Americas
                                   Corporation has a 50% interest
--------------------------------------------------------------------------------------------------------
Winona, Minnesota, USA*            Owned                                 LFT (Celstran)
--------------------------------------------------------------------------------------------------------


*Transferred out of Celanese in the Recent Restructuring.

** Technical Polymers Ticona's leased plant for its Topas cycloolefin copolymer
in Oberhausen, Germany commenced production in September 2000. The plant has
been operating at significantly less than commercial capacity and in December
2004 Celanese approved a plan to dispose of the business. For further
information on Topas, see "Information on the Company - Technical Polymers
Ticona."



--------------------------------------------------------------------------------------------------------
PERFORMANCE PRODUCTS
--------------------------------------------------------------------------------------------------------
SITE                               LEASED/OWNED                          PRODUCTS / FUNCTION
--------------------------------------------------------------------------------------------------------

Frankfurt am Main, Germany         Owned by InfraServ GmbH & Co. Hochst  Sorbates
                                   KG, in which Celanese holds a 31.2%   Sunett(R)
                                   limited partnership interest
--------------------------------------------------------------------------------------------------------


     Polyplastics has its principal production facilities in Japan, Taiwan and
Malaysia. Korea Engineering Plastics has its principal production facilities in
South Korea. Celanese's Chemical Products segment has joint ventures with
manufacturing facilities in Saudi Arabia and Germany and its Acetate Products
segment has three joint ventures with production facilities in China.
Polyplastics, the Saudi Arabian joint venture, and the Acetate Products segment
were transferred out of Celanese as a result of the Recent Restructuring.

     For the nine months ended September 30, 2004, Celanese and its consolidated
subsidiaries, in the aggregate, had capital expenditures for the expansion and
modernization of production, manufacturing, research and administrative
facilities of (euro) 123 million. During the years ended December 31, 2003 and
2002, these expenditures amounted to (euro) 185 million and (euro) 214 million,
respectively, of which (euro) 79 million, (euro) 37 million and (euro) 7 million
were spent in North America, Europe, and Asia, respectively. Celanese believes
that its current facilities and those of its consolidated subsidiaries are
adequate to meet the requirements of Celanese's 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 12 and 26 to the Consolidated Financial Statements.


                                       41



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 AG and subsidiaries
("Celanese" or the "Company") together with Celanese's Consolidated Financial
Statements and the notes to those financial statements, which were prepared in
accordance with U.S. GAAP.

     In July 2004, the majority of Celanese's shareholders approved a change of
the Celanese fiscal accounting year to commence October 1st and end September
30th. As a result, Celanese's 2004 fiscal year ended on September 30, 2004.
Accordingly, the results as operations and cash flows for the nine months ended
September 30, 2003 are presented on an unaudited basis. The results presented in
this document should not be taken as an indication of the results of operations
to be reported for any subsequent period or for the full fiscal year,
particularly following the transfer on October 5, 2004 of Celanese Americas
Corporation and CPO Celanese AG & Co. Procurement Olefin KG, Frankfurt am Main
to BCP Caylux Holdings Luxembourg S.C.A. and Celanese Europe Holding GmbH & Co.
KG, respectively, which is discussed below.

     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 Information"
located at the end of this section.

     Reconciliation of Non-GAAP Measures: Management compensates for the
limitations of using non-GAAP financial measures by using them to supplement
GAAP results to provide a more complete understanding of the factors and trends
affecting the business than U.S. GAAP results alone. In this regard, we disclose
net debt and trade working capital, which are non-GAAP financial measures. Net
debt is defined as total debt less cash and cash equivalents, and 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. Management uses net debt to
evaluate capital structure and trade working capital to evaluate investment in
receivables and inventory, net of payables. The most directly comparable
financial measures presented in accordance with U.S. GAAP in our financial
statements for net debt and trade working capital are total debt and the working
capital components, respectively.

     Net debt and trade working capital are not a substitute for any U.S. GAAP
financial measure. In addition, calculations of net debt and trade working
capital contained in this report may not be consistent with that of other
companies.

ACQUISITION OF CELANESE

     During April 2004, Celanese Europe Holding GmbH & Co. KG, formerly known as
BCP Crystal Acquisition GmbH & Co. KG ("BCP" or the "Purchaser"), a German
limited partnership controlled by a group of investor funds advised by The
Blackstone Group, completed a voluntary tender offer and acquired approximately
84.3% of the outstanding shares, excluding treasury shares, of Celanese AG for a
price of (euro)32.50 per share. At September 30, 2004, BCP owned 83.4% of the
outstanding shares of Celanese AG. Following the completion of the acquisition,
the Celanese AG shares were delisted from the New York Stock Exchange on June 2,
2004. Celanese AG shares continue to trade on the Frankfurt Stock Exchange in
Germany.

     At March 31, 2004, Celanese had (euro) 144 million of net deferred tax
assets arising from U.S. net operating loss ("NOL") carryforwards. Under U.S.
tax law, the utilization of the deferred tax asset related to NOL carryforwards
is subject to an annual limitation if there is a more than 50 percentage point
change in shareholder ownership. The acquisition triggered this limitation and
it is expected to adversely affect the Company's ability to utilize its NOL
carryforwards. As a result, management has determined that it is not more likely
than not that the Company will be able to realize any of the deferred tax assets
attributable to its NOL carryforwards and recorded a valuation allowance of
(euro)144 million during the nine months ended September 30, 2004.

     A domination and profit and loss transfer agreement (the "Domination
Agreement") between Celanese AG and BCP became effective on October 1, 2004.
When the Domination Agreement became effective, BCP was obligated to offer to
acquire all outstanding Celanese AG shares from the minority shareholders of
Celanese AG in return for payment of fair cash compensation. This compensation
is contingent upon BCP having adequate liquidity. The


                                       42



amount of this fair cash compensation was determined to be (euro)41.92 per
share, plus interest, in accordance with applicable German law. Any minority
shareholder who elects not to sell its shares to BCP will be entitled to remain
a shareholder of Celanese AG and to receive a gross guaranteed fixed annual
payment on those shares of (euro)3.27 per share less certain corporate taxes in
lieu of any future dividend. Taking into account the circumstances and the tax
rates at the time of entering into the Domination Agreement, the net guaranteed
fixed annual payment is (euro)2.89 per share for a full fiscal year, which
commenced on October 1, 2004. The net guaranteed fixed annual payment may,
depending on applicable corporate tax rates, in the future be higher, lower or
the same as (euro)2.89 per share. The Domination Agreement cannot be terminated
by Celanese Europe Holding in the ordinary course of business until September
30, 2009.

     Also under the terms of the Domination Agreement, the Purchaser, as the
dominating entity, among other things, is required to compensate Celanese AG for
any annual loss incurred by Celanese AG, on a non-consolidated basis, the
dominated entity, at the end of the fiscal year when the loss was incurred. This
obligation to compensate Celanese AG for annual losses determined in accordance
with German accounting regulations will apply during the entire term of the
Domination Agreement. In addition, BCP is entitled to give instructions directly
to the management board of Celanese AG, including, but not limited to,
instructions that are disadvantageous to Celanese AG, as long as such
disadvantageous instructions benefit BCP or the companies affiliated with either
BCP or Celanese AG. As a dominated company, Celanese AG may be affected by risks
that affect BCP and its affiliates, including, but not limited to, risks arising
out of the debt levels of some of these companies.

     The Domination Agreement is subject to legal challenges instituted by
dissenting shareholders. Minority shareholders have filed nine actions against
Celanese AG in the Frankfurt District Court (Landgericht), seeking, among other
things, to set aside the shareholder resolutions passed at the extraordinary
general meeting held on July 30 and 31, 2004 based, among other things, on the
alleged violation of procedural requirements and information rights of the
shareholders, to declare the Domination Agreement and the change in the fiscal
year void and to prohibit Celanese AG from performing its obligations under the
Domination Agreement. Pursuant to German law, the time period for the filing of
such challenges has expired. Further, several additional minority shareholders
have joined the proceedings via third party intervention in support of the
plaintiffs. The Purchaser has joined the proceedings via third party
intervention in support of Celanese AG. In addition, a German court could revoke
the registration of the Domination Agreement in the commercial register. On
August 2, 2004, two minority shareholders instituted public register proceedings
with the Konigstein Local Court (Amtsgericht) and the Frankfurt District Court,
both with a view to have the registration of the Domination Agreement in the
Commercial Register deleted (Amtsloschungsverfahren).

     In connection with the acquisition of Celanese AG by BCP, BCP agreed to
pre-fund $463 million ((euro)373 million) of certain pension obligations. As of
September 30, 2004, $105 million ((euro)85 million) was pre-funded to the German
pension plans and $54 million ((euro)44 million) of cash was segregated to be
used exclusively for the pre-funding of CAC's non-qualified pension obligations.
During October 2004, an additional $300 million ((euro)241 million) was
prefunded to CAC's U.S. qualified pension plan.

     In October 2004, the parent of the BCP completed an organizational
restructuring ("Recent Restructuring"). As part of the Recent Restructuring, the
parent of BCP, by causing BCP to give corresponding instruction under the
Domination Agreement, effected the transfer of all of the shares of Celanese
Americas Corporation ("CAC") from Celanese Holding GmbH, a wholly owned
subsidiary of Celanese, to BCP Caylux Holdings Luxembourg S.C.A. ("BCP Caylux")
which resulted in BCP Caylux owning 100% of the equity of CAC and, indirectly,
all of its assets, including subsidiary stock. This transfer was made equal to
CAC's fair market value of (euro)291 million. In addition, CPO Celanese AG & Co.
Procurement Olefin KG, Frankfurt am Main ("CPO"), a wholly owned subsidiary of
Celanese, which acted as a purchasing agent on behalf of Celanese as well as
third parties, was transferred to BCP. This transfer was made equal to CPO's
fair market value of (euro)13 million. As a result of these transfers, Celanese
AG now serves primarily as the holding company for the European business and
certain Asian businesses of Celanese Corporation, the ultimate parent of BCP and
Celanese AG. Management is in the process of determining the potential impact of
the transfers on the Company's financial statements. (See Notes 2 and 30 to the
Consolidated Financial Statements)

     If legal challenges of the Domination Agreement by dissenting shareholders
of Celanese AG are successful, some or all actions taken under the Domination
Agreement, including the transfer of CAC and CPO may be required to be reversed
and the Purchaser may be required to compensate Celanese AG for damages caused
by such actions.


                                       43



BASIS OF PRESENTATION

     In July 2004, the majority of Celanese AG's shareholders approved a change
of the Celanese fiscal accounting year to commence October 1st and end September
30th. As a result, Celanese's 2004 fiscal year ended on September 30, 2004.

     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 AG ("Hoechst"). Hoechst
distributed all of the outstanding shares of Celanese to existing Hoechst
shareholders.

     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 include the accounts of the Company and its majority owned
subsidiaries over which Celanese exercises control as well as special purpose
entities which are variable interest entities where Celanese is deemed the
primary beneficiary. All significant intercompany accounts and transactions have
been eliminated in consolidation. The Consolidated Financial Statements also
have been presented to show separately the effects of discontinued operations.

     The financial condition, results of operations and cash flows 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 (euro)142 million of expense for the nine months ended
September 31, 2004 and (euro)7 million of income for the nine months ended
September 31, 2003. Special charges totaled (euro)5 million of expense for the
year ended December 31, 2003 and (euro)5 million of income for the year ended
December 31, 2002. For a further discussion of special charges, see "Summary by
Business Segment - Nine Months Ended September 30, 2004 Compared with Nine
Months Ended September 30, 2003 - Special Charges," "Summary of Consolidated
Results - Nine Months Ended September 30, 2004 Compared with Nine Months Ended
September 30, 2003 - Special Charges," "Summary by Business Segment - 2003
Compared with 2002 - Special Charges" and "Summary of Consolidated Results -
2003 Compared with 2002 - Special Charges."

     During the three months ended June 30, 2004, we changed our inventory
valuation method of accounting for our U.S. subsidiaries from last-in first-out
("LIFO") to first-in first-out ("FIFO"). This change will more closely represent
the physical flow of goods resulting in ending inventory which will better
represent the current cost of the inventory and the costs in income will more
closely match the flow of goods. The FIFO method is now used to determine cost
for all inventories of Celanese except for stores and supplies, which are
generally valued using the average cost method. Information throughout this
document has been restated for all periods presented to reflect this change. The
impact of this change on reported net earnings (loss) and earnings per share for
the years ended December 31, 2003 and 2002 is as follows:

                                                             YEARS ENDED
                                                     ---------------------------
                                                             DECEMBER 31,
                                                             ------------
                                                             2003    2002
                                                             ----   -----
                                                     (IN (EURO) MILLIONS, EXCEPT
                                                         FOR PER SHARE DATA)
                                                     ---------------------------
Net earnings (loss) prior to restatement..........            131    187
Change in inventory valuation method..............              1    (19)
Income tax effect of change.......................             --      7
                                                              ---    ---
Net earnings (loss) as restated...................            132    175
                                                              ===    ===

Basic and diluted earnings (loss) per share: (1)
Prior to restatement..............................           2.65   3.72
Change in inventory valuation method, net of tax..           0.02  (0.24)
                                                             ----   ----
As restated.......................................           2.67   3.48
                                                             ====   ====

(1)  Per-share data are based on weighted average shares outstanding in each
     period.


                                       44



     In January 2003, and subsequently revised in December 2003, the FASB issued
FIN No. 46, Consolidation of Variable Interest Entities and FIN No. 46 Revised
(collectively, "FIN No. 46"), respectively. FIN No. 46 clarifies the application
of Accounting Research Bulletin No. 51, "Consolidation of Financial Statements"
requiring the consolidation of certain variable interest entities ("VIEs") which
are defined as entities having equity that is not sufficient to permit such
entities to finance their activities without additional subordinate financial
support or whose equity holders lack certain characteristics of a controlling
financial interest. The company deemed to be the primary beneficiary is required
to consolidate the VIE. FIN No. 46 requires VIEs that meet the definition of a
special purpose entity to be consolidated by the primary beneficiary as of
December 31, 2003. For VIEs that do not meet the definition of a special purpose
entity, consolidation is not required until March 31, 2004; however, expanded
disclosure is required at December 31, 2003.

     Celanese has a lease agreement for its cyclo-olefin copolymer ("COC") plant
with Dacron GmbH, a special purpose entity. This special purpose entity was
created primarily for the purpose of constructing and subsequently leasing the
COC plant to Celanese. This arrangement qualifies as a VIE. Based upon the terms
of the lease agreement and the residual value guarantee Celanese provided to the
lessors, Celanese is deemed the primary beneficiary of the VIE. At December 31,
2003, Celanese recorded (euro)35 million of additional assets and liabilities
from the consolidation of this special purpose entity. The consolidation of this
entity did not have a material impact on Celanese's financial position or
results of operations and cash flows for the nine months ended September 30,
2004.

     In April 2004, Celanese and a group of investors led by Conduit Ventures
Ltd. entered into a joint venture, which was named Pemeas GmbH. This joint
venture was formed in order to advance the commercialization of Celanese's fuel
cell technology. Pemeas GmbH is considered a variable interest entity as defined
under FIN No. 46, Consolidation of Variable Interest Entities. Celanese is
deemed the primary beneficiary of this variable interest entity and,
accordingly, consolidates this entity in its consolidated financial statements.
The consolidation of this entity did not have a material impact on Celanese's
financial position or results of operations and cash flows for the nine months
ended September 30, 2004.

     In March 2004, the EITF reached a consensus on Issue No. 03-01, Other than
Temporary Impairment, which outlines the basic model to be used to evaluate
whether an investment is impaired and sets the disclosure requirements for such
investments. EITF Issue No. 03-01 is to be applied prospectively in periods
beginning after June 15, 2004. The Company has applied the provisions of EITF
Issue No. 03-01 in the current reporting period with no material impact on
Celanese's financial position or results of operations and cash flows for the
nine months ended September 30, 2004.

MAJOR EVENTS IN 2004

     In response to greater demand for Ticona's technical polymers, Celanese
announced two projects to expand manufacturing capacity. Ticona announced plans
to increase production of polyacetal in North America by about 20%, raising
total capacity to 102,000 tons per year at the Bishop, Texas facility. This
project was completed in October 2004. Fortron Industries, a joint venture of
Ticona and Kureha Chemicals Industries, plans to increase the capacity of its
Fortron polyphenylene sulfide plant in Wilmington, North Carolina, by 25% by the
end of 2005.

     In October 2004, we announced plans to implement a strategic restructuring
of our acetate business to increase the efficiency, reduce overcapacity in
certain areas and to focus on products and markets that provide long-term value.
As part of this restructuring, we plan to discontinue acetate filament
production by mid-2005 and to consolidate our acetate flake and tow operations
at three locations, instead of five. The restructuring resulted in (euro)100
million of asset impairment charges recorded as a special charge and (euro)10
million in charges to depreciation for related asset retirement obligations for
the nine months ended September 30, 2004.

     In addition to the transfers of CAC and CPO, in December 2004, we approved
a plan to dispose of the cyclo-olefin copolymer ("COC") business included within
the Technical Polymers Ticona segment and our interest in Pemeas GmbH, the fuel
cell joint venture included in Other Activities. As a result of this decision,
we will record an impairment loss of (euro)25 million related to the COC
business during the three months ended December 31, 2004. The operating loss for
COC was (euro)31 million for the year ended December 31, 2003 and (euro)22
million for the nine months ended September 30, 2004. The operating loss for the
fuel cell business was (euro)10 million for the year ended December 31, 2003 and
(euro)6 million for the nine months ended September 30, 2004. We also expect
that in the three


                                       45



months ended December 31, 2004 equity in net earnings of affiliates will include
a (euro)9 million charge, representing Celanese's portion of restructuring
charges recorded by our European Oxo chemicals joint venture.


                                       46



FINANCIAL HIGHLIGHTS



                                                 NINE MONTHS ENDED SEPTEMBER 30,         YEARS ENDED DECEMBER 31,
                                           ----------------------------------------------------------------------
                                                 2004                   2004     2003         2003     2002
                                           ----------------            ------   ------       ------   ------
                                            (IN $ MILLIONS,                       (UNAUDITED)
                                           EXCEPT FOR SHARE
                                             AND PER SHARE
                                               DATA)(1)       (IN (EURO) MILLIONS, EXCEPT FOR SHARE AND PER SHARE DATA)
                                           ----------------   ---------------------------------------------------------

STATEMENT OF OPERATIONS DATA:
Net sales ..............................         3,789                  3,051    3,103        4,075    4,064
Cost of sales ..........................        (3,077)                (2,478)  (2,592)      (3,435)  (3,359)
Special charges
   Insurance recoveries
      associated with plumbing cases ...             4                      3       94           94       --
   Sorbates antitrust matters ..........            --                     --      (84)         (84)      --
   Restructuring, impairment and
      other special charges ............          (180)                  (145)      (3)         (15)       5
Operating profit .......................            57                     46      115          107      183
Earnings from continuing operations
   before tax and minority interests ...           127                    103      179          177      190
Income tax provision ...................          (237)                  (191)     (55)         (48)     (59)
Earnings (loss) from continuing
   operations ..........................          (110)                   (88)     124          129      131
Earnings (loss) from discontinued
   operations ..........................            22                     18       (7)           4       25
Cumulative effect of changes in
   accounting principles ...............            --                     --       (1)          (1)      19
Net earnings (loss) ....................           (88)                   (70)     116          132      175
Earnings (loss) per common
   share - basic and diluted:
   from continuing operations ..........         (2.23)                 (1.78)    2.51         2.61     2.60
   from discontinued operations ........          0.45                   0.36    (0.15)        0.08     0.50
   from cumulative effect of changes
      in accounting principles .........            --                     --    (0.02)       (0.02)    0.38
                                                ------                 ------   ------       ------   ------
   Net earnings (loss) .................         (1.78)                 (1.42)    2.34         2.67     3.48
                                                ======                 ======   ======       ======   ======




                                                             AS OF SEPTEMBER 30,       AS OF DECEMBER 31,
                                                                 2004           2004          2003
                                                         -------------------   -----   ------------------
                                                         (IN $ MILLIONS) (1)      (IN (EURO) MILLIONS)
                                                         -------------------   --------------------------

BALANCE SHEET DATA:
Trade receivables, net - third party and affiliates...            827            666            571
Plus: Inventories.....................................            565            455            404
Less: Trade payables - third party and affiliates.....            577            465            468
                                                                -----          -----          -----
Trade working capital.................................            815            656            507
                                                                =====          =====          =====
Short-term borrowings and current installments of
   long-term debt - third party and affiliates........            127            102            117
Plus: Long-term debt..................................            602            485            387
                                                                -----          -----          -----
Total debt............................................            729            587            504
Less: Cash and cash equivalents.......................            276            222            117
                                                                -----          -----          -----
Net debt..............................................            453            365            387
                                                                =====          =====          =====

Total assets..........................................          6,630          5,340          5,395
Shareholders' equity..................................          2,344          1,888          2,044




                                                  NINE MONTHS ENDED SEPTEMBER 30,            YEARS ENDED DECEMBER 31,
                                         ----------------------------------------------------------------------------
                                                  2004                         2004   2003         2003   2002
                                         ----------------------                ----   ----         ----   ----
                                                                                      (UNAUDITED)
                                         (IN $ MILLIONS, EXCEPT
                                            PERCENTAGES) (1)      (IN (EURO) MILLIONS, EXCEPT FOR SHARE AND PER SHARE DATA)
                                         ----------------------   ---------------------------------------------------------

OTHER DATA:
Depreciation and amortization.........            226                           182    192          260    262
Operating margin(1)...................            1.5%                          1.5%   3.7%         2.6%   4.5%
Earnings (loss) from continuing
   operations before tax and minority
   interests as a percentage of net
   sales..............................            3.4%                          3.4%   5.8%         4.3%   4.7%


(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. $1.2417 per
     (euro)1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

(2)  Defined as operating profit (loss) divided by net sales.


                                       47



OVERVIEW - NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 2003

     Stronger business conditions for the nine months ended September 30, 2004
compared to the same period last year were overshadowed by deferred tax asset
write-offs and valuation allowances of (euro)186 million related to U.S. NOL
carryforwards, certain state tax benefits, and other deferred tax assets. The
Company also recorded special charges of (euro)142 million for the nine months
ended September 30, 2004 largely related to plans by the Acetate Products
segment to consolidate tow production at fewer sites and to discontinue
production of acetate filament and advisory services associated with the tender
offer. Special charges of (euro)5 million were recorded for the nine months
ended September 30, 2003 resulting mainly from income of (euro)94 million from
insurance recoveries, which was largely offset by expenses of (euro)84 million
associated with antitrust matters in the sorbates industry.

     Volumes rose in all business segments, particularly in Chemicals Products
and Technical Polymers Ticona. Pricing increased slightly as higher pricing in
the Chemical Products segment more than offset pricing declines in the Ticona
and Performance Products segments. The changes in the composition of the
Chemical Products segment resulted from the transfer of the European oxo
business into a joint venture in the fourth quarter of 2003 and the effects of a
contract manufacturing arrangement under which certain acrylates products are
now being sold. Only the margin realized under the contract manufacturing
arrangement is reported in net sales.

     Operating profit benefited from volume and price increases and lower
expense of (euro)34 million for stock appreciation rights, which were partially
offset by higher raw material costs. Operating profit declined, however, by 60%
to (euro)46 million primarily due to special charges of (euro)142 million in
2004 compared to income of (euro)7 million for the same period in 2003. Special
charges in 2004 largely represented asset impairments for the Acetate Products'
restructuring, while special charges in 2003 resulted mainly from income of
(euro)94 million from insurance recoveries, which were largely offset by
expenses of (euro)84 million associated with antitrust matters in the sorbates
industry.

     Net earnings decreased to a loss of (euro)70 million compared to earnings
of (euro)116 million for the same period a year earlier primarily due to
valuation allowances associated with deferred tax assets and lower operating
profit. The majority of the valuation allowances, (euro)144 million, relate to
U.S. net operating loss ("NOL") carryforwards. Under U.S. tax law, a change in
ownership of more than fifty percentage points results in an annual limitation
on the future utilization of the NOL carryforwards. Additionally, (euro)25
million relates to a valuation allowance applied against net Canadian deferred
tax assets.

     Net debt decreased by 6% to (euro)365 million as some of the proceeds from
the sale of the acrylates business increased cash and cash equivalents. Total
debt, however, increased primarily for the prefunding of benefit obligations and
the financing of higher trade working capital.


                                       48



SELECTED DATA BY BUSINESS SEGMENT



                                                        NINE MONTHS ENDED SEPTEMBER 30,
                                          -----------------------------------------------------------
                                                       2004                            2003
                                          -------------------------------   -------------------------
                                                                   (UNAUDITED)
                                          -----------------------------------------------------------
                                                                  % OF                       % OF
                                           $(1)   (EURO)(3)   SEGMENTS(2)   (EURO)(3)   SEGMENTS(2)
                                          -----   ---------   -----------   ---------   -------------
                                                       (IN MILLIONS, EXCEPT PERCENTAGES)
                                          -----------------------------------------------------------

NET SALES
Chemical Products .....................   2,501     2,014          65         2,070           66
Acetate Products ......................     528       425          14           430           14
Technical Polymers Ticona .............     669       539          17           517           16
Performance Products ..................     138       111           4           117            4
                                          -----     -----         ---         -----          ---
Segment Total .........................   3,836     3,089         100         3,134          100
                                                                  ===                        ===
Other Activities ......................      42        34                        32
Intersegment Eliminations .............     (89)      (72)                      (63)
                                          -----     -----                     -----
Total Net Sales .......................   3,789     3,051                     3,103
                                          =====     =====                     =====

SPECIAL CHARGES
Chemical Products .....................     (20)      (16)         14            --           --
Acetate Products ......................    (124)     (100)         84            --           --
Technical Polymers Ticona:
   Insurance recoveries associated with
      plumbing cases ..................       4         3          (3)           94         n.m.
   Restructuring, impairment and other
      special charges, net ............      (7)       (6)          5            (3)         (43)
Performance Products:
   Sorbates antitrust matters .........      --        --          --           (84)        n.m.
                                          -----     -----         ---         -----         ----
Segment Total .........................    (147)     (119)        100             7          100
                                                                  ===                       ====
Other Activities ......................     (29)      (23)                       --
                                          -----     -----                     -----
Total Special Charges .................    (176)     (142)                        7
                                          =====     =====                     =====

OPERATING PROFIT (LOSS)
Chemical Products .....................     174       140          92           111           58
Acetate Products ......................     (98)      (79)        (52)            8            4
Technical Polymers Ticona .............      73        59          38           119           63
Performance Products ..................      41        33          22           (48)         (25)
                                          -----     -----         ---         -----          ---
Segment Total .........................     190       153         100           190          100
                                                                  ===                        ===
Other Activities ......................    (133)     (107)                      (75)
                                          -----     -----                     -----
Total Operating Profit ................      57        46                       115
                                          =====     =====                     =====

EARNINGS (LOSS) FROM CONTINUING
   OPERATIONS BEFORE TAX AND
      MINORITY INTERESTS
Chemical Products .....................     190       154          75           131           52
Acetate Products ......................     (93)      (75)        (37)           11            4
Technical Polymers Ticona .............     117        94          46           157           63
Performance Products ..................      40        32          16           (48)         (19)
                                          -----     -----         ---         -----          ---
Segment Total .........................     254       205         100           251          100
                                                                  ===                        ===
Other Activities ......................    (127)     (102)                      (72)
                                          -----     -----                     -----
Total Earnings from Continuing
   Operations Before Tax and Minority
      Interests .......................     127       103                       179
                                          =====     =====                     =====


                                                      YEARS ENDED DECEMBER 31,
                                          ---------------------------------------------------
                                                    2003                       2002
                                          ------------------------   ------------------------
                                                              (UNAUDITED)
                                          ---------------------------------------------------
                                                          % OF                       % OF
                                          (EURO) (3)   SEGMENTS(2)   (EURO) (3)   SEGMENTS(2)
                                          ----------   -----------   ----------   -----------
                                                    (IN MILLIONS, EXCEPT PERCENTAGES)

NET SALES
Chemical Products .....................     2,713           66         2,561           63
Acetate Products ......................       578           14           670           16
Technical Polymers Ticona .............       675           16           696           17
Performance Products ..................       150            4           161            4
                                            -----          ---         -----          ---
Segment Total .........................     4,116          100         4,088          100
                                                           ===                        ===
Other Activities ......................        44                         55
Intersegment Eliminations .............       (85)                       (79)
                                            -----                      -----
Total Net Sales .......................     4,075                      4,064
                                            =====                      =====

SPECIAL CHARGES
Chemical Products .....................         1          (17)            1          (25)
Acetate Products ......................        --           --            --           --
Technical Polymers Ticona:
   Insurance recoveries associated with
      plumbing cases ..................        94         n.m.            --           --
   Restructuring, impairment and other
      special charges, net ............       (17)        n.m.            (5)         n.m.
Performance Products:
   Sorbates antitrust matters .........       (84)        n.m.            --           --
                                            -----         ----         -----          ---
Segment Total .........................        (6)         100            (4)         100
                                                          ====                        ===
Other Activities ......................         1                          9
                                            -----                      -----
Total Special Charges .................        (5)                         5
                                            =====                      =====

OPERATING PROFIT (LOSS)
Chemical Products .....................       123           61           159           60
Acetate Products ......................        11            5            32           12
Technical Polymers Ticona .............       109           53            26           10
Performance Products ..................       (39)         (19)           48           18
                                            -----          ---         -----          ---
Segment Total .........................       204          100           265          100
                                                           ===                        ===
Other Activities ......................       (97)                       (82)
                                            -----                      -----
Total Operating Profit ................       107                        183
                                            =====                      =====

EARNINGS (LOSS) FROM CONTINUING
   OPERATIONS BEFORE TAX AND
      MINORITY INTERESTS
Chemical Products .....................       155           56           179           58
Acetate Products ......................        14            5            45           15
Technical Polymers Ticona .............       149           53            37           12
Performance Products ..................       (39)         (14)           48           15
                                            -----          ---         -----          ---
Segment Total .........................       279          100           309          100
                                                           ===                        ===
Other Activities ......................      (102)                      (119)
                                            -----                      -----
Total Earnings from Continuing
   Operations Before Tax and Minority
      Interests .......................       177                        190
                                            =====                      =====


(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. $1.2417 per
     (euro)1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

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

(3)  Derived from the accompanying Consolidated Financial Statements.

n.m. = not meaningful


                                       49



SELECTED DATA BY BUSINESS SEGMENT - (CONTINUED)



                                                        NINE MONTHS ENDED SEPTEMBER 30,
                                          ----------------------------------------------------------
                                                       2004                            2003
                                          --------------------------------   -----------------------
                                                                                   (UNAUDITED)
                                          ----------------------------------------------------------
                                                                 % OF                       % OF
                                           $(1)   (EURO)(3)   SEGMENTS(2)   (EURO)(3)    SEGMENTS(2)
                                          -----   ---------   -----------   ----------   -----------

STOCK APPRECIATION RIGHTS

Chemical Products .....................     --        --            --           (9)          45
Acetate Products ......................     (1)       (1)          100           (2)          10
Technical Polymers Ticona .............     --        --            --           (8)          40
Performance Products ..................     --        --            --           (1)           5
                                                     ---           ---          ---          ---
Segment Total .........................     (1)       (1)          100          (20)         100
                                                                   ===                       ===
Other Activities ......................     --        --                        (15)
Total Stock Appreciation Rights .......     (1)       (1)                       (35)
                                           ===       ===                        ===

DEPRECIATION & AMORTIZATION
Chemical Products .....................    120        97            55          104           55
Acetate Products ......................     45        36            20           39           21
Technical Polymers Ticona .............     50        40            23           39           21
Performance Products ..................      5         4             2            5            3
                                           ---       ---           ---          ---          ---
Segment Total .........................    220       177           100          187          100
                                                                   ===                       ===
Other Activities ......................      6         5                          5
                                           ---       ---                        ---
Total Depreciation and Amortization ...    226       182                        192
                                           ===       ===                        ===


(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. $1.2417 per
     (euro)1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

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

(3)  Derived from the accompanying Consolidated Financial Statements.


                                       50



Summary by Business Segment--Nine Months Ended September 30, 2004 Compared with
Nine Months Ended September 30, 2003

Chemical Products



                                                                  NINE MONTHS
                                                  NINE MONTHS        ENDED
                                                     ENDED       SEPTEMBER 30,
                                                 SEPTEMBER 30,        2003         NINE MONTHS     NINE MONTHS
in (euro) millions (except for percentages)          2004         (UNAUDITED)    CHANGE IN(EURO)   CHANGE IN %
--------------------------------------------------------------------------------------------------------------

Net sales                                            2,014           2,070             (56)             -3%
Net sales variance:
   Volume                                                6%
   Price                                                 3%
   Currency                                             -6%
   Other                                                -6%
Operating profit                                       140             111              29              26%
Operating margin                                       7.0%            5.4%
Special charges                                        (16)             --             (16)           n.m.
Earnings from continuing operations before tax
   and minority interests                              154             131              23              18%
Depreciation and amortization                           97             104              (7)             -7%
--------------------------------------------------------------------------------------------------------------


     Chemical Products' net sales for the nine months ended September 30, 2004
decreased by 3% to (euro)2,014 million compared to the same period last year as
increased volumes (+6%), and higher pricing (+3%) were offset by changes in the
composition of the segment (-6%) and unfavorable currency movements (-6%).

     The changes in the composition of the segment result from the transfer of
the European oxo business into a joint venture in the fourth quarter of 2003
(-4%) and a change in the structure of the business under which certain
acrylates products, which were formerly sold into the merchant market, are now
being sold under a contract manufacturing agreement (-2%). Only the margin
realized under the contract manufacturing agreement is reported in net sales.

     Volumes rose for major chemical products, particularly vinyl acetate
monomer, which increased due to stronger overall demand and a competitor outage.
Volumes also increased for polyvinyl alcohol in North America and Europe, and
emulsions in Europe. Pricing increased for most acetyl and acetyl derivative
products, particularly vinyl acetate monomer in all regions, following rising
costs for raw materials, particularly ethylene.

     Operating profit increased by 26% to (euro)140 million compared to the same
period in 2003. Higher volumes, higher selling prices, lower stock appreciation
rights expense and the absence of a loss from the European oxo business more
than offset increased raw material costs and higher special charges associated
with productivity initiatives.


                                       51



Acetate Products



                                                               NINE MONTHS
                                               NINE MONTHS        ENDED
                                                  ENDED       SEPTEMBER 30,
                                              SEPTEMBER 30,        2003         NINE MONTHS      NINE MONTHS
in (euro) millions (except for percentages)        2004        (UNAUDITED)    CHANGE IN (EURO)   CHANGE IN %
------------------------------------------------------------------------------------------------------------

Net sales                                           425             430               (5)             -1%
Net sales variance:
   Volume                                             8%
   Price                                              1%
   Currency                                         -10%
Operating profit (loss)                             (79)              8              (87)           >100%
Operating margin                                  -18.6%           1.9%
Special charges                                    (100)             --             (100)           n.m.
Earnings (loss) from continuing operations
   before tax and minority interests                (75)             11              (86)           >100%
Depreciation and amortization                        36              39               (3)             -8%
------------------------------------------------------------------------------------------------------------


     Acetate Products' net sales for the nine months ended September 30, 2004
decreased by 1% to (euro)425 million compared to the same period last year as
higher volumes (+8%) and slightly higher pricing (+1%) which were offset by
unfavorable currency movements (-10%).

     Volumes grew on higher tow demand in Asia, which was partly offset by lower
filament sales, primarily in Mexico. Average pricing increased for both tow and
filament.

     Operating profit declined to a loss of (euro)79 million from an operating
profit of (euro)8 million in the same period last year reflecting special
charges of (euro)100 million mainly associated with the planned consolidation of
tow production and the termination of filament production. Offsetting these
decreases were higher volumes and savings from productivity gains. In addition,
we recorded (euro)7 million of depreciation expense in the nine months ended
September 30, 2004 for asset retirement obligations associated with this
restructuring.


                                       52



Technical Polymers Ticona



                                                              NINE MONTHS
                                              NINE MONTHS        ENDED
                                                 ENDED       SEPTEMBER 30,
                                             SEPTEMBER 30,        2003         NINE MONTHS      NINE MONTHS
in (euro) millions(except for percentages)       2004         (UNAUDITED)    CHANGE IN (EURO)   CHANGE IN %
-----------------------------------------------------------------------------------------------------------

Net sales                                         539              517              22                4%
Net sales variance:
   Volume                                          14%
   Price                                           -5%
   Currency                                        -5%
Operating profit                                   59              119             (60)             -50%
Operating margin                                 10.9%            23.0%
Special charges:
   Insurance recoveries associated with
      plumbing cases                                3               94             (91)             -97%
   Restructuring, impairment and other
      special charges, net                         (6)              (3)             (3)             100%
Earnings (loss) from continuing operations
   before tax and minority interests               94              157             (63)             -40%
Depreciation and amortization                      40               39               1                3%
-----------------------------------------------------------------------------------------------------------


     Net sales for Ticona for the nine months ended September 30, 2004 increased
by 4% to (euro)539 million compared to the same period last year. Strong volume
increases (+14%) were partly offset by unfavorable currency effects (-5%) and a
decline in pricing (-5%).

     Volumes increased in most business lines, particularly in polyacetal,
Vectra liquid crystal polymers and GUR ultra high molecular weight polyethylene.
Polyacetal volumes grew on stronger sales in the medical and automotive
industries in North America while European sales benefited from greater demand
for uses in consumer products and the commercialization of new applications.
Volumes for Vectra rose in North America and Europe due to new commercial
applications, such as in household goods, and stronger sales to the
electrical/electronics industry. GUR volumes grew as a result of increased sales
for new specialty applications. Overall pricing declined due to changes in
product mix and ongoing competitive pricing pressure from Asian exports of
polyacetal into North America and Europe.

     Operating profit for the nine months ended September 30, 2004 decreased to
(euro)59 million from (euro)119 million as insurance recoveries relating to the
plumbing cases decreased significantly to (euro)3 million in 2004 compared to
(euro)94 million for the same period last year. Operating profit for the nine
months ended September 30, 2004 benefited from higher volumes, the favorable
effects from a build-up of inventory in anticipation of a plant maintenance
turnaround and lower average production costs for Vectra. These factors were
partly offset by lower pricing and higher hydrocarbon-based raw material costs.

     Earnings from continuing operations before tax and minority interests
decreased to (euro)94 million from (euro)157 million in the same period in 2003.
This decrease resulted primarily from the lower operating profit and interest
income relating to insurance recoveries, which were partly offset by improved
equity earnings from Asian and U.S. affiliates due to increased sales volumes.


                                       53



Performance Products



                                                                     NINE MONTHS
                                                     NINE MONTHS        ENDED
                                                        ENDED       SEPTEMBER 30,
                                                    SEPTEMBER 30,        2003          NINE MONTHS      NINE MONTHS
in (euro) millions(except for percentages)               2004        (UNAUDITED)    CHANGTE IN (EURO)   CHANGE IN %
-------------------------------------------------------------------------------------------------------------------

Net sales                                                111              117               (6)              -5%
Net sales variance:
   Volume                                                 12%
   Price                                                 -15%
   Currency                                               -2%
Operating profit (loss)                                   33              (48)              81            >100%
Operating margin                                        29.7%           -41.0%
Special charges:
   Sorbates antitrust matters                             --              (84)              84             -100%
   Restructuring, impairment and other special
      charges, net                                        --               --               --              n.m.
Earnings (loss) from continuing operations before
   tax and minority interests                             32              (48)              80             >100%
Depreciation and amortization                              4                5               (1)             -20%
-------------------------------------------------------------------------------------------------------------------


     Net sales in the nine months ended September 30, 2004 for the Performance
Products segment, which consists of the Nutrinova food ingredients business,
decreased by 5% to (euro) 111 million compared to the same period last year as
increased volumes (+12%) were offset by price decreases (-15%) and unfavorable
currency effects (-2%).

     Increased volumes for Sunett sweetener reflected strong growth from new and
existing applications in the U.S. and European beverage and confectionary
markets. Pricing for Sunett declined on lower unit selling prices associated
with higher volumes to major customers and the anticipated expiration of the
primary European and U.S. production patents in 2005.

     Pricing for sorbates, which had been under pressure from Asian producers,
began to stabilize, although worldwide overcapacity still prevailed in the
industry.

     Operating profit increased to (euro) 33 million compared to an operating
loss of (euro) 48 million for the same period last year, which included special
charges of (euro) 84 million related to antitrust actions in the sorbates
industry. Operating profit for the nine months ended September 30, 2004
benefited from strong volumes for Sunett which were offset by lower pricing for
Sunett and sorbates.

     Other Activities

     Other Activities primarily consists of corporate center costs, including
financing and certain administrative activities, and certain other operating
entities, including the captive insurance companies.

     Net sales for Other Activities increased by 6% to (euro) 34 million
compared to the same period last year, primarily due to higher third party
revenue earned by the captive insurance companies.

     Operating loss for the nine months ended September 30, 2004 increased to
(euro) 107 million compared to an operating loss of (euro) 75 million for the
same period last year. This increase was primarily due to special charges of
(euro) 23 million mainly related to advisory services associated with the tender
offer of (euro) 20 million as well higher employee benefit related costs
including severance and employee incentives. The operating loss for the nine
months ended September 30, 2003 included (euro) 15 million in expense for stock
appreciation rights.


                                       54



     Loss from continuing operations before tax and minority interests increased
to (euro) 102 million from (euro) 72 million for the same period last year. This
increase is primarily due to a larger operating loss and lower income of (euro)
10 million from the demutualization of an insurance provider.

SUMMARY OF CONSOLIDATED RESULTS - NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED
WITH NINE MONTHS ENDED SEPTEMBER 30, 2003

     Net Sales

     For the nine months ended September 30, 2004, net sales decreased to (euro)
3,051 million compared to (euro) 3,103 million for the same period in 2003.
Volume increases in all segments were offset by unfavorable currency effects
resulting mainly from the stronger euro versus the U.S. dollar, reductions due
to changes in the composition of the Chemical Products segment and slightly
lower pricing, primarily in the Ticona and Performance Products segments.

     The changes in the composition of the segment result from the transfer of
the European oxo business into a joint venture in the fourth quarter of 2003 and
a change in the structure of the business under which certain acrylates
products, which were formerly sold into the merchant market, are now being sold
under a contract manufacturing agreement. Only the margin realized under the
contract manufacturing agreement is reported in net sales.

     Cost of Sales

     Cost of sales decreased by (euro) 114 million to (euro) 2,478 million for
the nine months ended September 30, 2004 versus the comparable period last year.
Higher raw material costs were offset by favorable currency effects and
decreases due to changes in the composition of the Chemical Products segment.
Cost of sales for the nine months ended September 30, 2004 includes higher
depreciation expense of (euro) 10 million for asset retirement obligations
associated with the Edmonton production facility.

     Selling, General and Administrative Expenses

     Selling, general and administrative expense decreased by (euro) 15 million
to (euro) 330 million for the nine months ended September 30, 2004 compared to
the same period last year. This decrease was primarily due favorable currency
movements and (euro) 32 million of lower stock appreciation rights expense,
which were partially offset by higher employee benefit related costs including
severance and employee incentives.

     Special Charges

     Special charges include provisions for restructuring and other expenses and
income incurred outside the normal course of ongoing operations. Restructuring
provisions represent costs of severance and other benefit programs related to
major activities undertaken to fundamentally redesign business operations, as
well as costs and expenses 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.


                                       55



     The components of special charges for the nine months ended September 30,
2004 and 2003 were as follows:



                                                         NINE MONTHS       NINE MONTHS
                                                            ENDED             ENDED
                                                         SEPTEMBER 30,   SEPTEMBER 30,
                                                              2004            2003
                                                         -------------   -------------
                                                                          (UNAUDITED)
                                                         -----------------------------
                                                              (IN (EURO) MILLIONS)
                                                         -----------------------------

Employee termination benefits.........................         15               4
Plant/office closures.................................        100              --
Restructuring adjustments.............................          1               1
                                                              ---             ---
   Total Restructuring................................        116               5
Sorbates antitrust matters............................         --              85
Plumbing actions......................................         (3)            (94)
Asset impairments.....................................          8              --
Third-party reimbursements of restructuring charges...         --              --
Other.................................................         21              (3)
                                                              ---             ---
   Total Special Charges..............................        142              (7)
                                                              ---             ---


     Special charges increased to expense of (euro) 142 million for the nine
months ended September 30, 2004 from income of (euro) 7 million for the same
period last year. Special charges for the nine months ended September 30, 2004
largely consisted of asset impairments for the Acetate Products restructuring of
(euro) 100 million and advisory services associated with the tender offer of
(euro) 20 million, while special charges for the same period in 2003 resulted
mainly from income of (euro) 94 million from insurance recoveries, which were
largely offset by expenses of (euro) 84 million associated with antitrust
matters in the sorbates industry.

     Operating Profit

     Operating profit decreased by 60% to (euro) 46 million compared to the same
period last year. Operating profit for the nine months ended September 30, 2004
benefited from volume increases and (euro) 34 million of lower expense for stock
appreciation rights, which were offset by higher raw material costs, higher
special charges and slightly lower pricing.

     Equity in Net Earnings of Affiliates

     Equity in net earnings of affiliates rose by (euro) 12 million to (euro) 38
million for the nine months ended September 30, 2004 compared to the same period
last year. This increase primarily consisted of improved equity earnings from
Asian and U.S. affiliates, due to increased sales volumes. Cash distributions
received from equity affiliates were (euro) 20 million for the nine months ended
September 30, 2004 compared to (euro) 29 million in the same period of 2003.

     Interest Expense

     Interest expense decreased to (euro) 27 million for the nine months ended
September 30, 2004 from (euro) 32 million in the same period last year,
primarily due to lower average debt levels.

     Interest and other income, net

     Interest and other income, net decreased to (euro) 46 million for the nine
months ended September 30, 2004 from (euro) 70 million for the same period last
year, mainly due to lower interest income associated with insurance recoveries
of (euro) 15 million and lower income from the demutualization of an insurance
provider of (euro) 10 million. Dividend income from investments for the nine
months ended September 30, 2004 accounted for under the cost method remained
flat at (euro) 24 million compared to the same period last year.


                                       56



     Income Taxes

     Celanese recognized income tax expense of (euro) 191 million for the nine
months ended September 30, 2004 compared to (euro) 55 million for the same
period last year.

     The effective tax rate for Celanese for the nine months ended September 30,
2004 was 185 percent compared to 31 percent for the same period a year ago. This
adverse affect was primarily due to the recording of a full valuation allowance
of (euro) 144 million against the U.S. NOL carryforwards due to the acquisition
by BCP and related U.S. tax law and a full valuation allowance of (euro) 25
million applied against Canadian deferred tax assets.

     Discontinued Operations

     In September 2003, Celanese and Dow reached an agreement for Dow to
purchase the acrylates business of Celanese. This transaction was completed in
February 2004 and the sales price was (euro) 111 million, which resulted in gain
of (euro) 10 million. Dow acquired Celanese's acrylates business line, including
inventory, intellectual property and technology for crude acrylic acid, glacial
acrylic acid, ethyl acrylate, butyl acrylate, methyl acrylate and 2-ethylhexyl
acrylate, as well as acrylates production assets at the Clear Lake, Texas
facility. The acrylates business was part of Celanese's former Chemical
Intermediates segment. In related agreements, Celanese provides certain contract
manufacturing services to Dow, and Dow supplies acrylates to Celanese for use in
its emulsions production. Simultaneous with the sale, Celanese repaid an
unrelated obligation of U.S. (euro) 76 million to Dow. As a result of this
transaction, the assets, liabilities, revenues and expenses related to the
acrylates product lines at the Clear Lake, Texas, facility are reflected as a
component of discontinued operations in the consolidated financial statements in
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets.

     In December 2003, the Ticona segment completed the sale of its nylon
business line to BASF. Ticona received cash proceeds of (euro) 8 million and
recorded a gain of (euro) 2 million.

     The Company recorded a tax benefit of (euro) 12 million associated with
discontinued operations for the nine months ended September 30, 2004, primarily
due to the utilization of a capital loss carryover benefit that had been
previously subject to a valuation allowance.


                                       57



     The following table summarizes the results of the discontinued operations
for the nine months ended September 30, 2004 and 2003.

                                                           NET SALES
                                                     --------------------
                                                      NINE MONTHS ENDED
                                                       SEPTEMBER 30,
                                                     --------------------
                                                      2004       2003
                                                      ----       ----
                                                             (UNAUDITED)
                                                     --------------------
                                                     (IN (EURO) MILLIONS)
                                                     --------------------
Discontinued operations of Chemical Products......      18       154
Discontinued operations of Performance Products...      --        --
Discontinued operations of Ticona.................       1        31
                                                       ---        --
Total discontinued operations.....................      19       185
                                                       ===       ===

                                                     OPERATING PROFIT (LOSS)
                                                     -----------------------
                                                        NINE MONTHS ENDED
                                                          SEPTEMBER 30,
                                                     -----------------------
                                                        2004       2003
                                                        ----       ----
                                                               (UNAUDITED)
                                                     -----------------------
                                                       (IN (EURO) MILLIONS)
                                                     -----------------------
Discontinued operations of Chemical Products......       (4)        (7)
Discontinued operations of Performance Products...       --         --
Discontinued operations of Ticona.................       --          1
                                                        ---        ---
Total discontinued operations.....................       (4)        (6)
                                                        ===        ===

     Net Earnings (Loss)

     As a result of the factors mentioned above, the net earnings (loss) of
Celanese declined to a net loss of (euro) 70 million or (euro) 1.42 per, basic
and diluted, share for the nine months ended September 30, 2004 from net
earnings of (euro) 116 million or (euro) 2.34 per, basic and diluted, share for
the same period last year.


                                       58



SUMMARY BY BUSINESS SEGMENT - 2003 COMPARED WITH 2002

     Chemical Products



                                              YEARS ENDED DECEMBER 31,
                                              ------------------------
in (euro) millions (except for percentages)          2003    2002        CHANGE IN (EURO)   CHANGE IN %
-------------------------------------------------------------------------------------------------------

Net sales                                           2,713   2,561              152                6%
Net sales variance:
   Volume                                               1%
   Price                                                9%
   Currency                                           -13%
   Other                                                9%
Operating profit                                      123     159              (36)             -23%
Operating margin                                      4.5%    6.2%
Special charges                                         1       1               --                0%
Earnings from continuing operations before
   tax and minority interests                         155     179              (24)             -13%
Depreciation and amortization                         139     139               --                0%
-------------------------------------------------------------------------------------------------------


     Net sales for the Chemical Products segment rose 6% to (euro) 2,713 million
in 2003 compared to (euro) 2,561 million in 2002, due to the full year effect of
the emulsions business acquired at the end of 2002 (+10%), higher selling prices
(+9%) and increased volumes (+1%). These increases were partly offset by
unfavorable currency effects (-13%) and the transfer of the European oxo
business to a joint venture in the fourth quarter of 2003 (-1%).

     Compared to 2002, selling prices in 2003 increased for major products,
including acetic acid and vinyl acetate monomer, following the substantial rise
in raw material costs, particularly natural gas, ethylene, and propylene.
Volumes rose for acetic acid, particularly in Asia, as volumes were comparably
higher due, in part, to an interruption in production in 2002. Vinyl acetate
monomer volumes were higher in most regions, partly due to competitor outages,
while volumes declined for polyvinyl alcohol in Asia and specialties mainly in
Europe due to competitive pricing.

     Chemical Products had income from special charges of (euro) 1 million for
both 2003 and 2002. This income relates to favorable adjustments to previously
recorded restructuring reserves that more than offset employee severance costs
related to production facility closures.

     Operating profit decreased to (euro) 123 million in 2003 from (euro) 159
million in 2002. The contribution from the emulsions business and cost
reductions were outweighed by higher energy costs, an increase in stock
appreciation rights expense of (euro) 10 million and unfavorable currency
movements. Termination benefit expenses of (euro) 12 million were recorded in
cost of sales, primarily in the fourth quarter of 2003, related to the
streamlining of manufacturing operations and administrative functions. Overall
in 2003, increased selling prices offset higher raw material costs, although
pricing outpaced raw material costs in the first half of the year and lagged in
the second half.

     Operating profit as a percentage of sales declined to 4.5% in 2003 as
compared to 6.2% in 2002.

     Earnings from continuing operations before tax and minority interests
declined to (euro) 155 million in 2003 compared to (euro) 179 million in 2002.
This decline resulted from lower operating profit, partially offset by higher
dividends from the Saudi Arabian methanol investment, primarily due to higher
methanol pricing.


                                       59



     Acetate Products



                                              YEARS ENDED DECEMBER 31,
                                              ------------------------
in (euro) millions (except for percentages)         2003   2002          CHANGE IN (EURO)   CHANGE IN %
-------------------------------------------------------------------------------------------------------

Net sales                                            578    670                (92)             -14%
Net sales variance:
   Volume                                              1%
   Price                                               2%
   Currency                                          -17%
Operating profit                                      11     32                (21)             -66%
Operating margin                                     1.9%   4.8%
Special charges                                       --     --                 --             n.m.
Earnings from continuing operations before
   tax and minority interests                         14     45                (31)             -69%
Depreciation and amortization                         59     57                  2                4%
-------------------------------------------------------------------------------------------------------


     Net sales for the Acetate Products segment decreased by 14% to (euro) 578
million in 2003 from (euro) 670 million in 2002 largely due to unfavorable
currency movements (-17%), which were partly offset by higher pricing (+2%) and
higher volumes (+1%).

     Average pricing rose in 2003 as higher tow prices offset slightly lower
filament prices. Volumes grew as higher demand for filament and flake more than
offset slightly lower tow volumes, primarily in Europe and Africa. Despite a
long-term trend of declining global demand for filament, volumes improved mainly
due to higher demand from the U.S. fashion industry. Volumes of acetate flake, a
primary raw material in acetate filament and tow production, also increased due
to higher opportunistic sales in the merchant market.

     Operating profit for the Acetate Products segment declined from (euro) 32
million in 2002 to (euro) 11 million in 2003 as higher pricing and volumes, as
well as productivity gains, only partially offset higher raw material and energy
prices as well as unfavorable currency movements. The segment also incurred
costs for transitioning to new wood pulp suppliers as a primary supplier closed
its U.S. facility in 2003. Celanese assessed its worldwide acetate production
capacity and it was probable that the Company will close certain facilities in
the latter half of this decade. As a result of this assessment and in accordance
with SFAS No. 143, the Acetate Products segment recorded a charge of (euro) 7
million, included within depreciation expense, related to these potential asset
retirement obligations.

     Operating profit as a percentage of sales declined to 1.9% in 2003 as
compared to 4.8% in 2002.

     Earnings from continuing operations before tax and minority interests
declined to (euro) 14 million in 2003 compared to (euro) 45 million in 2002.
This decline resulted from lower operating profit and lower dividend income from
investments in China where earnings are being reinvested for capacity
expansions.


                                       60



     Technical Polymers Ticona



                                              YEARS ENDED DECEMBER 31,
                                              ------------------------
in (euro) millions (except for percentages)         2003   2002          CHANGE IN (EURO)   CHANGE IN %
-------------------------------------------------------------------------------------------------------

Net sales                                            675    696                (21)             -3%
Net sales variance:
   Volume                                             10%
   Price                                              -3%
   Currency                                          -10%
Operating profit                                     109     26                 83            >100%
Operating margin                                    16.1%   3.7%
Special charges                                       77     (5)                82            >100%
Earnings from continuing operations before
   tax and minority interests                        149     37                112            >100%
Depreciation and amortization                         50     55                 (5)             -9%
-------------------------------------------------------------------------------------------------------


     Net sales for the Ticona segment decreased by 3% to (euro) 675 million in
2003 from (euro) 696 million in 2002 as higher volumes (+10%) did not offset
unfavorable currency movements (-10%) and lower selling prices (-3%).

     Volumes increased in most business lines, particularly in polyacetal and
GUR ultra high molecular weight polyethylene. The global volume growth in
polyacetals resulted from sales to new customers and end-uses. Volumes for GUR
increased as the result of the commercialization of new applications in North
America and Europe, as well as the exit of a major competitor in North America.
Pricing declined on a higher percentage of sales from lower priced products and
increased competitive pressure from Asian imports of polyacetal into North
America.

     Ticona recorded income from special charges of (euro) 77 million in 2003
compared to expense of (euro) 5 million in 2002. The income in 2003 primarily
resulted from insurance recoveries of (euro) 94 million associated with the
plumbing cases, which was partially offset by restructuring charges for
organizational redesign costs of (euro) 10 million and the closure of the
Telford, UK, compounding facility of (euro) 7 million. The 2002 expense resulted
from restructuring costs associated with the consolidation of manufacturing
operations in Europe and the United States.

     Operating profit increased to (euro) 109 million in 2003 versus (euro) 26
million in 2002. Income from insurance recoveries, higher volumes, and reduced
spending more than offset higher raw material and energy costs, lower pricing,
and higher expense associated with stock appreciation rights of (euro) 10
million. Ticona continued to incur significant market development costs for
cyclo-olefin copolymers in 2003. Termination benefit expenses of (euro) 8
million were recorded in cost of sales, primarily in the fourth quarter of 2003,
related to the streamlining of manufacturing operations and administrative
functions.

     Operating profit as a percentage of sales increased from 3.7% in 2002 to
16.1% in 2003, which included the favorable effects of (euro) 94 million of
income associated with the plumbing cases.

     Earnings from continuing operations before tax and minority interests
increased to (euro) 149 million in 2003 compared to (euro) 37 million in 2002.
This increase resulted from higher operating profit and higher equity earnings
from the Polyplastics investment, due to growth in the Chinese and Taiwanese
economies in 2003, as well as interest income from insurance recoveries.


                                       61



     Performance Products



                                             YEARS ENDED DECEMBER 31,
                                             ------------------------
in (euro) millions (except for percentages)      2003         2002     CHANGE IN (EURO)  CHANGE IN %
----------------------------------------------------------------------------------------------------

Net sales                                         150          161           (11)             -7%
Net sales variance:
----------------------------------------------------------------------------------------------------
   Volume                                           5%
   Price                                          -12%
----------------------------------------------------------------------------------------------------
Operating profit (loss)                           (39)          48           (87)           >100%
Operating margin                                -26.0%        29.8%
Special charges                                   (84)          --           (84)           n.m.
Earnings (loss) from continuing operations
   before tax and minority interests              (39)          48           (87)           >100%
Depreciation and amortization                       6            6            --               0%
----------------------------------------------------------------------------------------------------


     Net sales for the Performance Products segment, which consists of the
Nutrinova food ingredients business, decreased by 7% to (euro) 150 million in
2003 from (euro) 161 million in 2002 due to price decreases (-12%), partially
offset by increased volumes (+5%).

     Pricing for Sunett(R) sweetener declined on lower unit selling prices
associated with higher volumes to major customers and the anticipated expiration
of the European and U.S. production patents in 2005. Increased Sunett volumes
reflected strong growth from new applications in the U.S. and European beverage
and confectionary markets. In sorbates, pricing and volume pressure from Asian
producers intensified during 2003 due to worldwide overcapacity.

     Performance Products recorded special charges of (euro) 84 million in 2003,
related to a decision by the European Commission on antitrust matters in the
sorbates industry.

     Operating profit and earnings (loss) from continuing operations before tax
and minority interests declined from (euro) 48 million in 2002 to a loss of
(euro) 39 million in 2003. This was due to special charges and lower pricing
slightly offset by higher Sunett volumes, cost reductions and increased
productivity.

     Other Activities

     Net sales for Other Activities decreased by 20% to (euro) 44 million in
2003 from (euro) 55 million in 2002, primarily due to unfavorable currency
movements and slightly lower third party revenue earned by the captive insurance
companies.

     Other Activities recorded (euro) 1 million of income in special charges in
2003 compared to (euro) 9 million of income in 2002. The (euro) 1 million
represented higher than expected collections of a note receivable. The (euro) 9
million of income in 2002 related to a reduction in environmental reserves due
to a settlement of obligations associated with former Hoechst entities.

     The operating loss of Other Activities increased to (euro) 97 million in
2003 compared to (euro) 82 million in 2002. This increase was primarily the
result of higher stock appreciation rights expense of (euro) 22 million and
lower income from special charges, offset by (euro) 18 million of increased
income from the captive insurance companies mainly due to a reduction in loss
reserves resulting from expired policies and actuarial revaluations.

     Earnings (loss) from continuing operations before tax and minority
interests improved to a loss of (euro) 102 million in 2003 compared to a loss of
(euro) 119 million in 2002. This improvement resulted from lower interest
expense and higher interest and other income, net partially offset by higher
operating losses. Lower interest expense is primarily due to lower interest
rates and currency translation effects as well as lower average debt levels.
Higher interest and other income, net resulted primarily from income of (euro)
16 million from the demutualization of an insurance provider and the gain on
sale of investments of (euro) 4 million, partially offset by expense of (euro)
12 million related to the unfavorable currency effects on the unhedged position
of intercompany net receivables denominated in U.S. dollars.


                                       62



SUMMARY OF CONSOLIDATED RESULTS - 2003 COMPARED WITH 2002

     Net Sales

     Net sales increased by (euro) 11 million to (euro) 4,075 million in 2003 as
compared to (euro) 4,064 million in 2002 due primarily to the full year effect
of the emulsions business acquired at the end of 2002 as well as higher selling
prices and volumes. These effects were partially offset by unfavorable currency
movements resulting from the strengthening of the euro versus the U.S. dollar.
Decreases in the Acetate Products, Ticona, and Performance Products segments
were partially offset by an increase in the Chemical Products segment.

     Cost of Sales

     Cost of sales increased by 2% to (euro) 3,435 million in 2003 compared with
(euro) 3,359 million in 2002. Cost of sales as a percentage of net sales also
increased to 84% in 2003 from 83% in 2002, reflecting significantly higher raw
material and energy costs, partly offset by increased selling prices primarily
in the Chemical Products segment.

     Selling, General and Administrative Expenses

     Selling, general and administrative expenses decreased by 5% to (euro) 451
million in 2003 from (euro) 474 million in 2002 primarily due to currency
effects and cost reduction efforts, partially offset by a (euro) 44 million
increase in expenses for stock appreciation rights, as well as the inclusion of
the emulsions business.

     Research and Development Expenses

     Research and development expenses increased by 14% to (euro) 79 million in
2003 from (euro) 69 million in 2002. This increase resulted primarily from the
inclusion of the emulsions business and expiration of cost sharing arrangements
at Celanese Ventures during 2002. Research and development expenses as a
percentage of sales remained flat at 2% for both 2003 and 2002.

     Special Charges

     The components of special charges for the years ended December 31, 2003 and
2002 were as follows:

                                                        YEARS ENDED DECEMBER 31,
                                                        ------------------------
                                                              2003   2002
                                                              ----   ----
                                                          (IN (EURO) MILLIONS)
                                                          --------------------
Employee termination benefits.........................          16      9
Plant/office closures.................................           6      6
Restructuring adjustments.............................          (6)   (10)
                                                               ---    ---
   Total Restructuring................................          16      5
Sorbates antitrust matters............................          84     --
Plumbing actions......................................         (94)    --
Asset impairments.....................................          --     --
Third-party reimbursements of restructuring charges...          --     (1)
Other.................................................          (1)    (9)
                                                               ---    ---
   Total Special Charges..............................           5     (5)
                                                               ===    ===


                                       63



     In 2003, Celanese recorded expense of (euro) 5 million in special charges,
which consisted of (euro) 22 million of restructuring charges, (euro) 6 million
of income from favorable adjustments to restructuring reserves that were
recorded previously, and (euro) 11 million of income from other special charges.
The (euro) 22 million of additions to the restructuring reserve included
employee severance costs of (euro) 16 million and plant and office closure costs
of (euro) 6 million. Within other special charges there was income of (euro) 94
million related to insurance recoveries associated with the plumbing cases,
partially offset by (euro) 84 million of expenses for antitrust matters in the
sorbates industry, primarily related to a decision by the European Commission.

     In 2003, the Chemical Products segment recorded employee severance charges
of (euro) 4 million, which primarily related to the shutdown of an obsolete
synthesis gas unit in Germany.

     In 2003, Ticona commenced redesign of its operations. These plans included
a decision to sell the Summit, New Jersey, site and to relocate administrative
and research and development activities to the existing Ticona site in Florence,
Kentucky, in 2004. As a result of this decision, Celanese recorded termination
benefit expenses of (euro) 4 million in 2003. In addition to the relocation in
the United States, Ticona has streamlined its operations in Germany, primarily
through offering employees early retirement benefits under an existing employee
benefit arrangement. As a result of this arrangement, Ticona recorded a charge
of (euro) 6 million in 2003.

     Also in 2003, based on a 2002 restructuring initiative to concentrate its
European manufacturing operations in Germany, Ticona ceased its manufacturing
operations in Telford, United Kingdom. This resulted in contract termination
costs and asset impairments totaling (euro) 6 million and employee severance
costs of (euro) 1 million in 2003. Through December 31, 2003, the total costs of
the Telford shutdown through 2003 were (euro) 11 million.

     The (euro) 6 million of income from favorable adjustments of previously
recorded restructuring reserves consisted of a (euro) 1 million adjustment to
the 2002 reserves, a (euro) 4 million adjustment to the 2001 reserves and a
(euro) 1 million adjustment to the 1999 reserves. The adjustment to the 2002
reserve related to lower than expected costs related to the demolition of the
GUR Bayport facility. The adjustment to the 2001 reserve was primarily due to
the lower than expected decommissioning costs of the Mexican production
facility. The adjustment to the 1999 reserve was due to lower than expected
payments related to the closure of a former administrative facility in the
United States.

     In 2002, Celanese recorded income from special charges of (euro) 5 million,
which consisted of (euro) 15 million of restructuring charges, (euro) 10 million
of income from favorable adjustments to previously recorded restructuring
reserves, (euro) 1 million of income from reimbursements from third party site
partners related to prior year initiatives, and (euro) 9 million of income from
other special charges. The (euro) 15 million of restructuring charges included
employee severance costs of (euro) 9 million and plant and office closure costs
of (euro) 6 million.

     Project Focus, initiated in early 2001, set goals to reduce trade working
capital, limit capital expenditures and improve earnings before interest, taxes,
depreciation and amortization from programs to increase efficiency. Project
Forward was announced in August 2001 and initiated additional restructuring and
other measures to reduce costs and increase profitability. During 2002, Celanese
recorded employee severance charges of (euro) 9 million, of which (euro) 4
million related to adjustments to the 2001 forward initiatives and (euro) 4
million for streamlining efforts of production facilities in Germany and the
United States, and (euro) 1 million for employee severance costs in the
polyvinyl alcohol business.

     Ticona recorded asset impairments of (euro) 4 million in 2002 related to a
decision in 2002 to shutdown operations in Telford, United Kingdom in 2003. In
addition, with the construction of a new and expanded GUR plant in Bishop,
Texas, the GUR operations in Bayport, Texas, were transferred to a new facility.
Decommissioning and demolition costs associated with the Bayport shutdown were
(euro) 2 million.

     The (euro) 10 million of favorable adjustments of previously recorded
restructuring reserves consisted of an (euro) 8 million adjustment to the 2001
reserves and a (euro) 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 Chemical Products production facility in Knapsack,
Germany. The other special charges income of (euro) 9 million related to a
reduction in reserves associated with settlements of environmental
indemnification obligations associated with former Hoechst entities.


                                       64



     Foreign Exchange Gain (Loss)

     Foreign exchange gain (loss) decreased to a loss of (euro) 3 million in
2003 from a gain of (euro) 4 million in 2002. This change is primarily
attributable to the strengthening of the Mexican peso and Canadian dollar
against the U.S. dollar.

     Operating Profit

     Operating profit declined to (euro) 107 million in 2003 compared to (euro)
183 million in 2002. The favorable effects of higher selling prices primarily in
the Chemical Products segment, cost reductions, and income from insurance
recoveries of (euro) 94 million in the Ticona segment, were offset by expenses
of (euro) 84 million in the Performance Products segment related to antitrust
matters, (euro) 10 million of organizational redesign costs at Ticona, increased
stock appreciation rights expense, higher raw material and energy costs in most
segments as well as unfavorable currency movements. Stock appreciation rights
expense for 2003 was (euro) 50 million compared to (euro) 4 million in 2002.
Celanese streamlined its manufacturing operations, mainly in the Chemical
Products segment, and, as a result, recorded termination benefit expenses, in
cost of sales, of (euro) 22 million, primarily in the fourth quarter of 2003.

     Equity in Net Earnings of Affiliates

     Equity in net earnings of affiliates increased to (euro) 31 million in 2003
from (euro) 22 million in 2002. This increase was mainly attributable to an
increase in the earnings from Polyplastics, an investment held by the Ticona
segment, partly due to growth in the Chinese and Taiwanese economies in 2003.

     Interest Expense

     Interest expense decreased by 27% to (euro) 43 million in 2003 from (euro)
59 million in 2002. This decrease is primarily related to lower interest rates
and currency translation effects, as well as lower average debt levels.

     Interest and Other Income, Net

     Interest and other income, net increased to (euro) 82 million in 2003 from
(euro) 44 million in 2002, mainly due to interest of (euro) 18 million on
insurance recoveries in the Ticona segment and other income of (euro) 16 million
resulting from the demutualization of an insurance provider. These increases
were partially offset by expense of (euro) 12 million related to the unfavorable
currency effects on the unhedged position of intercompany net receivables
denominated in U.S. dollars. Investments accounted for under the cost method
contributed dividend income of (euro) 52 million and (euro) 41 million in 2003
and 2002, respectively. The increase in 2003 primarily resulted from higher
dividends from the Saudi Arabian methanol investment on higher methanol pricing,
which were slightly offset by lower dividend income from the Acetate Products
investments in China, where earnings are being reinvested for capacity
expansions.

     Income Taxes

     Celanese recognized income tax expense of (euro) 48 million in 2003
compared to (euro) 59 million in 2002.

     The effective tax rate for Celanese in 2003 was 27 percent compared to 31
percent in 2002. In comparison to the German statutory rate, the 2003 effective
tax rate was favorably affected by unrepatriated low-taxed earnings, favorable
settlement of prior year (1996) taxes in the U.S., equity earnings from
Polyplastics, which are excluded from U.S. taxable income, and utilization of a
U.S. capital loss carryforward that had been subject to a valuation allowance.
The effective tax rate was unfavorably affected in 2003 by dividend
distributions from subsidiaries and writedowns of certain German corporate and
trade tax benefits related to prior years.

     In comparison to the German statutory rate, the 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.


                                       65



     Discontinued Operations for the Years Ended December 31, 2003 and 2002

     In 2003, Celanese recorded (euro) 2 million in losses from operations of
discontinued operations related to the acrylates and nylon business
divestitures. In 2003, Celanese also recorded adjustments related to prior year
discontinued operations representing a gain of (euro) 4 million.

     In December 2002, Celanese completed the sale of Trespaphan, a global
oriented polypropylene ("OPP") film business, to a consortium consisting of
Dor-Moplefan Group and Bain Capital, Inc. for a value of (euro) 209 million. Net
of the purchase price adjustments of (euro) 19 million and the repayment of
(euro) 78 million in intercompany debt that Trespaphan owed Celanese, Celanese
received net proceeds of (euro) 112 million. Trespaphan was formerly part of
Celanese's Performance Products segment.

     During 2002, Celanese sold its global allylamines and U.S. alkylamines
businesses to U.S. Amines Ltd. These businesses were part of Celanese's former
Chemical Intermediates segment.

     In 2002, Celanese received net proceeds of (euro) 123 million and recorded
a pre-tax gain of (euro) 14 million on the disposal of discontinued operations
relating to these divestitures. Pre-tax earnings from operations of discontinued
operations in 2002 were (euro) 1 million. Celanese recognized a tax benefit of
(euro) 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, 2001 and 2000.
Since this tax benefit related to an entity solely engaged in a business
designated as discontinued operations, this tax benefit has been correspondingly
included in earnings (loss) from discontinued operations.

     The following table summarizes the results of the discontinued operations
for the years ended December 31, 2003 and 2002.

                                                             NET SALES
                                                      ------------------------
                                                      YEARS ENDED DECEMBER 31,
                                                      ------------------------
                                                             2003   2002
                                                             ----   ----
                                                        (IN (EURO) MILLIONS)
                                                        --------------------
Discontinued operations of Chemical Products.......           208    262
Discontinued operations of Performance Products....            --    273
Discontinued operations of Ticona..................            40     61
                                                              ---    ---
Total discontinued operations......................           248    596
                                                              ===    ===

                                                       OPERATING PROFIT (LOSS)
                                                      ------------------------
                                                      YEARS ENDED DECEMBER 31,
                                                      ------------------------
                                                             2003   2002
                                                             ----   ----
                                                        (IN (EURO) MILLIONS)
                                                        --------------------
Discontinued operations of Chemical Products.......            (2)   (54)
Discontinued operations of Performance Products....            --     10
Discontinued operations of Ticona..................            --     (1)
                                                              ---    ---
Total discontinued operations......................            (2)   (45)
                                                              ===    ===


                                       66



     Cumulative Effect of Changes in Accounting Principles

     Celanese recorded (euro)1 million in a cumulative effect of changes in
accounting principles, net of tax, on January 1, 2003, related to the adoption
of SFAS 143. Celanese recognized transition amounts for existing asset
retirement obligation liabilities, associated capitalized costs and accumulated
depreciation. The ongoing expense on an annual basis resulting from the initial
adoption of SFAS No. 143 is not material.

     In 2002, Celanese recorded income of (euro)19 million for the cumulative
effect of two changes in accounting principles, net of tax of (euro)5 million.
The adoption of SFAS No. 142, Goodwill and Other Intangible Assets, in 2002
resulted in income of (euro)10 million ((euro)0.20 per share), 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 income (euro)9 million ((euro)0.18
per share), net of taxes of (euro)5 million, was recorded in 2002.

     Net Earnings

     As a result of the factors mentioned above, the net earnings of Celanese
decreased by (euro)43 million to net earnings of (euro)132 million or (euro)2.67
per share in 2003 compared to (euro)175 million or (euro)3.48 per share in 2002.

LIQUIDITY AND CAPITAL RESOURCES

     Cash Flows

     NET CASH PROVIDED BY OPERATING ACTIVITIES

     Net cash provided by operating activities was (euro)29 million and
(euro)204 million for the nine months ended September 30, 2004 and 2003,
respectively. Net cash provided by operating activities was (euro)347 million
and (euro)382 million for the years ended December 31, 2003 and 2002,
respectively.

     Cash flow from operating activities decreased to a cash inflow of (euro)29
million for the nine months ended September 30, 2004 compared to a cash inflow
of (euro)204 million for the same period in 2003. This decrease primarily
resulted from the payment of a (euro)76 million obligation to a third party in
the nine months ended September 30, 2004, a net loss of (euro)70 million for the
nine months ended September 30 2004, as well as payments of (euro)48 million
associated with the exercising of stock appreciation rights for the nine months
ended September 30, 2004. Additionally, pension contributions increased by
(euro)36 million to (euro)129 million compared to the same period last year.
These factors were partly offset by a decline in payments associated with income
taxes, bonuses and restructuring as well as lower cash consumed through changes
in inventory and trade payables. The hedging of foreign currency net
receivables, primarily intercompany, resulted in a (euro)13 million cash inflow
in the first nine months of 2004 compared to a (euro)120 million cash inflow in
the first nine months of 2003.

     Net cash provided by operating activities decreased by (euro)35 million to
(euro)347 million in 2003 as compared to 2002 primarily due to higher net taxes
paid of (euro)118 million and lower dividends from equity investments of
(euro)48 million largely offset by insurance recoveries of (euro)120 million. In
addition, higher contributions were made to our U.S. qualified defined benefit
pension plan of (euro)115 million in 2003 compared to (euro)101 million in 2002.
The hedging activity of foreign currency denominated intercompany net
receivables served to partially offset unfavorable currency effects on net
earnings of (euro)135 million and resulted in a (euro)160 million cash inflow in
2003 compared to (euro)100 million in 2002 due to the timing of settlements of
these contracts.

     NET CASH USED IN INVESTING ACTIVITIES

     Net cash used in investing activities was (euro)25 million and (euro)159
million for the nine months ended September 30, 2004 and 2003, respectively. Net
cash used in investing activities was (euro)239 million and (euro)145 million
for the years ended December 31, 2003 and 2002, respectively.

     Net cash from investing activities decreased to a cash outflow of (euro)25
million for the nine months ended September 30, 2004 compared to a cash outflow
of (euro)159 million for the same period in 2003. The decreased cash


                                       67



outflow primarily resulted from the receipt of (euro)111 million associated with
the sale of the acrylates business as well as lower net purchases of marketable
securities. Capital expenditures on property, plant and equipment increased
slightly to (euro)123 million for the nine months ended September 30, 2004
compared to (euro)120 million in the same period in the prior year. The increase
was driven by higher expenditures within the Ticona segment for an expansion of
the polyacetal plant in Bishop, Texas, and the construction of a research and
development and administrative building in Florence, Kentucky.

     The increase in cash outflows of (euro)94 million in 2003 compared to 2002
is mainly due to lower proceeds from disposal of discontinued operations of
(euro)193 million and the receipt of (euro)41 million in returns of capital from
investments in non-consolidated InfraServ companies in 2002. This increase in
cash outflow for 2003 was partially offset by a (euro)125 million cash outflow
for the 2002 purchase of the net assets of the emulsions businesses.
Additionally, net cash outflows increased by (euro)36 million related to higher
net purchases of marketable securities.

     Capital expenditures decreased by (euro)29 million to (euro)185 million in
2003, primarily due to foreign currency effects. Spending in 2003 primarily
related to the completion of a production facility for synthesis gas, a primary
raw material at the Oberhausen site in Germany, major replacements of equipment,
capacity expansions, major investments to reduce future operating costs,
environmental, health and safety initiatives and the integration of a
Company-wide SAP platform. The spending in 2002 included the start of
construction of the synthesis gas production facility at the Oberhausen site. 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 was built to supply the projected long-term
demand of the telecommunications industry and to develop and grow emerging
markets.

     NET CASH PROVIDED USED IN FINANCING ACTIVITIES

     Net cash provided by financing activities was (euro)102 million for the
nine months ended September 30, 2004. Net cash used in financing activities was
(euro)122 million for the nine months ended September 30, 2003. Net cash used in
financing activities was (euro)99 million and (euro)156 million for the years
ended December 31, 2003 and 2002, respectively.

     Net cash from financing activities increased to a cash inflow of (euro)102
million for the nine months ended September 30, 2004 compared to a cash outflow
of (euro)122 million for the same period in 2003. The increased cash inflow
primarily reflects higher net proceeds from borrowings of (euro)168 million
primarily to prefund pension obligations.

     Net cash used in financing activities declined by (euro)57 million to an
outflow of (euro)99 million in 2003 compared to 2002. This decrease is primarily
related to lower net payments of short-term borrowings of (euro)137 million,
offset by net payments of long-term debt in 2003 of (euro)46 million. In
addition, in 2003, Celanese paid a cash dividend of (euro)22 million, (euro)0.44
per share, and repurchased 749,848 of its shares, to be held in treasury, for
approximately (euro)14 million.

     Net cash used in financing activities in 2002 was primarily due to net debt
repayments aggregating (euro)150 million. In addition, Celanese repurchased
284,798 of its shares, to be held in treasury, for approximately (euro)6
million.

Liquidity

     Historically, the primary source of liquidity has been cash generated from
operations, which included cash inflows from currency hedging activities. The
primary liquidity requirements were for capital expenditures, working capital,
pension contributions and investments. Subsequent to the Recent Restructuring,
our primary sources of liquidity will continue to be cash generated from
operations, cash pooling with non-consolidated affiliates and interest income
from notes receivable from non-consolidated affiliates.

     We believe we will have available resources to meet both our short-term and
long-term liquidity requirements. If our cash flow from operations is
insufficient to fund our obligations, we may be forced to use other means
available to us, such as reducing or delaying capital expenditures, seeking
additional capital or requiring prepayment of affiliate notes.


                                       68



     In connection with the acquisition, CAC became a party to credit facilities
whereby substantially all of the assets of CAC and its U.S. subsidiaries, as
well as 65% of the shares of foreign subsidiaries directly owned by CAC are
pledged and/or mortgaged as collateral to third party lenders. CAC and its U.S.
subsidiaries have access to approximately $608 million ((euro)490 million) under
these credit facilities. CAC also borrowed $359 million ((euro)289 million) from
BCP Caylux, a parent of BCP, at a variable rate, a portion of which was used to
repay $175 million ((euro)140 million) of debt, scheduled to mature in 2005 and
2008 and (euro)48 million of additional debt scheduled to mature in 2009. The
$359 million ((euro)289 million) from BCP Caylux was also used to prefund
pension obligations. Celanese cancelled its committed commercial paper backup
facilities and revolving credit lines. As of September 30, 2004, approximately
94% of the long-term borrowings above are denominated in U.S. dollars, with the
remaining amounts denominated in euros.

     As of September 30, 2004, Celanese had (euro)587 million of total debt, of
which (euro)102 million is due within one year. Total debt includes (euro)289
million due to BCP Caylux. As a result of the Recent Restructuring, CAC is no
longer a wholly owned subsidiary of Celanese AG; therefore, the term notes,
pollution control bonds, variable rate term loan payable to BCP Caylux and a
portion of the capital leases are no longer obligations of Celanese AG. Celanese
AG and its subsidiaries are no longer named parties under the credit facilities
after the Recent Restructuring. See Fixed Contractual Cash Obligations table
below. As of September 30, 2004, Celanese had net intercompany notes with
consolidated subsidiaries, which were eliminated in consolidation. As part of
the Recent Restructuring, these intercompany notes were replaced with unsecured
notes with non-consolidated affiliates for approximately (euro)1 billion. These
unsecured notes bear interest of 4.67% per annum and mature in 2009. These notes
are expected to generate approximately (euro)40 million of net interest income
annually.

     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
(euro)80 million and (euro)79 million at September 30, 2004 and December 31,
2003, respectively, are included within short-term borrowings. Celanese expects
to continue these arrangements at a comparable level in the next fiscal year,
depending on the level of liquidity of the non-consolidated affiliates.

     CAC had a trade receivable securitization program, which allowed
participating operating subsidiaries to sell up to $120 million ((euro)97
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. As
of September 30, 2004, Celanese was in the process of renegotiating the trade
receivable securitization program and therefore there were no outstanding sales
of receivables under this program for the nine months ended September 30, 2004.
Due to the Recent Restructuring, this program is no longer available to
Celanese.

Domination Agreement. The Domination Agreement was approved at the Celanese AG
extraordinary shareholders' meeting on July 31, 2004. The Domination Agreement
between Celanese AG and BCP became effective on October 1, 2004. When the
Domination Agreement became effective, BCP was obligated to offer to acquire all
outstanding Celanese AG shares from the minority shareholders of Celanese AG in
return for payment of fair cash compensation. The amount of this fair cash
compensation has been determined to be (euro)41.92 per share, plus interest, in
accordance with applicable German law. Any minority shareholder who elects not
to sell its shares to BCP will be entitled to remain a shareholder of Celanese
AG and to receive a gross guaranteed fixed annual payment on its shares of
(euro)3.27 per Celanese AG share less certain corporate taxes in lieu of any
future dividend. Taking into account the circumstances and the tax rates at the
time of entering into the Domination Agreement, the net guaranteed fixed annual
payment is (euro)2.89 per share for a full fiscal year. The net guaranteed fixed
annual payment may, depending on applicable corporate tax rates, in the future
be higher, lower or the same as (euro)2.89. The Domination Agreement cannot be
terminated by Celanese Europe Holding in the ordinary course of business until
September 30, 2009.

     At the annual shareholders' meeting on June 15, 2004, Celanese AG
shareholders approved payment of a dividend on the Celanese AG shares for the
fiscal year ended on December 31, 2003 of (euro)0.12 per share. For the short
fiscal year ended on September 30, 2004, Celanese AG will not be able to pay a
dividend to its shareholders due to losses incurred in the Celanese AG statutory
accounts.

     While the Domination Agreement is effective, BCP will be required to
compensate Celanese AG for any future annual loss incurred by Celanese AG, on a
non-consolidated basis, at the end of the fiscal year when the loss was
incurred. This compensation is contingent upon BCP having adequate liquidity.


                                       69



     In addition, the Domination Agreement entitles BCP to give instructions
directly to the management board of Celanese AG, including, but not limited to,
instructions that are disadvantageous to Celanese AG, as long as such
disadvantageous instructions benefit BCP or the companies affiliated with either
BCP or Celanese AG. As a dominated company, Celanese AG may be affected by risks
that affect BCP and its affiliates, including but not limited to risks arising
out of the debt levels of some of these companies.

Contractual Obligations. The following table sets forth our fixed contractual
debt obligations as of September 30, 2004. Subsequent to the Recent
Restructuring, approximately (euro)478 million of the debt relating to CAC is no
longer Celanese's debt.

September 30,2004



                                                          LESS THAN 1    1-3     4-5    AFTER 5
FIXED CONTRACTUAL CASH OBLIGATIONS                TOTAL       YEAR      YEARS   YEARS    YEARS
-----------------------------------------------   -----   -----------   -----   -----   -------
                                                               (IN (EURO) MILLIONS)
                                                  ---------------------------------------------

Total Debt.....................................     587       102         34      14      437
   of which Capital Lease Obligations and Other
      Secured Borrowings.......................      38         5         26       3        4
Operating Leases...............................     166        36         55      30       45
Unconditional Purchase Obligations.............     700       125        129      96      350
Other Contractual Obligations..................     129       129         --      --       --
                                                  -----       ---        ---     ---      ---
   Fixed Contractual Cash Obligations..........   1,582       392        218     140      832
                                                  =====       ===        ===     ===      ===


     Included in operating leases is (euro)55 million of future payments related
to CAC, which was transferred from Celanese due to the Recent Restructuring.

     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. Included in unconditional purchase obligations is
(euro)126 million related to CAC, which was transferred from Celanese due to the
Recent Restructuring.

     Other Contractual Obligations primarily includes committed capital spending
and fines associated with the U.S. antitrust settlement described in Note 25 to
the Consolidated Financial Statements. Included in Other Contractual Obligations
is a (euro)99 million fine from the European Commission related to antitrust
matters in the sorbates industry, which is pending an appeal. Celanese is
indemnified by a third party for 80% of the expenses relating to these matters,
which is not reflected in the amount above.

     At September 30, 2004, Celanese has contractual guarantees and commitments
as follows:



                                                               EXPIRATION PER PERIOD
                                                       -------------------------------------
                                                       LESS THAN 1    1-3     4-5    AFTER 5
CONTRACTUAL GUARANTEES AND COMMITMENTS         TOTAL       YEAR      YEARS   YEARS    YEARS
-----------------------------------------      -----   -----------   -----   -----   -------
                                                            (IN (EURO) MILLIONS)
                                               ---------------------------------------------

Financial Guarantees........................     46          6         11      12       17
Standby Letters of Credit...................    143        143         --      --       --
                                                ---        ---        ---     ---      ---
   Contractual Guarantees and Commitments...    189        149         11      12       17
                                                ===        ===        ===     ===      ===



                                       70



     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 October 1, 2004 to April 30, 2012 is estimated to be approximately $57
million ((euro)46 million). Due to the transfer of CAC, Celanese is no longer
liable under the lease agreement.

     Standby letters of credit of (euro)143 million at September 30, 2004 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. The likelihood is remote that material
payments will be required under these agreements. The stand-by letters of credit
include (euro)139 million issued under the credit-linked revolving facility. As
a result of the Recent Restructuring, CAC is no longer a wholly owned subsidiary
of Celanese AG; therefore, only (euro)25 million of the standby letters of
credit remain with Celanese. Of the remaining standby letters of credit,
approximately (euro)20 million relates to obligations associated with the
sorbates antitrust matters as described in the "Other Contractual Obligations"
above.

     For additional commitments and contingences, see Note 25 to the
Consolidated Financial Statements.

     Celanese expects to continue to incur costs for the following significant
obligations. Although, Celanese cannot predict with certainty the annual
spending for these matters, such matters will affect future cash flows of
Celanese.

                                                                          2005
                                                         2004 ACTUAL   PROJECTED
OTHER OBLIGATIONS                                          SPENDING     SPENDING
------------------------------------------------------   -----------   ---------
                                                           (IN (EURO) MILLIONS)
                                                         -----------------------
Environmental Matters.................................        51         67 (1)
Pension and Other Benefits............................       169        302 (2)
                                                             ---        ---
   Other Obligations..................................       220        369
                                                             ===        ===

(1)  Includes CAC environmental matters of (euro)41 million, which was
     transferred as part of the Recent Restructuring.

(2)  Includes CAC pension and other benefits of (euro)302 million, which was
     transferred as part of the Recent Restructuring

     ENVIRONMENTAL MATTERS

     For the nine months ended September 30, 2004 and the years ended December
31, 2003 and 2002, Celanese's expenditures, including expenditures for legal
compliance, internal environmental initiatives and remediation of active,
orphan, divested and U.S. Superfund sites, were (euro)51 million, (euro)71
million and (euro)88 million, respectively. Capital project related
environmental expenditures, included in worldwide expenditures, were (euro)6
million, (euro)9 million and (euro)4 million, respectively. Environmental
reserves for remediation matters were (euro)119 million, (euro)126 million and
(euro)199 million as of September 30, 2004, December 31, 2003 and December 31,
2002, respectively. (See Notes 15 and 17 to the Consolidated Financial
Statements.)

     It is anticipated that stringent environmental regulations will continue to
be imposed on the chemical industry in general. Celanese cannot predict with
certainty future environmental expenditures, especially expenditures beyond
2005. Due to new air regulations in the U.S., management expects that there will
be a temporary increase in compliance costs for CAC that will total
approximately (euro)25 million to (euro)35 million through 2007. An additional
(euro)40 million may be needed depending upon the outcome of a challenge in U.S.
federal court related to key portions of the regulation. As a result of the
Recent Restructuring, Celanese will no longer be impacted by the affects of
these regulations. In addition, a recent European Union directive requires a
trading system for carbon dioxide emissions to be in place by January 1, 2005.
Accordingly, Emission Trading Systems will affect Celanese's power plants at the
Kelsterbach and Oberhausen sites in Germany and the Lanaken site in Belgium, as
well as power plants operated by InfraServ entities on sites at which we
operate. We and the InfraServ entities may be required to purchase carbon
dioxide credits, which could result in increased operating costs, or may be
required to develop additional cost-effective methods to reduce carbon dioxide
emissions further, which could result in increased capital expenditures.
Additionally, the new regulation indirectly affects our other operations in the
European Union, which may experience higher energy costs from third party
providers. We have not yet determined the impact of this legislation on our
operating costs.


                                       71



     Due to its industrial history, Celanese has the obligation to remediate
specific areas on its active 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 26 to the Consolidated Financial Statements.)

     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. For the nine months ended September 30, 2004 and for the years
ended December 31, 2003 and 2002, pension contributions to the U.S. qualified
defined benefit pension plan amounted to (euro)27 million, (euro)115 million and
(euro)101 million, respectively. Contributions to the German pension plans for
the nine months ended September 30, 2004 were (euro)85 million. Also for the
nine months ended September 30, 2004 and for the years ended December 31, 2003
and 2002, payments to other non-qualified plans totaled (euro)17 million,
(euro)21 million and (euro)20 million, respectively.

     In connection with the tender offer of Celanese AG by BCP, BCP agreed to
pre-fund $463 million ((euro)373 million) of certain pension obligations, which
is expected to eliminate the need for significant funding for seven to ten
years. As of September 30, 2004, $105 million ((euro)85 million) was pre-funded
to the German pension plans and $54 million ((euro)44 million) of cash was
segregated to be used exclusively for the pre-funding of CAC non-qualified
pension obligations. Subsequent to the Recent Restructuring, an additional $300
million ((euro)241 million) was pre-funded to CAC's U.S. qualified pension plan.
As a result of the Recent Restructuring, Celanese is no longer affected by these
pension obligations.

     Spending associated with other benefit plans, primarily retiree medical,
defined contribution and long-term disability, amounted to (euro)40 million,
(euro)58 million and (euro)64 million for the nine months ended September 30,
2004, and for the years ended December 31, 2003 and 2002, respectively. (See
Note 20 to the Consolidated Financial Statements.)

     PLUMBING ACTIONS AND SORBATES LITIGATION

     Celanese is involved in a number of legal proceedings and claims incidental
to the normal conduct of its business. For the nine months ended September 30,
2004 and for the years ended December 31, 2003 and 2002, there were net cash
inflows of approximately zero, (euro)111 million and (euro)28 million in
connection with the plumbing actions and sorbates litigation. As of September
30, 2004, December 31, 2003 and December 31, 2002, Celanese had reserves of
(euro)165 million, (euro)168 million and (euro)111 million, respectively, for
these matters. In addition, Celanese had receivables from insurance companies
and Hoechst in connection with the plumbing and sorbates matters of (euro)136
million, (euro)137 million and (euro)94 million as of September 30, 2004,
December 31, 2003 and December 31, 2002, respectively. The reserves and
receivables associated with the plumbing actions were transferred as part of the
Recent Restructuring.

     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 25 to the Consolidated
Financial Statements.)


                                       72



     CAPITAL EXPENDITURES

     Celanese's capital expenditures were (euro)123 million for the nine months
ended September 30, 2004. Capital expenditures primarily related to a new Ticona
research and administrative facility in Florence, Kentucky, the expansion of
production facilities for polyacetal in Bishop, Texas and GUR in Oberhausen,
Germany, major replacements of equipment, capacity expansions, major investments
to reduce future operating costs, environmental, health and safety initiatives
and the integration of a Company-wide SAP platform. 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 for the 2005 fiscal year to be approximately 4% of
net sales for the nine months ended September 30, 2004. The anticipated spending
includes CAC, which represents approximately 50 percent of this amount. At
September 30, 2004, there were approximately (euro)23 million of outstanding
commitments related to capital projects, which are included within the fixed
contractual cash obligations table above.

     TOTAL SHAREHOLDERS' EQUITY

     At September 30, 2004, shareholders' equity amounted to (euro)1,888
million, compared to (euro)2,044 million at December 31, 2003. The decrease was
primarily attributable the recognition of an additional minimum liability
adjustment for pensions of (euro)115 million and current year net loss of
(euro)70 million.

     At December 31, 2003, shareholders' equity amounted to (euro)2,044 million,
compared to (euro)2,000 million at December 31, 2002. The increase was primarily
attributable to current year net earnings of (euro)132 million and (euro)39
million related to the indemnification from Hoechst for the sorbates antitrust
matters partially offset by the impact of foreign currency translation
adjustments of (euro)114 million and dividends of (euro)22 million.

     As of September 30, 2004, Celanese had approximately 25,000 stock
appreciation rights outstanding. There were 3.1 million stock appreciation
rights exercised during the nine months ended September 30, 2004. Payments in
2004 related to the exercise of stock appreciation rights amounted to (euro)48
million.

     There were 49,881,618 and 49,321,468 shares outstanding as of September 30,
2004 and December 31, 2003, respectively. As of September 30, 2004 and December
31, 2003, Celanese had 544,750 and 1,151,600 stock options outstanding,
respectively. Expense associated with stock options was approximately (euro)2
million, (euro)5 million and (euro)3 million for the nine months ended September
30, 2004 and the years ended December 31, 2003 and 2002, respectively.

     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 Activities
amended by SFAS No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities and SFAS No. 148, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. (See Note 24 to the Consolidated
Financial Statements.)


                                       73



     Foreign Exchange Risk Management

     Celanese's reporting currency is the euro. Certain Celanese entities have
receivables and payables denominated in currencies other than their functional
currencies, which creates 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 potential
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 less than one year. Celanese's centralized hedging strategy states
that foreign currency denominated receivables or liabilities recorded 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. Net foreign currency transaction gains or losses are
recognized on the underlying transactions, which are offset by losses and gains
related to foreign currency forward contracts.

     Contracts with notional amounts totaling approximately (euro)498 million
and (euro)606 million at September 30, 2004 and December 31, 2003, respectively,
are predominately in U.S. dollars, British pound sterling, Japanese yen, and
Canadian dollars. For the nine months ended September 30, 2004, Celanese's
foreign currency forward contracts, designated as fair value hedges, resulted in
a decrease in total assets and total liabilities of (euro)26 million and (euro)2
million, respectively. As of September 30, 2004, these contracts hedged a
portion (approximately 81%) of Celanese's U.S. dollar denominated intercompany
net receivables held by euro denominated entities. Related to the unhedged
portion, a net gain of approximately (euro)2 million from foreign exchange gains
or losses was recorded to interest and other income, net for the nine months
ended September 30, 2004. During 2003, Celanese's foreign currency forward
contracts, designated as fair value hedges, resulted in a decrease in total
assets of (euro)7 million and an increase in total liabilities of (euro)1
million. As of December 31, 2003, these contracts hedged a portion
(approximately 85%) of Celanese's U.S. dollar denominated intercompany net
receivables held by euro denominated entities. Related to the unhedged portion,
a net loss of approximately (euro)12 million from foreign exchange gains or
losses was recorded to interest and other income, net in 2003. During the year
ended December 31, 2002, Celanese hedged all of its U.S. dollar denominated
intercompany net receivables held by euro denominated entities. Therefore, there
was no material net effect from foreign exchange gains or losses in interest and
other income, net. Hedging activities related to intercompany net receivables
yielded cash flows from operating activities of approximately (euro)13 million,
(euro)160 million and (euro)100 million for the nine months ended September 30,
2004 and the years ended December 31, 2003 and 2002, respectively.

     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 6% for
the nine months ended September 30, 2004 and approximately 13% in 2003 and
increased net sales by approximately 3% in 2002. Celanese estimates that the
translation effects of changes in the value of other currencies against the euro
increased total assets by approximately 1% in 2004 and decreased total assets by
approximately 13% in 2003. 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.

     Interest Rate Risk Management

     Celanese entered into interest rate swap agreements to reduce the exposure
of interest rate risk inherent in Celanese's outstanding debt by locking in
borrowing rates to achieve a desired level of fixed/floating rate debt depending
on market conditions. At September 30, 2004, Celanese had no interest rate swap
agreements in place. Celanese had open interest rate swaps with a notional
amount of $200 million ((euro)158 million) at December 31, 2003. In the three
months ended June 30, 2004, Celanese recorded a loss of (euro)3 million in
interest and other income, net associated with the early termination of its $200
million ((euro)165 million) interest rate swap. During 2003, Celanese recorded a
loss of (euro)6 million in interest and other income, net, associated with the
early termination of one of its


                                       74



interest rate swaps. Celanese recognized net interest expense from hedging
activities relating to interest rate swaps of (euro)3 million, (euro)10 million
and (euro)13 million for the nine months ended September 30, 2004 and years
ended December 31, 2003 and 2002, respectively. During 2003, Celanese's interest
rate swaps, designated as cash flow hedges, resulted in a decrease in total
assets and total liabilities and an increase in shareholders' equity of (euro)3
million, (euro)11 million and (euro)5 million, net of related income tax of
(euro)3 million, respectively. Celanese recorded a net gain (loss) of less than
((euro)1) million, (euro)1 million and ((euro)3) million in interest and other
income, net for the ineffective portion of the interest rate swaps, during the
nine months ended September 30, 2004 and the years ended December 31, 2003 and
2002, respectively.

     Commodity Risk Management

     Celanese's policy for the majority of our natural gas and butane
requirements allows entering into supply agreements and forward purchase or
cash-settled swap contracts. During the nine months ended September 30, 2004,
there were no forward contracts for our butane requirements and, for natural
gas, we had positions covering about 35% of our Chemical Products segment North
American requirements primarily as a result of forward contracts entered into in
2003. In the future, we may modify our practice of purchasing a portion of our
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. 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 on these contracts are
included in the cost of the commodity upon settlement of the contract. Celanese
recognized losses of (euro)1 million, (euro)3 million and less than (euro)1
million from natural gas swap and butane contracts in the nine months ended
September 30, 2004 and the years 2003 and 2002, respectively. There was no
material impact on the balance sheet at September 30, 2004, December 31, 2003.
The effective portion of unrealized gains and losses associated with the
cash-settled swap contracts are (euro)0 million as of September 30, 2004 and
December 31, 2003, which are recorded as a component of accumulated other
comprehensive income (loss) until the underlying hedged transactions are
reported in earnings. Celanese did not have any open commodity swaps as of
September 30, 2004. The Company had open swaps with a notional amount of (euro)4
million as of December 31, 2003.

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 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 3 to the Consolidated Financial Statements for a
more comprehensive discussion of Celanese's significant accounting policies.


                                       75



     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 September
30, 2004 and December 31, 2003, the carrying amount of property, plant and
equipment was (euro)1,202 million and (euro)1,354 million, respectively. As
discussed in Note 3 to the Consolidated Financial Statements, Celanese assesses
the recoverability of property, plant and equipment to be held and used 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.

     As a result of the planned consolidation of tow production and the
termination of filament production, the Acetate Products segment recorded
impairment charges of (euro)100 million associated with plant and equipment in
the nine months ended September 30, 2004.

     In December 2004, we approved a plan to dispose of the COC business
included within the Ticona segment. This decision resulted in (euro)25 million
of asset impairment charges recorded as a special charge related to the COC
business.

     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
September 30, 2004 and December 31, 2003, the Company had (euro)888 million and
(euro)877 million, respectively, of goodwill and other intangible assets.

     During 2003, Celanese performed the annual impairment test of goodwill and
determined that there was no impairment. As a result of the of the tender offer
price of (euro)32.50 per share announced on December 16, 2003, which would place
an implicit value on Celanese at an amount below book value of the net assets,
management initiated an impairment analysis in accordance with SFAS No. 142. The
impairment analysis was prepared on a reporting unit level and utilized the most
recent cash flow, discount rate and growth rate assumptions. Based on the
resulting analysis, management concluded that goodwill was not impaired as of
December 31, 2003.

     As of September 30, 2004, no significant changes in the underlying business
assumptions or circumstances that drive the impairment analysis led management
to believe goodwill might have been impaired. We will continue to evaluate the
need for impairment if changes in circumstances or available information
indicate that impairment may have occurred.

     A prolonged general economic downturn and, specifically, a continued
downturn in the chemical industry as well as other market factors 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 ongoing course of operations. Restructuring
provisions represent costs related to severance and other benefit programs
related to major activities undertaken to fundamentally redesign our operations
as well as 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


                                       76



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 27 to the Consolidated Financial
Statements.)

     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 reserves for environmental liabilities were (euro)119 million and
(euro)126 million at September 30, 2004 and December 31, 2003, respectively.
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 and post-remediation monitoring costs. These reserves do not
take into account any claims or recoveries from insurance. The measurement of
environmental liabilities is based on a range of management's periodic estimate
of what it will cost to perform each of the elements of the remediation effort.
Celanese uses its best estimate within the range to establish its environmental
reserves. The Company utilizes third parties to assist in the management and the
development of its cost estimates for its sites. Changes to environmental
regulations or other factors affecting environmental liabilities are reflected
in the Consolidated Financial Statements in the period in which they occur.
Celanese accrues for legal fees related to litigation matters when the costs
associated with defense can be reasonably estimated and are probable to occur.
All other fees are expensed as incurred. (See Note 26 to the Consolidated
Financial Statements.)

     Asset Retirement Obligations

     As of September 30, 2004 and December 31, 2003, Celanese has reserves for
asset retirement obligations of (euro)49 million and (euro)37 million,
respectively. SFAS No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred.
The liability is measured at the discounted fair value and is adjusted to its
present value in subsequent periods as accretion expense is recorded. The
corresponding asset retirement costs are capitalized as part of the carrying
amount of the related long-lived asset and depreciated over the asset's useful
life. The Company has identified but not recognized asset retirement obligations
related to substantially all its existing operating facilities. Examples of
these types of obligations include demolition, decommissioning, disposal and
restoration activities. Legal obligations exist in connection with the
retirement of these assets upon closure of the facilities or abandonment of the
existing operations. However, operations at these facilities are expected to
continue indefinitely and therefore a reasonable estimate of fair value cannot
be determined at this time. In the future, we will assess strategies of the
businesses acquired and may support decisions that differ from past decisions of
management regarding the continuing operations of existing facilities. Asset
retirement obligations will be recorded if these strategies are changed and
probabilities of closure are assigned to existing facilities. If certain
operating facilities were to close, the related asset retirement obligations
could significantly affect our results of operations and cash flows.

     In accordance with SFAS No. 143, the Acetate Products segment recorded a
charge of (euro)7 million included within 2003 depreciation expense, related to
potential asset retirement obligations, as a result of a worldwide assessment of
our acetate production capacity. The assessment concluded that there was a
probability that certain facilities would be closed in the latter half of the
decade. In October 2004 we announced plans to consolidate flake and tow
production by early 2007 and to discontinue production of filament by mid-2005.
The restructuring will result in the discontinuance of acetate production at two
sites. As such, we recorded a charge of (euro)10 million included within
depreciation expense, of which (euro)7 million was recorded by the Acetate
Products segment and (euro)3 million by the Chemical Products segment in the
nine months ended September 30, 2004.


                                       77



     Realization of Deferred Tax Assets

     Total net deferred tax assets were (euro)394 million and (euro)439 million
at September 30, 2004 and December 31, 2003, respectively. Celanese regularly
reviews its deferred tax assets for recoverability and establishes a valuation
allowance based on historical taxable income, projected future taxable income,
applicable tax strategies, 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. federal and state net
operating losses carryforwards, federal capital loss carryforwards, German trade
income tax loss carryforwards and Mexican net operating loss carryforwards.
During the nine months ended September 30, 2004, Celanese recorded (euro)144
million of valuation allowances related to U.S. NOL carryforwards. Under U.S.
tax law, a change in ownership of more than fifty percentage points results in
an annual limitation on the future utilization of the NOL carryforwards. An
additional (euro)25 million valuation allowance was applied against net Canadian
deferred tax assets. (See Note 14 to the Consolidated Financial Statements.)

     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 to the U.S defined
benefit pension plan (euro)27 million, (euro)115 million and (euro)101 million
for the nine months ended September 30, 2004 and for the years ended December
31, 2003 and 2002, respectively. Contributions to the German pension plans for
the nine months ended September 30, 2004 were (euro)85 million. Benefits are
generally based on years of service and/or compensation. Various 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 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 other 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. At September 30, 2004, we assumed an
expected long-term rate of return on plan assets of 8.5% for the U.S. qualified
defined benefit pension plan, which represents greater than 85 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 (15 to 20 years)
has exceeded 9.0%. However, for the nine months ended September 30, 2004, the
U.S. qualified defined benefit pension plan assets actual return was less than
the expected long-term rate of return of plan assets. The Company had lowered
its expected long-term rate of return on U.S. qualified defined benefit pension
plan assets from 9.0% to 8.5% as it expects lower future returns considering the
lower inflationary environment.

     For the nine months ended September 30, 2004, our expected long-term rate
of return assumption for our U.S. plans was 8.5%, 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 defined benefit pension plan to increase pension expense by
an estimated (euro)4 million in 2004. Another estimate that affects our pension
and other postretirement benefit expense is the discount rate used in the annual
actuarial valuations of pension and other 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 other postretirement benefit obligations. The discount rate is
generally based on the yield on high-quality corporate fixed-income securities.
At September 30, 2004, we lowered our discount rate to 6.00% from 6.25% at
December 31, 2003 for our U.S. plans. We estimate that a 50 basis point decline
in the discount rate for our U.S. pension and postretirement medical plans will
increase pension and other postretirement benefit annual expenses by an
estimated (euro)4 million and less than (euro)1 million, respectively, and our
benefit obligations by approximately (euro)100 million and approximately
(euro)10 million, respectively.


                                       78



     Over the past several years, Celanese has experienced increases in
unrecognized net actuarial pension losses. The losses were mainly due to asset
losses resulting from asset returns that were less than the assumed rate of
return and increases in the projected benefit obligation.

     Celanese sponsors other postretirement benefit plans. These plans provide
medical and life insurance benefits to retirees who meet minimum age and service
requirements. The postretirement benefit cost at December 31, 2003 and 2002,
includes (euro)31 million and (euro)41 million, respectively, in accrued
expenses and (euro)253 million and (euro)311 million, respectively, in other
noncurrent liabilities. The post-retirement benefit cost was (euro)19 million
for the nine months ended September 30, 2004 and, and the accrued
post-retirement liability was (euro)251 million at September 30, 2004. The key
determinants of the accumulated postretirement benefit obligation ("APBO") are
the discount rate and the healthcare cost trend rate. The healthcare cost trend
rate has a 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 September 30, 2004, and
the 2004 postretirement benefit cost by approximately (euro)2 million and less
than (euro)1 million, and decreasing the healthcare cost trend rate by one
percentage point in each year would decrease the APBO at September 30, 2004 and
the 2004 postretirement benefit cost by approximately (euro)2 million and less
than (euro)1 million, respectively. (See Note 20 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 25 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, as well as 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"), a U.S. subsidiary of Celanese, which
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
September 30, 2004 and December 31, 2003, Celanese had accruals of (euro)60
million for this matter, of which (euro)10 million and (euro)11 million,
respectively, are 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 September 30, 2004 and December
31, 2003, insurance claims receivable were (euro)52 million and (euro)50
million, respectively. Collectability could vary depending on the financial
status of the insurance carriers. In 2003, Celanese recorded income from special
charges of (euro)94 million and interest income of (euro)18 million, related to
settlements from insurers in excess of the recorded receivable amounts. (See
Note 25 to the Consolidated Financial Statements). As a result of the Recent
Restructuring, Celanese will not be impacted by these proceedings in the future.

     Nutrinova Inc., a U.S. subsidiary of Nutrinova Nutrition Specialties & Food
Ingredients GmbH, a wholly-owned subsidiary of Celanese, is party to various
legal proceedings in the United States, Canada and Europe alleging Nutrinova
Inc. engaged in unlawful, anticompetitive behavior which affected the sorbates
markets while it was a wholly-owned subsidiary of Hoechst. In accordance with
the demerger agreement between Hoechst and


                                       79



Celanese, which became effective October 1999, Celanese, the new owner to
Hoechst's sorbates business, was assigned the obligation related to these
matters. However, Hoechst agreed to indemnify Celanese for 80 percent of
payments for such obligations. Expenses related to this matter are recorded
gross of any such recoveries from Hoechst while the recoveries from Hoechst,
which represents 80 percent of such expenses, are recorded directly to
shareholders' equity, net of tax, as a contribution of capital.

     Based on the advice of external counsel and a review of the existing facts
and circumstances relating to the sorbates matter, including the status of
governmental investigations, as well as civil claims filed and settled, Celanese
Ahas remaining accruals of (euro)105 million and (euro)108 million at September
30, 2004 and December 31, 2003, respectively, included in current liabilities
for the estimated loss relative to this matter. Although the outcome of this
matter cannot be predicted with certainty, management's best estimate of the
range of possible additional future losses and fines, including any that may
result from governmental proceedings, as of September 30, 2004 is between
(euro)0 and (euro)7 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. At September 30, 2004 and December
31, 2003, Celanese has receivables, recorded within current assets, relating to
the sorbates indemnification from Hoechst, of (euro)84 million and (euro)87
million, respectively. (See Note 25 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 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.

     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.

     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 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. It is possible that actual
results could differ significantly from the recorded liabilities.

     The Captives use reinsurance arrangements to reduce their risk of loss.
Reinsurance arrangements however do not relieve the Captives from their
obligations to policyholders. 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 based on the terms of the policies.
Capitalization of the Captives is determined by regulatory guidelines. As of
September 30, 2004, the net retained concurrent aggregate risk of all policies
written by the Captives, after reinsuring higher tier risks with third party
insurance companies, net of established reserves, amounted to approximately
(euro)416 million. This amount of exposure is further offset by the underlying
equity of the Captives amounting to approximately (euro)298 million at September
30, 2004.


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OUTLOOK

     In the first quarter of our 2005 fiscal year, our Chemical Products segment
benefited from higher pricing while our Ticona and Performance Products segments
experienced volume increases year over year. As we begin the second quarter of
our 2005 fiscal year, demand for our products in Europe is mixed. We remain
cautious about economic conditions as pricing for our hydrocarbon-based raw
materials and energy are expected to remain at high levels. We are still
assessing the financial effect of the transfer of our former subsidiaries, CAC
and CPO, which involves the renegotiation of complex supply and sales agreements
with our parent. As a dominated company, we will not offer guidance on operating
profit, which can be influenced by unilateral decisions of our parent. Should
those decisions result in a loss for Celanese AG, then the Company must be
compensated.

     To increase the productivity and profitability of our operations and those
of our affiliates, we announced a plan to dispose of the cyclo-olefin copolymer
("COC") business included within the Technical Polymers Ticona segment and our
interest in Pemeas GmbH, the fuel cell joint venture included in Other
Activities. As a result of this decision we expect to record an impairment loss
related to the COC business, the amount of which is in the process of being
determined. We also expect that in the three months ended December 31, 2004
equity in net earnings of affiliates will include a (euro)9 million charge,
representing Celanese's portion of restructuring charges recorded by our
European oxo chemicals joint venture. In March 2005, Celanese received (euro)56
million for an early contractral settlement of receivables related to the sale
in 2000 of its 50% interest in the Vinnolit Kunstoff GmbH venture. The majority
of the cash to be received is expected to be recognized as a gain during the
three months ended March 31, 2005.

     RISKS OF FUTURE DEVELOPMENT

     Celanese's business activity is subject to general economic and political
risks in the countries and regions in which it does business. As a result of the
transfers of CAC and CPO, Celanese AG now serves primarily as the holding
company for the European business and certain Asian businesses of Celanese
Corporation, the ultimate parent of BCP and Celanese AG. In addition, changes in
the economic conditions in many of its markets (e.g. automotive,
electrical/electronic, and construction industries), as well as cyclicality in
the basic chemicals industry could have an effect on the Company's economic
performance. In particular, the markets for basic chemicals are characterized by
significant economic swings, during which periods of low prices and overcapacity
could lead to reduced profit margins and lower operating profits.

     Celanese is subject to risks associated with the increased volatility in
raw materials prices and the availability of key raw materials such as natural
gas, propylene, ethylene and butane, as well as the Company's ability to pass on
increased raw materials costs to its customers by increasing the prices of its
products, or to offset such increased raw materials costs by reducing costs. It
is the Company's policy to lock in prices for certain important raw materials by
entering into hedging arrangements, which are customary in the industry. This
practice could also lead to negative effects, should unforeseen developments
occur with respect to raw material prices.

     The safe operation of Celanese's plants is subject to risks associated with
the production of chemicals, including the storage and transport of raw
materials, products and wastes, and in particular environmental risks. The
Company carries appropriate property, business interruption and casualty
insurance in accordance with customary industry practice. The environmental,
health and safety regulations pertaining to Celanese's business are subject to
continuous legislative review, which could result in stricter regulations and
trigger increased costs for the Company. In addition, Celanese's plants may be
negatively affected by infrastructure projects such as the planned expansion of
the Frankfurt international airport. The expansion, which is not expected to be
approved until 2007, with operations starting in 2009-2010 could, depending on
the outcome, have a negative effect on the current production capacity at and
the future development of Celanese's Kelsterbach plant.

     Moreover, in connection with the demerger, certain environmental
liabilities, including those resulting from the former business activities of
the Hoechst Group at various sites, were allocated between Celanese and Hoechst
AG, regardless of the responsibility for the cause of such environmental
liabilities. In some instances this could lead to Celanese having to compensate
third parties, as well as to indemnification payments between Celanese and
Hoechst, the amounts of which cannot at present be determined. Celanese has
already created reserves for this contingency as required.

     Depending on their categorization as to their dangerousness resulting from
risk assessment by the relevant authorities, the products of the chemicals
industry are subject to restrictions regarding production, handling and use. The
applicable regulations and the resulting restrictions are under constant review
by the relevant authorities. Therefore, a change in the risk assessment of
Celanese's products can affect demand for these products. Currently, the
European Union evaluates potential health risks associated with a number of
chemical products including vinyl acetate monomer. Similarly, the International
Agency for Research on Cancer ("IARC") has reclassified


                                       81



formaldehyde as a known human carcinogen based on studies linking formaldehyde
exposure to nasopharyngeal cancer, a rare cancer in humans. The results of the
IARC's review will be examined by government agencies responsible for setting
worker and environmental exposure standards and labeling requirements. Although
the final effect cannot be predicted at this time, the IARC's reclassification
could adversely affect the demand for this product.

     Additionally, fluctuations in market rates of return and interest rates
affect the value of Celanese's pension assets and liabilities. An extended
period of decline in rates of return and interest rates could cause a material
financial impact on Celanese's financial position or cash flows in any given
year. (See "Critical Accounting Policies" and Note 3 to the Consolidated
Financial Statements).

     Under the domination and profit and loss transfer agreement (the
"Domination Agreement") that Celanese AG entered into with its majority
shareholder Celanese Europe Holding GmbH & Co. KG ("BCP" or the Purchaser") BCP
is entitled to give instructions directly to the management board of Celanese
AG, including, but not limited to, instructions that are disadvantageous to
Celanese AG, as long as such disadvantageous instructions benefit BCP or the
companies affiliated with either BCP or Celanese AG. In addition, Celanese AG
is, under the Domination Agreement, obligated to transfer its entire annual
statutory profits, subject to certain deductions, to BCP while the Domination
Agreement requires BCP to compensate Celanese AG for any annual statutory loss
(Jahresfehlbetrag) incurred on a non-consolidated basis. Furthermore, the net
amount of the guaranteed fixed annual payment (Ausgleich) guaranteed by BCP
vis-a-vis the minority shareholders of Celanese AG in lieu of any future
dividend as long as the Domination Agreement is effective, which, at the time of
the entering into of the Domination Agreement, amounted to (euro)2.89 per share
for a full fiscal year, may, depending on applicable corporate tax rates, in the
future be higher, lower or the same as (euro)2.89. As a dominated company,
Celanese AG may be affected by risks that affect BCP and its affiliates,
including but not limited to risks arising out of the debt levels of some of
these companies.

     Management is not currently aware of any risks that jeopardize the
existence of Celanese.

     FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE

     This annual report contains certain forward-looking statements and
information relating to us that are based on the beliefs of our management as
well as assumptions made by, and information currently available to, us. These
statements include, but are not limited to, statements about our strategies,
plans, objectives, expectations, intentions, expenditures, and assumptions and
other statements contained in this prospectus 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 us are intended to identify forward-looking statements. These statements
reflect our current views 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 our actual results, performance or achievements 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:

     o    changes in general economic, business, political and regulatory
          conditions in the countries or regions in which we operate;

     o    the length and depth of product and industry business cycles
          particularly in the automotive, electrical, electronics and
          construction industries;

     o    changes in the price and availability of raw materials, particularly
          changes in the demand for, supply of, and market prices of fuel oil,
          natural gas, coal, electricity and petrochemicals such as ethylene,
          propylene and butane, including changes in production quotas in OPEC
          countries and the deregulation of the natural gas transmission
          industry in Europe;

     o    the ability to pass increases in raw material prices on to customers
          or otherwise improve margins through price increases;


                                       82



     o    the ability to maintain plant utilization rates and to implement
          planned capacity additions and expansions;

     o    the ability to reduce production costs and improve productivity by
          implementing technological improvements to existing plants;

     o    the existence of temporary industry surplus production capacity
          resulting from the integration and start-up of new world-scale plants;

     o    increased price competition and the introduction of competing products
          by other companies;

     o    the ability to develop, introduce and market innovative products,
          product grades and applications, particularly in the Technical
          Polymers Ticona and Performance Products segments of our business;

     o    changes in the degree of patent and other legal protection afforded to
          our products;

     o    compliance costs and potential disruption or interruption of
          production due to accidents or other unforeseen events or delays in
          construction of facilities;

     o    potential liability for remedial actions under existing or future
          environmental regulations;

     o    potential liability resulting from pending or future litigation, or
          from changes in the laws, regulations or policies of governments or
          other governmental activities in the countries in which we operate;

     o    changes in currency exchange rates and interest rates;

     o    changes in the composition or restructuring of us or our subsidiaries
          and the successful completion of acquisitions, divestitures and joint
          venture activities;

     o    pending or future challenges to the Domination Agreement; and

     o    various other factors, both referenced and not referenced in this
          prospectus.

     Many of these factors are macroeconomic in nature and are, therefore,
beyond our control. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, our actual
results, performance or achievements may vary materially from those described in
this annual report as anticipated, believed, estimated, expected, intended,
planned or projected. We neither intend nor assume any obligation to update
these forward-looking statements, which speak only as of their dates.


                                       83



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 March 29, 2005 and their functions are as follows:



Andreas Pohlmann...............   Age:                         47
                                  First Elected:               2002
                                  Function:                    Chairman of the Celanese Board of Management Responsible for
                                                               the Performance Products segment
                                  Supervisory Board
                                  Memberships/Directorships:   Executive Vice President, Chief Administrative Officer and
                                                               Secretary of Celanese Corporation, Managing Director of BCP
                                                               Holdings GmbH, Managing Director of Celanese Europe Management
                                                               GmbH, Pensionskasse der Mitarbeiter der Hoechst-Gruppe Vva G
                                                               (German pension fund for employees of the Hoechst Group)
                                  Term Expires                 October 31, 2007

Lyndon Cole....................   Age:                         52
                                  First Elected:               2003
                                  Function                     Vice-Chairman of the Celanese AG Board of Management,
                                                               Responsible for the operating businesses
                                  Supervisory Board
                                  Memberships/Directorships:   Executive Vice President of Celanese Corporation, Managing
                                                               Director of BCP Holdings GmbH, Managing Director of Celanese
                                                               Europe Management GmbH
                                  Term Expires                 October 31, 2006

Peter Jakobsmeier..............   Age:                         60
                                  First Elected:               2004
                                  Function:                    Chief Financial Officer
                                  Term Expires                 October 31, 2006
                                  Supervisory Board
                                  Memberships/Directorships:   Managing Director of BCP Holdings GmbH, Managing Director of
                                                               Celanese Europe Management GmbH


     Andreas Pohlmann was appointed to the Celanese AG board of management on
October 22, 2002 and became chairman on November 1, 2004. 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. Dr. Pohlmann is currently
the executive vice president and chief administrative officer of Celanese
Corporation.

     Lyndon Cole became Ticona's president and the head of the Celanese Growth
and Excellence Council on April 1, 2003. He was named to Celanese AG's board of
management on September 23, 2003 and became vice-chairman on November 1, 2004.
Dr. Cole joined Celanese in March 2002 as president of Celanese Chemicals. From
1998 to 2001 he had been chief executive officer of United Kingdom based
Elementis PLC, a global specialty chemicals company. Prior to joining Elementis,
he was general manager-Global Structured Products for GE Plastics from 1990 to
1998 and previously held general management and commercial positions with GE
Plastics, Dow Chemicals Europe and ICI. Dr. Cole is currently an executive vice
president of Celanese Corporation.

     Peter Jakobsmeier was named a member of the Celanese AG board of management
and became its chief financial officer on November 1, 2004. He was Celanese AG's
vice president and treasurer from 2000 to 2004 and its vice president and
controller from 1999 to 2000. In his 29 years at Hoechst AG, Mr. Jakobsmeier
held increasing positions of responsibility, ultimately serving as the head of
corporate controlling.


                                       84



     The incumbent members of the supervisory board of Celanese, their
respective ages as of March 29, 2005 and their principal occupations are as
follows:



Bernd Thiemann(4)(5)...........   Age:                         61
   Chairman                       First Elected:               2004
                                  Principal Occupation:        Chairman of the Advisory Board of Rothschild GmbH
                                  Supervisory Board
                                  Memberships/Directorships:   Bankhaus Hallbaum KgaA, Berentzen AG (Deputy Chairman),
                                                               Deutsche Euroshop AG, EM.TV AG (Chairman), VHV a.G., Warburg
                                                               KaA Holding (Deputy Chairman) Wurth Gruppe (Deputy Chairman of
                                                               the advisory board)
                                  Term Expires:                2009

Reiner Nause(1)(5).............   Age:                         59
   Deputy Chairman                First Elected:               1999
                                  Principal Occupation:        Technician, Chairman of the Celanese AG Group Workers' Council
                                  Term Expires:                2005

Hanswilhelm Bach(1)(4).........   Age:                         57
                                  First Elected:               1999
                                  Principal Occupation:        Graduate chemist, Business Liaison Manager Environmental,
                                                               Health & Safety Affairs at Ticona GmbH, Kelsterbach site,
                                                               Chairman of the Group Senior Executives Committee of Celanese
                                                               AG
                                  Term Expires:                2005

Ralf Becker(1).................   Age:                         39
                                  First Elected:               2003(3)
                                  Principal Occupation:        Labor Union Secretary, Deputy Regional Head of IG BCE,
                                                               Hesse/Thuringia
                                  Supervisory Board
                                  Memberships/Directorships:   RAG Bildung GmbH advisory board
                                  Term Expires:                2005

Hans-Jurgen Brinkmann(1)(4)....   Age:                         50
                                  First Elected:               2002(2)
                                  Principal Occupation:        Plant mechanic, Member of the Celanese Joint Workers' Council,
                                                               Ruhrchemie plant
                                  Term Expires:                2005

Chinh E. Chu...................   Age:                         38
                                  First Elected:               2004
                                  Principal Occupation:        Senior Managing Director of The Blackstone Group
                                  Supervisory Board
                                  Memberships/Directorships:   Graham Packaging Holdings Company, Haynes International Inc.,
                                                               Nalco Holdings LLC, Nycomed Holdings, Celanese Corporation
                                  Term Expires:

Armin Droth(1).................   Age:                         50
                                  First Elected:               2000
                                  Principal Occupation:        Electrical Engineer, representative of the German association
                                                               of management and professional staff (Verband angestellter
                                                               Akademiker), member of the Celanese joint workers' council,
                                                               Hochst site
                                  Term Expires:                2005



                                       85



Cornelius Geber(4).............   Age:                         52
                                  First Elected:               2004
                                  Principal Occupation:        Managing Director of BCP Holding GmbH, Celanese Europe
                                                               Management GmbH, and CG Beteiligungs- & Management GmbH
                                  Supervisory Board
                                  Memberships/Directorships:   Barkawi & Partner GmbH (Advisory Board), Cargofresh AG,
                                                               Inconso AG (Deputy Chairman), Kiala S.A., Neopost S.A.,
                                                               Ponaxis AG (Chairman)
                                  Term Expires:                2009

Benjamin J. Jenkins............   Age:                         34
                                  First Elected:               2004
                                  Principal Occupation:        Principal in the Private Equity Group at The Blackstone Group
                                  Supervisory Board
                                  Memberships/Directorships:   Axtel S.A. de C.V., Vanguard Health Systems LLC, Celanese
                                                               Corporation
                                  Term Expires:                2009

Hanns Ostmeier.................   Age:                         44
                                  First Elected:               2004
                                  Principal Occupation:        Senior Managing Director at The Blackstone Group and
                                                               Managing Director of The Blackstone Group Deutschland GmbH,
                                                               Celanese Corporation
                                  Term Expires:                2009

Herbert Schmalz(1).............   Age:                         53
                                  First Elected:               2003(2)
                                  Principal Occupation:        Chemistry Technician,  Head of Warehouse and Shipping for
                                                               Technical Polymers, Ruhrchemie Plant.
                                  Term Expires:                2005

Ron Sommer(4)..................   Age:                         55
                                  First Elected:               2004
                                  Principal Occupation:        Former Chairman of the Board of Deutsche Telekom AG
                                  Supervisory Board
                                  Memberships/Directorships:   Munchener Ruckversicherungs-Gesellschaft Aktiengesellschaft,
                                                               Motorola Inc.
                                  Term Expires:                2009


----------
(1) Representative of the employees

(2) In May 2000, Celanese's employees in Germany elected 10 representatives to
the supervisory board in accordance with the German Co-Determination Law
(Mitbestimmungsgesetz). Six of these representatives took office immediately;
the other four 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
2003 and 2002, respectively, replacing Gerd Decker and Werner Zwoboda,
respectively.

(3) Appointed by the local court (Amtsgericht) in Konigstein on September 30,
2003 to replace Ralf Sikorski, who resigned on September 15, 2003.

(4) Finance and Audit Committee

(5) Personnel and Compensation Committee

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
calendar year 2004, amounted to (euro)120,904 for the Chairman, (euro)90,678 for
the Deputy Chairman and (euro)60,452 for all other members of the Celanese
supervisory board. In addition, for each Celanese supervisory board meeting
attended, members receive a meeting fee of (euro)4,000 for the Chairman,
(euro)3,000 for the Deputy Chairman and (euro)2,000 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 (euro)4,000 for the
chairman of the committee and (euro)2,000 for all other members of the
committee. All members of the Celanese supervisory board are also reimbursed for
value added tax on these amounts.


                                       86



     As a result of the Tender Offer, the June 15, 2004 Annual General Meeting
approved several changes in the Supervisory Board's compensation. Until December
31, 2003, members of the supervisory board received up to 50 percent of their
fixed compensation in the form of Celanese ordinary shares, and they
participated in a stock appreciation rights plan, the broad terms of which are
similar to the stock appreciation rights plans described in long-term incentive
plans below. At the 2004 Annual General Meeting, the shareholders approved the
stoppage of the share payments to supervisory board members as well as the
termination of the stock appreciation rights plan. The stock appreciation rights
plan was replaced with an increase in fixed remuneration effective as of January
1, 2004, which is reflected in the paragraph above. Stock appreciation rights
which the supervisory board members received but which were not yet exercisable
were settled by a lump-sum payment reflecting the discounted value of the stock
appreciation rights. Consequently, supervisory board members received
(euro)15.25 for each stock appreciation right granted in 2002 and (euro)13.03
for each stock appreciation right granted in 2003. The value of the stock
appreciation rights was determined on the basis of the arithmetic mean of the
closing price for Celanese shares on Xetra trading on the Frankfurt Stock
Exchange for the last twenty consecutive trading days directly preceding
December 16, 2003 by the following three credit institutions applying the
Black-Scholes formula: Deutsche Bank, Bayerische Hypo-Vereinsbank, and J.P.
Morgan Chase.

     For the nine months ended September 30, 2004, the aggregate compensation of
the members of the supervisory board amounted to approximately (euro)2.1
million. According to German law, compensation of supervisory board members
requires shareholder approval. Compensation for the Celanese supervisory board
was approved at the June 15, 2004 annual general meeting of shareholders and
remains in effect on the date of this annual report.


                                       87



     The following table shows the compensation paid to individual members of
the supervisory board who were active on the board during the nine months ended
September 30, 2004.

                        COMPENSATION OF SUPERVISORY BOARD



                                                                    VARIABLE
                                                    OTHER CASH       ANNUAL          TOTAL
                                 FIXED ANNUAL      REMUNERATION   REMUNERATION   REMUNERATION
NAME                         REMUNERATION (EURO)    (EURO) (1)       (EURO)         (EURO)
---------------------------------------------------------------------------------------------

Dr. Bernd Thiemann**                47,656             28,000               0         75,656
   Chairman
Reiner Nause                        68,009             32,000         128,768        228,777
   Deputy Chairman
Saad Ali Al-Shuwaib*                21,180              4,000          39,401         64,581
Dr. Hanswilhelm Bach                45,339             20,000          52,861        118,200
Ralf Becker                         45,339             20,000           5,170         70,509
Hans-Jurgen Brinkman                45,339             20,000          52,861        118,200
Chin E. Chu**                       24,159              8,000               0         32,159
Armin Droth                         45,339             20,000         119,072        184,411
Cornelius Geber**                   22,670             14,000               0         36,670
Alan R. Hirsig*                     21,180              8,000         136,388        165,568
Dr. Joannes C. M. Hovers*           21,180              8,000         135,798        164,978
Benjamin J. Jenkins**               24,159             14,000               0         38,159
Dr. Gunter Metz*                    42,361             24,000         236,852        303,213
Dr. Hanns Ostmeier**                23,662             14,000               0         37,662
Herbert Schmalz                     45,339             20,000          20,292         85,631
Dr. Ron Sommer**                    21,511             14,000               0         35,511
Dr. Alfons Titzrath*                21,180             10,000         135,737        166,917
Kendrick R. Wilson III*             21,180              6,000         135,444        162,624
---------------------------------------------------------------------------------------------
                                   606,782            284,000       1,198,644      2,089,426
=============================================================================================


(1)  Compensation for supervisory board meetings and committee memberships for
     January 1, 2004 to September 30, 2004.

*    Member of the supervisory board until May 7, 2004.

**   Appointed as a member of the supervisory board by the Konigstein local
     court (Amtsgericht) during May 2004.


                                       88



     The table below shows the number of stock appreciation rights exercised
during the nine months ended September 30, 2004. No stock appreciation rights
remain outstanding for members of the Supervisory Board as of September 30,
2004.

                           STOCK APPRECIATION RIGHTS



-------------------------------------------------------------------------------------------------------------------
                                 GRANTED IN THE NINE
                                     MONTHS ENDED          EXERCISED IN THE NINE MONTHS    TOTAL RIGHTS HELD AS OF
                                SEPTEMBER 30, 2004 (1)       ENDED SEPTEMBER 30, 2004         SEPTEMBER 30, 2004
                             ---------------------------   ----------------------------   -------------------------
NAME                         NUMBER   GRANT PRICE (EURO)   NUMBER   EARNINGS (EURO) (2)   NUMBER   VALUE (EURO) (3)
-------------------------------------------------------------------------------------------------------------------

Dr. Bernd Thiemann **             0           0.00             0                 0          0              0
   Chairman
Reiner Nause                  2,350          28.93         8,900           128,768          0              0
   Deputy Chairman
Saad Ali Al-Shuwaib *         1,600          28.93         2,955            39,401          0              0
Dr. Hanswilhelm Bach          1,600          28.93         3,750            52,861          0              0
Ralf Becker                     408          28.93           408             5,170          0              0
Hans-Jurgen Brinkman          1,600          28.93         3,750            52,861          0              0
Chin E. Chu **                    0           0.00             0                 0          0              0
Armin Droth                   1,600          28.93         8,600           119,072          0              0
Cornelius Geber **                0           0.00             0                 0          0              0
Alan R. Hirsig *              1,600          28.93         9,650           136,388          0              0
Dr. Joannes C. M. Hovers *    1,600          28.93         9,650           135,798          0              0
Benjamin J. Jenkins **            0           0.00             0                 0          0              0
Dr. Gunter Metz *             3,150          28.93        17,100           236,852          0              0
Dr. Hanns Ostmeier **             0           0.00             0                 0          0              0
Herbert Schmalz               1,600          28.93         1,600            20,292          0              0
Dr. Ron Sommer **                 0           0.00             0                 0          0              0
Dr. Alfons Titzrath *         1,600          28.93         9,650           135,737          0              0
Kendrick R. Wilson III *      1,600          28.93         9,650           135,444          0              0
-------------------------------------------------------------------------------------------------------------------
                             20,308                       85,663         1,198,644          0              0
===================================================================================================================


(1)  Compensation of the supervisory board has been changed in 2004 to a fixed
     cash compensation only. For the fiscal year 2003, stock appreciation rights
     had been granted in 2004.

(2)  Income from exercise are included in compensation of the supervisory board
     as variable compensation.

(3)  All stock appreciation rights have been exercised by the members of the
     supervisory board in 2004.

*    Supervisory Board member until May 7, 2004.


                                       89



Board of Management

     The aggregate amount of compensation paid during the nine months ended
September 30, 2004 to the members of the Celanese board of management was
(euro)8.6 million. The aggregate amount accrued by Celanese during the nine
months ended September 30, 2004 to provide pension, retirement and similar
benefits for the members of the board of management was (euro)14 million.

     The following table shows the compensation expense for the individual
members of the board of management who were active on the board as of September
30, 2004.

                      TOTAL COMPENSATION EXPENSE TABLE (1)



-----------------------------------------------------------------------------------------------------
                                                                                       TOTAL CASH
NAME AND PRINCIPAL POSITION                  FIXED SALARY (EURO)   BONUS (EURO)   COMPENSATION (EURO)
-----------------------------------------------------------------------------------------------------

Claudio Sonder (2)                                  722,500          1,605,400         2,327,900
   Chairman of the Board
David Weidman (4)                                   525,000            630,000         1,155,000
   Vice Chairman & Chief Operating Officer
Perry Premdas                                       404,759          3,106,591         3,511,350
   Chief Financial Officer
Lyndon Cole                                         385,000            450,000           835,000
   Member of Board of Management
Andreas Pohlmann                                    360,000            414,000           774,000
   Chief Administrative Officer
-----------------------------------------------------------------------------------------------------
                                                  2,397,259          6,205,991         8,603,250
=====================================================================================================


(1)  Disclosure of compensation in accordance with German Commercial Code.

(2)  Included in Mr. Sonder's compensation is an accrued amount of
     (euro)858,400, which he will receive upon termination of his contract on
     October 31, 2004.

(3)  Included in Mr. Premdas' compensation is an accrued amount of
     (euro)2,644,880, which he will receive upon termination of his contract on
     October 31, 2004.

(4)  Member of the board of management until October 31, 2004.

                                       90



     The table below shows the number of stock options held by the board of
management as of September 30, 2004. All stock appreciation rights and most of
the stock options had been exercised by September 30, 2004.

                          INCENTIVE COMPENSATION TABLE



-------------------------------------------------------------------------------------------
                                             STOCK APPRECIATION RIGHTS (SAR) (1)
-------------------------------------------------------------------------------------------
                                                               NUMBER OF
                                                                 RIGHTS
                                                             EXERCISED FOR
                                                                THE NINE
                                                                 MONTHS          EARNINGS
                                                                 ENDED             FROM
                                   NUMBER                    SEPTEMBER 30,     EXERCISE OF
NAME AND PRINCIPAL POSITION         HELD     VALUE (EURO)         2004        RIGHTS (EURO)
---------------------------        ------   --------------   -------------   --------------

Claudio Sonder..................      0            0            363,500          5,375,705
   Chairman of the Board
David Weidman...................      0            0            144,000          1,995,475
   Vice Chairman & Chief
   Operating Officer
Perry Premdas...................      0            0            188,500          2,745,382
   Chief Financial Officer
Lyndon Cole.....................      0            0             25,000            318,250
   Member of Board of Management
Andreas Pohlmann................      0            0             45,450            655,653
   Chief Administrative Officer
                                    ---          ---            -------         ----------
                                      0            0            766,450         11,090,465
                                    ===          ===            =======         ==========


-----------------------------------------------------------------------------------------
                                                    STOCK OPTIONS (1)(2)
-----------------------------------------------------------------------------------------
                                                                NUMBER OF
                                                              STOCK OPTIONS
                                                              EXERCISED FOR     EARNINGS
                                                                 THE NINE         FROM
                                                               MONTHS ENDED   EXERCISE OF
                                    NUMBER                    SEPTEMBER 30,      STOCK
NAME AND PRINCIPAL POSITION          HELD     VALUE (EURO)        2004          OPTIONS
---------------------------        -------   --------------   -------------   -----------

Claudio Sonder..................    90,000      1,908,900              0              0
   Chairman of the Board
David Weidman...................    55,000      1,166,550              0              0
   Vice Chairman & Chief
   Operating Officer
Perry Premdas...................         0              0         43,000        909,880
   Chief Financial Officer
Lyndon Cole.....................    15,000        318,150              0              0
   Member of Board of Management
Andreas Pohlmann................    13,000        275,730              0              0
   Chief Administrative Officer
                                   -------      ---------         ------        -------
                                   173,000      3,669,330         43,000        909,880
                                   =======      =========         ======        =======


(1)  No stock appreciation rights or stock options were granted to the board of
     management in 2004.

(2)  The stock options were valued based on their intrinsic value as of
     September 30, 2004.

Board Service Agreements

     Celanese AG has entered into service agreements with the members of its
board of management as follows:

     Mr. Jakobsmeier has entered into a service agreement with Celanese AG,
pursuant to which he receives (i) a base salary that is established based on a
comparative analysis of base salaries paid within a selected peer group of
international companies; and (ii) an annual bonus dependent on achieving the
economic and personal objectives he agrees upon with the personnel and
compensation committee of the supervisory board. At present, such objectives
pertain to operating profit and trade working capital of Celanese on a
consolidated basis. 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 and could account for up to 80 percent of base salary, or up to 160
percent of base salary if all targets were significantly exceeded.

     Drs. Cole and Pohlmann have each entered into a service agreement with
Celanese AG and an employment agreement with Celanese Corporation. The service
agreements with Celanese AG cover their duties as members of the Celanese board
of management; however, their compensation is governed by their employment
agreements with Celanese Corporation. Pursuant to their agreements with Celanese
Corporation, Drs. Cole and Pohlmann are entitled to an annual base salary
$650,000 for Dr. Pohlmann and $700,000 for Dr. Cole and are eligible to earn an
annual bonus targeted at 80 percent of base salary. In the event that either of
these persons is terminated without cause (as defined in the agreement) or if he
resigns for good reason (as defined in the agreement) he will be entitled to,
subject to continued compliance with the restrictive covenants described below,
(i) continued payment of base salary and target bonus for one year and (ii) a
pro rata bonus for the year of termination, based on actual Company performance.
The executives will be subject to customary confidentiality, intellectual
property and non-disclosure covenants. In addition, the executives will be
subject to noncompetition and nonsolicitation provisions during the term of
employment and for a period of one year thereafter.

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


                                       91



INCENTIVE PLANS

     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 gave 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 which could be granted
was 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 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. There were 7,500 rights granted under this plan which remain outstanding
as of September 30, 2004.

     Celanese board of management members and senior executives worldwide
participated in two long-term incentive plans, which gave 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 were identical to the equity
participation plan, except that they did 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
(euro) 16.37 per share. At October 25, 1999, approximately 2.4 million stock
appreciation rights were awarded to 168 employees, of which 8,650 remain
outstanding as of September 30, 2004. 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
(euro) 19.56 per share. At January 15, 2001, approximately 2 million stock
appreciation rights were awarded to 170 employees, of which 8,500 remain
outstanding as of September 30, 2004.

     Under all three plans, every right entitled 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*. Following a
change in control of Celanese, the stock appreciation rights can be exercised
during a period of six months irrespective of whether Celanese's share price has
outperformed the median of the performance of the share prices of the peer
group. As Celanese Europe Holdings' acquisition of Celanese constituted a change
in control under the plans, the performance hurdles described in this paragraph
were waived from April 6 to October 5, 2004. Thereafter, the stock appreciation
rights can be exercised provided that the performance hurdles are reached and
the shares are still traded on the Frankfurt Stock Exchange.

     At the Annual General Meeting of Celanese on May 15, 2002, shareholders
approved the 2002 Celanese Stock Option Plan (the "2002 Plan"). The 2002 Plan
authorized the issuance of up to 1.25 million options to purchase shares of
common stock. Options were granted at an exercise price reflecting the reference
price (twenty day average of market price prior to grant date) plus a 20 percent
premium and become exercisable five years from the date of grant. Two year
vesting was possible, if the market price per share outperformed the median
performance of Celanese's competitors as defined in the plan 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 percent higher than the reference price at the time of the grant, the
holder is entitled to receive a cash payment equal to the original exercise
premium of 20 percent. The plan documents governing the 2002 Plan do not contain
any provisions dealing with a change in control of Celanese. Therefore the legal
terms of the stock options were not affected by the successful consummation of
the Tender Offer. On July 8, 2002, 1.1 million stock options were awarded to 140
employees at an exercise price of (euro) 27.54 per share and a reference price
of (euro) 22.95 per share. These stock options vested on July 8, 2004. At
September 30, 2004, 467,950 options remained unexercised. On January 31, 2003,
0.1 million stock options were awarded to 13 additional employees at an exercise
price of (euro) 23.78 per share and a reference price of (euro) 19.82 per share,
76,800 of which remained outstanding as of September 30, 2004.

     For additional information related to incentive plans, see Note 22 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.


                                       92



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 specific 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,
if 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.

     Under the Domination Agreement, Celanese Europe Holding has the right to
instruct the board of management to take actions and transact business, even if
such actions or transactions are disadvantageous to Celanese, provided they are
in the interest of Celanese Europe Holding or companies affiliated with Celanese
Europe Holding and Celanese. Although by law the supervisory board is not bound
by such instructions and is entitled to approve or reject any action requiring
its approval, Celanese Europe Holding can effectively overrule the supervisory
board's decision by issuing a second instruction. For additional information,
see Item 4. Information on the Company - Acquisition of Celanese.

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 fide
vote 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 that 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 3,000 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.


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     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 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."

     On May 7, 2004, Saad ali Al-Shuwaib, Alfons Titzrath, Gunter Metz, Kendrick
R. Wilson, III, Alan Hirsig, and Joannes Hovers, shareholder representatives on
the supervisory board, resigned from the supervisory board. After the Konigstein
local court (Amtsgericht) appointed Messrs. Chu, Jenkins, Thiemann, Ostmeier,
Sommer and Geber as shareholder representatives, the supervisory board appointed
new shareholder representatives to the standing committees of the supervisory
board on June 2, 2004. Celanese shareholders confirmed the court-appointed
representatives at the June 15 annual meeting. In May 2000, Celanese's employees
in Germany elected 10 representatives to the supervisory board. Six of these
representatives took office immediately; the other four 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. Ralf Sikorski resigned his
position on September 15, 2003. As no alternate had been chosen for him, the
board of management requested the Konigstein local court (Amtsgericht) to
appoint a replacement in accordance with Section 104 of the Stock Corporation
Act (Aktiengesetz). The court appointed Ralf Becker to the Supervisory Board on
September 30, 2003. New elections for employee representatives are expected to
take place during the first quarter of 2005.

     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
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 product 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 four times during calendar
year 2004. The members of the finance and audit committee until May 7, 2004
were: Alfons Titzrath (Chairman), Hanswilhelm Bach, Hans-Jurgen Brinkmann,
Gunter Metz, and Kendrick R. Wilson, III. Messrs. Titzrath, Metz and Wilson were
replaced by Hanns Ostmeier (Chairman), Cornelius Geber, and Bernd Thiemann on
June 2, 2004. See also "Item 16A. Audit Committee Financial Expert," and "Item
16C. Principal Accountant Fees and Services".

     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 has reviewed 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


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supervisory board. The members of the personnel and compensation committee until
May 7, 2004 were: Gunter Metz (Chairman), Alan Hirsig, and Reiner Nause. Messrs.
Metz and Hirsig were replaced by Bernd Thiemann (Chairman) and Hanns Ostmeier on
June 2, 2004. The personnel and compensation committee met four times during
calendar year 2004.

     Strategy Committee. The strategy committee reviewed the strategy for
Celanese presented to it by the board of management. It kept itself informed
about developments and trends in the industries in which Celanese is active.
Members of the strategy committee until May 7, 2004 were: Alan Hirsig
(Chairman), Saad Ali Al-Shuwaib, Joannes Hovers, Gunter Metz, Reiner Nause,
Herbert Schmalz and Ralf Becker. Messrs. Hirsig, Al-Shuwaib, Hovers and Metz
were replaced by Chinh Chu (Chairman), Benjamin Jenkins, Ron Sommer, and Bernd
Thiemann on June 2, 2004. The strategy committee did not meet during 2004 and
was dissolved on December 6, 2004.

     Post-Tender Offer Committee. The supervisory board also established an ad
hoc tender offer committee on December 15, 2003 to ensure that the supervisory
board was kept fully informed of all matters connected with the Tender Offer. It
was renamed the Post-Tender Offer Committee on June 2, 2004 when it expanded its
responsibilities to include the Domination Agreement. The members of this
committee until May 7, 2004 were: Gunter Metz (Chairman), Rainer Nause, and
Alfons Titzrath. Messrs. Metz and Titzrath were replaced by Bernd Thiemann
(Chairman) and Hanns Ostmeier on June 2, 2004. This committee met ten times
during calendar year 2004 and was dissolved on December 6, 2004.

EMPLOYEES

     As of September 30, 2004, Celanese had approximately 9,050 employees
worldwide from continuing operations, compared to 9,500 as of December 31, 2003.
This represents a decrease of approximately 5 percent. Celanese had
approximately 5,250 employees in North America, 3,600 employees in Europe, 150
employees in Asia and 50 employees in the rest of the world. Approximately 5,500
employees, mostly in North America, were transferred out of Celanese as a result
of the Recent Restructuring on October 5, 2004. The following table sets forth
the approximate number of employees on a continuing basis as of the nine months
ended September 30, 2004 and the year ended December 31, 2003.

                                               EMPLOYEES AS OF   EMPLOYEES AS OF
                                                SEPTEMBER 30,      DECEMBER 31,
                                               ---------------------------------
                                                     2004              2003
                                                    -----             -----
North America ..............................        5,250             5,600
   thereof USA .............................        3,750             4,000
   thereof Canada ..........................          400               400
   thereof Mexico ..........................        1,100             1,200
Europe .....................................        3,600             3,600
   thereof Germany .........................        3,000             3,000
Asia .......................................          150               200
Rest of World ..............................           50               100
                                                    -----             -----
Total Celanese Employees ...................        9,050             9,500
                                                    =====             =====

     Many of Celanese's employees are unionized, particularly in Germany,
Brazil, Belgium and France. However, less than one quarter of Celanese's former
employees in the United States were 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 workers' 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.


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SHARE OWNERSHIP

     As of September 30, 2004, members of the supervisory board and board of
management of Celanese did not own any Celanese ordinary shares. All of the
Celanese ordinary shares held by members of the supervisory board and board of
management were either tendered into the Tender Offer or otherwise sold.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

     The capital stock of Celanese consists of ordinary shares, no par value
(Stuckaktien), 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 fur 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.

     The table below sets forth, as of March 29, 2005, the number of Celanese
ordinary shares held by holders of more than 5 percent of Celanese ordinary
shares and their percentage ownership based on 49,881,618 Celanese ordinary
shares outstanding as of September 30, 2004:

Identity of Person or Group             Shares Owned   Percent
---------------------------             ------------   -------
Celanese Europe Holding GmbH & Co. KG    42,230, 885    84.66%
Paulson & Co. Inc.*                        5,508,788    11.05%

     As of September 30, 2004, Celanese had approximately 13,500 shareholders.
Approximately 1,300 of these shareholders were U.S. holders. Based on the share
register, it is estimated that eight percent of Celanese outstanding shares were
held by U.S. holders as of this date. Unregistered positions, those
shareholdings held by depository banks on behalf of unregistered shareholders,
totaled 5 million shares or 10 percent of shares outstanding as of the nine
months ended September 30, 2004.

     On June 22, 2004, Celanese entered into the Domination Agreement with its
majority shareholder, Celanese Europe Holding, pursuant to which Celanese AG
agreed to submit itself to the direction of, and to transfer its entire profits
to, Celanese Europe Holding, and Celanese Europe Holding agreed to compensate
Celanese for any annual losses (Jahresfehlbetrag) incurred while the Domination
Agreement is in effect. The Domination Agreement was approved by shareholders at
an extraordinary general meeting held on July 30-31, 2004. The Domination
Agreement was registered in the commercial register on August 2, 2004 and became
operative on October 1, 2004. For more information see Domination and Profit and
Loss Transfer Agreement in Item 4. Information on the Company - Acquisition of
Celanese.

RELATED PARTY TRANSACTIONS

     As part of Celanese's cash management strategy, affiliates invest surplus
funds with Celanese AG. These balances were (euro) 80 million and (euro) 79
million at September 30, 2004 and December 31, 2003, respectively. As of March
24, 2005, short-term borrowings from affiliates were (euro) 91 million. Interest
rates on these borrowings were adjusted on a short-term basis to reflect market
conditions. The weighted average annual interest rates on these borrowings were
2.0 percent for the nine months ended September 30, 2004 as well as for the year
ended December 31, 2003.

     Other than the Domination Agreement and except as noted in this section,
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

----------
*According to Paulson & Co. Inc.'s report to the German Federal Supervisory
Authority for Securities Trading (Bundesaufsichtsamt fur den Wertpapierhandel)
on February 2, 2005., they beneficially owned 10.05 percent of 54,790,369
outstanding shares. This amount includes treasury shares.


                                       96



interest. Except as noted in this section, 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.

     Celanese holds two intercompany notes of Celanese Europe Holding, one
having a principal amount of approximately (euro) 291 million, representing the
fair market value of CAC, and the other having a principal amount of
approximately (euro) 677 million, representing a receivable for intercompany
debt with CAC that was transferred from Celanese AG to Celanese Europe Holding.
Each of these notes bears interest at the rate of 4.67 percent per annum.
Celanese also holds an intercompany note of BCP Acquisition GmbH & Co. KG, the
parent of Celanese Europe Holding, in the principal amount of approximately
(euro) 66 million. This amount also represents a receivable for intercompany
debt with CAC that was transferred from Celanese AG to BCP Acquisition GmbH &
Co. KG. This note bears interest at the rate of 5.5 percent per annum. Dresdner
Bank and its subsidiaries provided various financial and investment advisory
services to Celanese in 2003, for which they were paid reasonable and customary
fees. Alfons Titzrath, who had been Chairman of the supervisory board of
Dresdner Bank until May 2002, was a shareholder representative on Celanese AG's
supervisory board from 1999 to 2004. See also Item 4 - Information on the
Company - Acquisition of Celanese.

     Celanese entered into an agreement with Goldman, Sachs & Co. oHG, an
affiliate of Goldman, Sachs & Co., on December 15, 2003 (the "Goldman Sachs
Engagement Letter"), pursuant to which Goldman Sachs acted as its financial
advisor in connection with the Tender Offer. Pursuant to the terms of the
Goldman Sachs Engagement Letter, Celanese AG paid Goldman Sachs a financial
advisory fee equal to (euro) 11,000,000 and a discretionary bonus of
(euro) 4,000,000. Celanese AG has agreed to reimburse Goldman Sachs for all its
reasonable expenses and to indemnify Goldman Sachs and related persons for all
direct damages arising in connection with the Goldman Sachs Engagement Letter.
Kendrick R. Wilson, III, Vice Chairman - Investment Banking of Goldman Sachs,
was a shareholder representative on Celanese's supervisory board from 1999 to
2004.

ITEM 8. FINANCIAL INFORMATION

     See "Item 18. Financial Statements" and pages F-1 through F-69 for
Consolidated Financial Statements and Other Financial Information.

EXPORT SALES

     During the nine months ended September 30, 2004, approximately (euro) 263
million or 24 percent of all U.S. sales and approximately (euro) 571 million or
56 percent of all German 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. See also Note 25 to the Consolidated
Financial Statements.

     Plumbing Actions

     CNA Holdings, along with Shell, DuPont and others, have been the defendants
in a series of lawsuits, including a number of class actions, alleging that
plastics manufactured by these companies that were utilized in the production of
plumbing systems for residential property were defective or caused such plumbing
systems to fail. Based on, among other things, the findings of outside experts
and the successful use of Ticona's acetal copolymer in similar applications, CNA
Holdings does not believe Ticona's acetal copolymer was defective or caused the
plumbing systems to fail. In many cases CNA Holdings' exposure may be limited by
invocation of the statute of limitations since Ticona ceased selling the acetal
copolymer for use in the plumbing systems in site built homes during 1986 and in
manufactured homes during 1990. As CNA Holdings was transferred out of Celanese
as a part of the Recent Restructuring, Celanese will no longer bear liability
for these matters.

     Sorbates Antitrust Actions

     In 1998, Nutrinova, 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


                                       97



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 $36 million, payable over five years, with the last payment of $5
million being paid in June 2004. Hoechst also agreed to cooperate with the U.S.
Federal 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.

     Nutrinova and Hoechst have cooperated with the European Commission since
1998 in connection with matters relating to the sorbates industry. In May 2002,
the European Commission informed Hoechst of its intent to officially investigate
the sorbates industry, and in early January 2003, the European Commission served
Hoechst, Nutrinova and a number of competitors with a statement of objections
alleging unlawful, anticompetitive behavior affecting the European sorbates
market. In October 2003, the European Commission ruled that Hoechst, Chisso
Corporation, Daicel Chemical Industries Ltd., The Nippon Synthetic Chemical
Industry Co. Ltd. and Ueno Fine Chemicals Industry Ltd. operated a cartel in the
European sorbates market between 1979 and 1996. The European Commission imposed
a total fine of (euro) 138.4 million, of which (euro) 99 million was assessed
against Hoechst. The case against Nutrinova was closed. The fine against Hoechst
is based on the European Commission's finding that Hoechst does not qualify
under the leniency policy, is a repeat violator and, together with Daicel, was a
co-conspirator. In Hoechst's favor, the European Commission gave a discount for
cooperating in the investigation. Hoechst appealed the European Commission's
decision in December 2003, and that appeal is still pending.

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

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

     Although the outcome of the foregoing proceedings and claims cannot be
predicted with certainty, we believe that any resulting liabilities, net of
amounts recoverable from Hoechst, will not, in the aggregate, have a material
adverse effect on our financial position, but may have a material adverse effect
on the results of operations or cash flows in any given period. 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

     Celanese International Corporation v. China Petrochemical Development
Corporation--Taiwan Kaohsiung District Court. In February 2001, Celanese
International Corporation, then an indirect, wholly-owned subsidiary of
Celanese, filed a private criminal action for patent infringement against China
Petrochemical Development Corporation, or CPDC, alleging that CPDC infringed
Celanese's patent covering the manufacture of acetic acid. This criminal action
was subsequently converted to a civil action alleging damages against CPDC based
on a period of infringement of 5 years, 1996-2000, and based on CPDC's own data
and as reported to the Taiwanese securities and exchange commission. Celanese's
patent was held valid by the Taiwanese Patent Office. As Celanese


                                       98



International Corporation was transferred out of Celanese as part of the Recent
Restructuring, this action, which is still pending, will no longer be reported
by Celanese.

     Shareholder Litigation

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

     o    Mayer v. Celanese AG

     o    Knoesel v. Celanese AG

     o    Allerthal Werke AG and Dipl.-Hdl. Christa Gotz v. Celanese AG

     o    Carthago Value Invest AG v. Celanese AG

     o    Prof. Dr. Ekkehard Wenger v. Celanese AG

     o    Jens-Uwe Penquitt & Claus Deiniger Vermogensverwaltung GbR v. Celanese
          AG

     o    Dr. Leonhard Knoll v. Celanese AG

     o    B.E.M. Borseninformations- und Effektenmanagement GmbH v. Celanese AG

     o    Protagon Capital GmbH v. Celanese AG

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

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

     Further, on August 2, 2004, two minority shareholders instituted public
register proceedings with the Konigstein local court (Amtsgericht) and the
Frankfurt district court, both with a view to have the registration of the
Domination Agreement in the Commercial Register deleted
(Amtsloschungsverfahren). These actions are based on an alleged violation of
procedural requirements at the extraordinary general meeting, an alleged
undercapitalization of the Celanese Europe Holdings and its related entities at
the time of the tender offer and an alleged misuse of discretion by the
competent court with respect to the registration of the Domination Agreement in
the commercial register.

     Based upon information available as of the date of this annual report, the
outcome of foregoing proceedings cannot be predicted with certainty. The time
period to bring forward these challenges has expired.

     The amounts of the fair cash compensation (Abfindung) and of the guaranteed
fixed annual payment (Ausgleich) offered under the Domination Agreement may be
increased in special award proceedings (Spruchverfahren) initiated by minority
shareholders. Several minority shareholders of Celanese had initiated special
award proceedings seeking the court's review of the amounts of the fair cash
compensation (Abfindung) and of the guaranteed fixed annual payment (Ausgleich)
offered under the Domination Agreement. However, the court dismissed all of
these proceedings in March 2005 on the grounds of inadmissability. The dismissal
is subject to appeal.

     Other Matters

     Celanese Ltd. and/or CNA Holdings, Inc., both of which were our U.S.
subsidiaries as of September 30, 2004, are defendants in approximately 800
asbestos cases. Because many of these cases involve numerous plaintiffs, we are
subject to claims significantly in excess of the number of actual cases. As both
Celanese Ltd. and CNA Holdings


                                       99



were transferred out of Celanese in the Recent Restructuring, Celanese will no
longer bear liability for these matters.

DIVIDEND POLICY

     Dividend. At the annual shareholders' meeting on June 15, 2004, Celanese
shareholders approved payment of a dividend for the fiscal year ended December
31, 2003 of (euro) 0.12 per share. For the short fiscal year ended September 30,
2004, Celanese will not be able to pay a dividend to its shareholders. As part
of the preparation of the financial statements for the fiscal year ended
September 30, 2004, Celanese conducted a valuation of its assets, which resulted
in a further non-cash impairment charge to the value of CAC as of September 30,
2004. Due to the size of this charge, Celanese does not have any distributable
retained earnings, which will prevent it from declaring a dividend to its
shareholders for the short fiscal year 2004. Any minority shareholder of
Celanese who elects not to sell its shares to Celanese Europe Holding in
connection with the offer to the minority shareholders will, unless a
squeeze-out is effected, be entitled to remain a shareholder of Celanese and to
receive the guaranteed fixed annual payment on its shares, in lieu of any future
dividends for any fiscal years commencing after September 30, 2004, as long as
the Domination Agreement remains in effect.

     The amount of the guaranteed fixed annual payment to be paid to any
minority shareholder who elects to retain its shares was based on an analysis of
the fair enterprise value of Celanese as of the date of the relevant
shareholders' meeting on July 30 - 31, 2004, assuming a full distribution of
profits. According to the Domination Agreement, the gross guaranteed fixed
annual payment is (euro) 3.27 per share less certain corporate taxes. See Item
4. Acquisition of Celanese - Domination and Profit and Loss Transfer Agreement.

SIGNIFICANT CHANGES

     As part of the Recent Restructuring, Celanese transferred all of the
outstanding shares in CAC to Celanese Europe Holding for an unsecured note in an
amount equal to CAC's fair market value of (euro) 291 million. Celanese Europe
Holding then transferred all outstanding capital stock of CAC to BCP Caylux for
(euro) 291 million in partial satisfaction of a loan owing to BCP Caylux. In
addition, CPO, a wholly owned subsidiary of Celanese AG, which acted as a
purchasing agent on behalf of Celanese as well as third parties, was transferred
to Celanese Europe Holding. This transfer was made equal to CPO's fair market
value of (euro) 13 million. As a result of these transfers, Celanese AG now
serves primarily as the holding company for the European business and certain
Asian businesses of Celanese Corporation, the ultimate parent of Celanese Europe
Holding and Celanese AG.

     As a result of the Recent Restructuring, CAC is no longer a wholly owned
subsidiary of Celanese AG; therefore, CAC's term notes, pollution control bonds,
variable rate term loan payable to BCP Caylux and a portion of the capital
leases are no longer obligations of Celanese AG. Since the Recent Restructuring,
Celanese AG and its subsidiaries have no longer been named parties under the
credit facilities entered into by Celanese Americas Corporation in connection
with the Tender Offer. As of September 30, 2004, Celanese AG had net
intercompany notes with consolidated subsidiaries, which were eliminated in
consolidation. As part of the Recent Restructuring, these intercompany notes
were replaced with unsecured notes with non-consolidated affiliates for
approximately (euro) 1 billion. These unsecured notes bear interest at 4.67
percent per annum and mature in 2009.

     CAC had a trade receivable securitization program, which allowed
participating operating subsidiaries to sell up to $120 million ((euro) 97
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 AG maintains an investment grade debt rating.
As of September 30, 2004, Celanese AG was in the process of renegotiating the
trade receivable securitization program and therefore there were no outstanding
sales of receivables under this program for the nine months ended September 30,
2004. Due to the Recent Restructuring, this program has been terminated.

     Celanese had outstanding letters of credit amounting to (euro) 143 million
at September 30, 2004, which were reduced to (euro) 25 million after the Recent
Restructuring. Celanese also had operating lease commitments of (euro) 166
million at September 30, 2004, which was reduced to (euro) 111 million after the
Recent Restructuring. Additionally, Celanese had (euro) 700 million under
take-or-pay contracts at September 30, 2004, which were reduced to (euro) 574
million after the Recent Restructuring.

     As this is a transaction between entities under common control, the
transfer of CAC and CPO will be recorded as a deemed dividend to Celanese Europe
Holding at the historical cost net book value of CAC and CPO which will,


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upon finalization of the adjustments associated with the transfer, be reflected
as a net reduction in shareholders' equity. Management is in the process of
determining the potential impact of the transfers on the Company's financial
statements. The transfer of CPO is not expected to have a material effect on the
Company's financial position or results of operations and cash flows.

     In addition to the transfers of CAC and CPO, in December 2004, Celanese
approved a plan to dispose of the cyclo-olefin copolymer ("COC") business
included within the Technical Polymers Ticona segment and its interest in Pemeas
GmbH, the fuel cell joint venture included in the Other Activities segment. As a
result of this decision, Celanese recorded an impairment loss of (euro) 25
million related to the COC business during the three months ended December 31,
2004. The operating loss for COC was (euro) 31 million for the year ended
December 31, 2003 and (euro) 22 million for the nine months ended September 30,
2004. The operating loss for the fuel cell business was (euro) 10 million for
the year ended December 31, 2003 and (euro) 6 million for the nine months ended
September 30, 2004. The Company also expects that in the three months ended
December 31, 2004, equity in net earnings of affiliates will include a (euro) 9
million charge, representing Celanese AG's portion of restructuring charges
recorded by its European oxo chemicals joint venture. In March 2005, Celanese
received (euro) 56 million for an early contractual settlement of receivables
related to the sale in 2000 of its 50% interest in the Vinnolit Kunstoff GmbH
venture. The majority of the cash to be received is expected to be recognized as
a gain during the three months ended March 31, 2005.

     Subsequent to September 30, 2004, Celanese Corporation, Celanese's ultimate
parent completed an initial public offering of its Series A common stock. The
offering of Series A common stock was made concurrently with the offering of
shares of Celanese Corporation's preferred stock. In contemplation of this
initial public offering, in December 2004, Celanese Corporation approved a stock
incentive plan for executive officers, key employees and directors, a deferred
compensation plan for executive officers and key employees as well as other
management incentive programs. Celanese anticipates recording expense of
(euro) 10 million related to the new compensation plans during the three months
ended December 31, 2004. (See also Item 4. Information on the Company -
Acquisition of Celanese and Note 30 to the Consolidated Financial Statements).

ITEM 9. THE OFFER AND LISTING

NATURE OF TRADING MARKET

     Celanese shares are listed on the Frankfurt Stock Exchange and trade under
the symbol "CZZ", under the German securities code number (Wertpapierkennnummer)
575 300 and under the International Securities Identification Number DE
0005753008. Since the Celanese shares are in registered form, they may be traded
in the United States without a depositary receipt facility. Celanese shares were
delisted from the New York Stock Exchange on June 2, 2004. Since then, Celanese
shares traded over the counter in the United States. Because the shares are not
traded on an organized exchange, trading tends to be less frequent, which could
result in a lack of liquidity for the shares.

     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 Borse 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
2003. As of September 30, 2004, the equity securities of 6,087 corporations,
including 5,270 foreign corporations, were traded on the Frankfurt Stock
Exchange.

     Trading on the floor of the Frankfurt Stock Exchange begins every business
day at 9:00 a.m. and ends at 5:00 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 Borse.
Trading may be conducted only by banks and securities dealers who have been
admitted to trading on at least one German stock exchange. Trading


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through the Xetra system takes place from 9:00 a.m. to 5:00 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 fur 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 must meet higher, internationally accepted transparency
standards, such as financial reporting in accordance with an internationally
accepted financial reporting standard, in addition to the German legal
requirements. Celanese withdrew from the Prime Standard segment on August 12,
2004.

     Celanese shares were included in the M-DAX index from March 20, 2000 to
June 20, 2004. 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.

     The tables below set forth, for the periods indicated, the high and low
sales prices on the Xetra System for Celanese ordinary shares from January 1,
2000, as reported by that exchange.


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                                                                PRICE PER
                                                             ORDINARY SHARE
                                                             --------------
                                                               HIGH    LOW
                                                              -----   -----
                                                               (IN (EURO))
                                                              -------------
Annual Highs and Lows
2000......................................................    25.25   16.50
2001......................................................    28.00   14.91
2002......................................................    27.75   15.70
2003......................................................    32.61   12.51
2004 (January 1 through September 30).....................    45.24   31.43

Quarterly Highs and Lows
2003
   First Quarter..........................................    22.52   12.51
   Second Quarter.........................................    22.10   15.70
   Third Quarter..........................................    31.88   20.52
   Fourth Quarter.........................................    32.61   25.99
2004
   First Quarter .........................................    33.95   31.43
   Second Quarter.........................................    44.00   33.25
   Third Quarter..........................................    45.24   43.26
2005
   First Quarter (October 1 through December 31, 2004)....    45.90   43.90
   Second Quarter (January 1 through March 29, 2005)......    50.90   45.13

                                                                PRICE PER
                                                             ORDINARY SHARE
                                                             --------------
                                                               HIGH    LOW
                                                              -----   -----
                                                               (IN (EURO))
                                                              -------------
Monthly Highs and Lows
2004
   September..............................................    44.85   44.00
   October................................................    45.50   43.90
   November...............................................    45.90   44.54
   December...............................................    45.70   45.00
2005
   January................................................    47.44   45.13
   February (through March 29, 2005)......................    49.89   45.50

     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, 2004 and September 30, 2004 was 4,583 on the Frankfurt Stock Exchange
and 87,065 on Xetra.

     On March 29, 2005 the closing sales price per Celanese ordinary share on
the Xetra System was (euro) 46.10, which was equivalent to U.S.$59.53 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.


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ITEM 10. ADDITIONAL INFORMATION

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
Konigstein 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.

     However, under the Domination Agreement that became effective on October 1,
2004, the Board of Management may be compelled to take actions that are
disadvantageous to Celanese if the board of management is instructed to do so by
Celanese Europe Holding, and provided that such instructions are in the interest
of Celanese Europe Holding or its affiliates. The board of management may only
refuse to comply with any such instruction, if, at the time such instruction is
given, (i) it is, in the opinion of the board of management of Celanese,
obviously not in the interests of Celanese Europe Holding or its affiliates,
(ii) in the event of a disadvantageous instruction, the negative consequences to
Celanese are disproportionate to the benefits to Celanese Europe Holding or its
affiliates, (iii) compliance with the instruction would violate legal or
statutory restrictions, (iv) compliance with the instruction would endanger the
existence of Celanese; or (v) it is doubtful whether Celanese Europe Holding
will be able to fully compensate Celanese, as required by the Domination
Agreement, for its annual loss (Jahresfehlbetrag) incurred during the fiscal
year in which such instruction is given. The supervisory board is not bound by
instructions issued by Celanese Europe Holding under the Domination Agreement.
If Celanese Europe Holding instructs the board of management to take an action
that requires the supervisory board's approval and such approval is not given,
the board of management nevertheless has to comply with such instruction if
Celanese Europe Holding repeats it.

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 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


                                      104



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, which explicitly
precludes the granting of such loans. 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.

Ordinary Shares

     The share capital of Celanese AG consists of (euro) 140,069,354 divided
into 54,790,369 ordinary shares of no par value issued in registered form, of
which 4,908,751 ordinary shares are held by the company as treasury stock as of
September 30, 2004. 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 registrar services GmbH, as transfer agent and
registrar in Germany and by Mellon Investor Services as transfer agent and
registrar in the United States.

     Celanese AG also has (euro) 6,391,148 in contingent capital. The contingent
capital may only be used to grant stock options to members of the board of
management and other senior managers of Celanese AG and its subsidiaries.
Celanese does not expect to issue any further stock options.

Dividends

     Pursuant to the Domination Agreement, minority shareholders receive a
guaranteed fixed annual payment on their shares, in lieu of any future dividends
for the fiscal years starting after September 30, 2004. The amount of the
guaranteed fixed annual payment to be paid to any minority shareholder who
elects to retain his or her shares was based on an analysis of the fair
enterprise value of Celanese as of the date of the shareholders' meeting on July
30 - 31, 2004, assuming a full distribution of profits. The gross guaranteed
fixed annual payment is (euro) 3.27 per share less certain corporate taxes. See
Item 8. Financial Information - Dividend Policy

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:

     o    Changing the objects and purposes provision in the articles of
          association,

     o    Capital decreases,

     o    Capital increases in the form of authorized and conditional capital,

     o    Excluding preemptive rights of shareholders to subscribe for new
          shares,

     o    Dissolution,


                                      105



     o    A merger into, or a consolidation with, another stock corporation, and

     o    A transfer of all or virtually all of the assets.

     Celanese Europe Holding, through its 84 percent voting power at any
Celanese shareholders' meeting, has the ability to approve all of the above
items.

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.

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


                                       106



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 Ubernahmegesetz), 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 have a negative impact on 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.

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 fur 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.


                                       107



     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, entered into a Master Purchase Agreement with Clariant
International AG 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 ((euro) 147 million) and
closed on December 31, 2002. For further information on the acquisition, see
"Item 4. Information on the Company - Acquisitions and Divestitures", as well as
Note 7 to the Consolidated Financial Statements.

     In connection with the Tender Offer, in April 2004 Celanese Americas
Corporation or CAC, at the time a wholly owned subsidiary of Celanese AG, became
a party to credit facilities whereby substantially all of the assets of CAC and
its U.S. subsidiaries, as well as 65 percent of the shares of foreign
subsidiaries directly owned by CAC are pledged and/or mortgaged as collateral to
third party lenders. These facilities were refinanced and the aggregate
principal amount was increased to approximately $1,985 million ((euro) 1,527
million) in January 2005. CAC and its U.S. subsidiaries have access to
approximately $608 million ((euro) 490 million) under these credit facilities.
CAC also borrowed $359 million ((euro) 289 million) from BCP Caylux, an indirect
parent of Celanese Europe Holding at a variable rate, a portion of which was
used to repay $175 million ((euro) 140 million) of debt, scheduled to mature in
2005 and 2008, and (euro) 48 million of additional debt scheduled to mature in
2009. The $359 million ((euro) 289 million) from BCP Caylux was also used to
prefund pension obligations. As of September 30, 2004, approximately 94 percent
of the long-term borrowings above are denominated in U.S. dollars, with the
remaining amounts denominated in euros. (See Note 30). BCP Crystal may, at its
discretion, designate Celanese AG or any of its subsidiaries a borrower if BCP
Crystal under these credit facilities.

EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

     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 (euro) 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
(euro) 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 (euro) 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.

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


                                       108



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 2004 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 2004 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 2004 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.

     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


                                       109



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 fur 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
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.


                                       110



     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 15 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 (Vermogensteuer)

     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 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 Investor 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
Securities Exchange Act of 1934, as amended, or the 1934 Act, from the proxy
rules and the short-swing profit recovery provisions of Section 16 of the 1934
Act.

     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 801 Brickell Ave., Suite 1800, Miami, FL 33131, 175 W. Jackson
Boulevard, Suite 900, Chicago, IL 60604, 1801 California Street, Suite 1500,
Denver, CO 80202-2656, 5670 Wilshire Boulevard, 11th Floor, Los Angeles, CA
90036-3648 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.


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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 September 30, 2004. The information is presented
in euro equivalents, which is Celanese's reporting currency, at September 30,
2004 exchange rates.

                      INTEREST-RATE RISK MANAGEMENT - DEBT
                PRINCIPAL (NOTIONAL) AMOUNT BY EXPECTED MATURITY
                              AVERAGE INTEREST RATE
                               SEPTEMBER 30, 2004



                                                                                              FAIR VALUE
                                                                                            SEPTEMBER 30,
                                    2005   2006   2007   2008   2009   THEREAFTER   TOTAL       2004
                                   -----   ----   ----   ----   ----   ----------   -----   -------------
                                                 (IN (EURO) MILLIONS, EXCEPT PERCENTAGES)
                                   ----------------------------------------------------------------------

DEBT, INCLUDING CURRENT PORTION
Fixed rate (U.S. dollar) .......    13.1    0.6   8.7    0.7    11.9     149.6      184.6       182.6
Average interest rate ..........     6.3%   9.0%  5.5%   9.0%    7.2%      6.4%        --          --
Variable rate (U.S. dollar) ....     2.8     --    --     --      --     286.8      289.6       289.6
Average interest rate ..........     2.4%    --    --     --      --       3.7%        --          --
Fixed rate (euro) ..............     3.9   23.0   0.1    0.1     0.1       0.7       27.9        27.9
Average interest rate ..........     4.8%   4.8%  7.5%   7.5%    7.5%      7.5%                    --
Variable rate (euro) ...........    82.6    1.5   0.9    0.2      --        --       85.2        85.2
Average interest rate ..........     2.3%   2.9%  3.4%   3.4%     --                   --          --
Other currencies ...............     0.1     --    --     --      --        --        0.1         0.1
   TOTAL .......................   102.5   25.1   9.7    1.0    12.0     437.1      587.4       585.4


     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 September 30, 2004. 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 September 30, 2004.

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 September 30, 2004. 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 approximately (euro) 498 million notional amount of foreign currency forward
contracts outstanding in various currencies at September 30, 2004. There were no
foreign currency options outstanding as of September 30, 2004.


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                                                    AVERAGE
                                      CONTRACT     CONTRACTUAL     FAIR VALUE
                                       AMOUNT        FORWARD      SEPTEMBER 30,
CURRENCY PAIRS                       BUY (SELL)   EXCHANGE RATE       2004
--------------                       ----------   -------------   -------------
                                       (IN (EURO) MILLIONS, EXCEPT FOR AVERAGE
                                          CONTRACTUAL FORWARD EXCHANGE RATE)
                                     ------------------------------------------
FOREIGN CURRENCY FORWARD CONTRACTS

EURO
U.S. dollar.......................     (449.9)         1.2166          12.1
Japanese yen......................       (2.1)       122.3180           1.1
British pound.....................      (10.2)         0.6832           0.1
Canadian dollar...................       27.1          1.5745           0.2
Australian dollar.................        0.8          1.7210           0.0
Swedish Krona.....................       (7.6)         9.0560           0.0

     Most of the foreign currency forward contracts are currency swaps entered
into to hedge inter-company loans.

COMMODITY RISK MANAGEMENT

     Celanese recognized losses of (euro) 1 million, (euro) 3 million and less
than (euro) 1 million from natural gas swap contracts during the nine months
ended September 30, 2004 and the years ended December 31, 2003 and 2002,
respectively. The effective portion of unrealized gains and losses associated
with the cash-settled swap contracts was (euro) 0 million, (euro) 0 million and
(euro) 1 million at September 30, 2004 and December 31, 2003 and 2002,
respectively, which are recorded as a component of accumulated other
comprehensive income (loss) until the underlying hedged transactions are
reported in earnings. Celanese did not have any open commodity swaps as of
September 30, 2004. Celanese had open swaps with a notional amount of (euro) 4
million as of December 31, 2003.

     The following measures are taken to avoid and manage risks in the purchase
of raw materials:

     o    Celanese avoids supply problems generally 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.

     o    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 on its own
ordinary shares 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 (euro) 16.37 per share and an
average premium of (euro) 3.16 per share. The total premium as of December 31,
1999 was (euro) 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 (euro) 16.37 per share
and an average premium of (euro) 6.46 per share. The total premium as of
December 31, 2000 was (euro) 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.
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 (euro) 19.56 per share and an average
premium of (euro) 4.39 per share. The options allow settlement in cash only.
These options expired during 2003. As a result, a net loss of (euro)1 million
was recorded to


                                       113



interest and other income, net in 2003. See "Item 6. Directors, Senior
Management and Employees - Compensation of Directors and Officers - Incentive
Plans."

     After canceling 1,125,000 of its treasury stock at the end of 2002,
Celanese repurchased an additional 284,798 shares in 2002 and 749,848 shares in
2003. Any further share repurchases by Celanese will be consistent with its
overall financial priorities at the time. See "Item 5. Operating and Financial
Review and Prospects - Market Risks")

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

     Not applicable.

                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

     None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS

     We hereby incorporate information called for by this item by reference to
our Form 6-K filed on June 23, 2004. See also Item 4. Information on the Company
- Acquisition of Celanese - Domination and Profit and Loss Transfer Agreement.

ITEM 15. CONTROLS AND PROCEDURES

     In 2004, certain members of our accounting staff identified two significant
deficiencies in internal controls in the computation of certain accounting
adjustments. These deficiencies were discovered in addition to, and separate
from, the evaluation process we are conducting in connection with Section 404 of
the Sarbanes-Oxley Act of 2002, or Section 404, which is further described
below. The first deficiency was identified during the quarter ended June 30,
2004 by members of our corporate financial reporting group and related to the
qualifications and ability of certain accounting managers to initially calculate
the change from the LIFO (last-in, first-out) method of accounting for
inventories to FIFO (first-in, first-out) and the resulting failure of such
employees to correctly make such calculations. The second was identified during
the quarter ended June 30, 2004 by one of our financial accounting managers and
related to an omitted employee benefit accrual due to the failure to provide the
applicable employment contracts to the actuary prior to the cut-off date for the
December 31, 2003 pension valuation. Corrective actions taken by us included an
internal audit review, the development of enhanced guidelines, the termination
and reassignment of responsible persons and an elevation of the issues to the
supervisory board. The significant deficiencies noted were identified and
corrected in the quarter ended September 30, 2004 and thus did not exist as of
September 30, 2004.

     On March 30, 2005, KPMG, our independent auditors, informed us that they
had identified a material weakness of our parent, Celanese Corporation, which
may have an affect on Celanese. This weakness was determined in the course of
the audit of Celanese Corporation's consolidated financial statements for the
nine months ended December 31, 2004. The weakness related to conditions
preventing our adequately researching, documenting, reviewing and concluding on
accounting and reporting matters which resulted in adjustments that had to be
recorded to prevent our consolidated financial statements from being materially
misleading. The conditions largely related to significant increases in the
frequency of, and the limited amount of time and technical accounting resources
available to address, complex accounting matters and transactions and to prepare
Celanese Corporation's simultaneous debt and equity offerings during the
year-end closing process. We are taking steps to ensure that adequate time is
made available for company personnel to adequately research, document, review
and conclude on accounting and reporting matters. These initiatives have
materially affected or are reasonably likely to affect our internal controls
over financial reporting.

     On September 28, 2004, 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


                                       114



Celanese's Chief Executive Officer (CEO), and its Chief Financial Officer (CFO).
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. There was no evidence of 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 over financial reporting or in other factors that
could significantly affect internal controls subsequent to the date of the
evaluation.

     Beginning with the fiscal year ending September 30, 2006, Section 404 will
require us to include an internal control report of management with our annual
report on Form 20-F. The internal control report must contain (1) a statement of
management's responsibility for establishing and maintaining adequate internal
control over financial reporting for us, (2) a statement identifying the
framework used by management to conduct the required evaluation of the
effectiveness of our internal control over financial reporting, (3) management's
assessment of the effectiveness of our internal control over financial reporting
as of the end of our most recent fiscal year, including a statement as to
whether or not our internal control over financial reporting is effective, and
(4) a statement that our independent auditors have issued an attestation report
on management's assessment of our internal control over financial reporting.

     In connection therewith, we are currently performing the system and process
evaluation and testing required (and any necessary remediation) in an effort to
comply with management certification and auditor attestation requirements of
Section 404. In the course of our ongoing Section 404 evaluation, we have
identified areas of internal controls that may need improvement, and plan to
design enhanced processes and controls to address these and any other issues
that might be identified through this review. Currently, none of the identified
areas that need improvement have been categorized as significant deficiencies or
material weaknesses, individually or in the aggregate. However, as we are still
in the evaluation process, we may identify conditions that may result in
significant deficiencies or material weaknesses in the future.

     We cannot be certain as to the timing of completion of our evaluation,
testing and any remediation actions or the impact of the same on our operations.
If we are not able to implement the requirements of Section 404 in a timely
manner or with adequate compliance, our independent auditors may not be able to
certify as to the effectiveness of our internal control over financial reporting
and we may be subject to sanctions or investigation by regulatory authorities,
such as the Commission. As a result, there could be a negative reaction in the
financial markets due to a loss of confidence in the reliability of our
financial statements. In addition, we may be required to incur costs in
improving our internal control system and the hiring of additional personnel.
Any such action could negatively affect our results.

     We expect to incur expenses in an aggregate of approximately (euro) 2.5
million to (euro) 4 million in the 2005 fiscal year in connection with our
compliance with Section 404.

ITEM 16. RESERVED

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

     In the past, the Supervisory Board had determined that Alfons Titzrath
qualified as the financial expert of its finance and audit committee in
accordance with the Commission's rules in connection with the Sarbanes-Oxley Act
of 2002. Since Mr. Titzrath's resignation on May 7, 2004, the finance and audit
committee has not had a financial expert. On December 6, 2004, the Supervisory
Board determined that, since Celanese AG is no longer a New York Stock Exchange
listed company and since German law does not require the finance and audit
committee to have such a financial expert, it was not necessary to nominate a
financial expert in accordance with the Commission's rules in connection with
the Sarbanes-Oxley Act of 2002.

ITEM 16B. CODE OF ETHICS AND GOVERNANCE MATTERS

     Celanese's Global Business Conduct Policy or BCP sets forth universal rules
of conduct for company management, including the Chief Executive Officer, Chief
Financial Officer, and Chief Accounting Officer, as well as for all employees.
The policy requires employees and management to act honestly and ethically in
all their dealings, and promotes 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


                                       115



laws, rules and regulations. Violations of the BCP may be subject to severe
disciplinary action, up to and including termination of employment. Various help
lines have been established so that every Celanese employee, regardless of where
the employee works, can contact a regional coordinator directly in the event
that he or she would like to voice policy concerns or report policy
infringements or risks affecting Celanese. All Celanese management and employees
receive periodic BCP training, either electronically or in person, and
management as well as a majority of Celanese employees must certify annually in
writing that they have read, understood, and are in compliance with the BCP.
During the first nine months of 2004, Celanese did not make any amendments to,
or waivers from, the BCP relating to its Chief Executive Officer or senior
financial officers. The BCP can be found on Celanese's website at
www.celanese.com.

     Celanese currently communicates its governance standards internally and
externally. Celanese has a link on corporate governance issues on its Internet
website at http://www.celanese.com/index/celanese_ag/governance.htm. This site
provides information about Celanese's corporate governance practices, such as
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.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft or KPMG has served as Celanese's independent
auditor for the nine months ended September 30, 2004 and for each of the years
ended December 31, 2003 and December 31, 2002 and, for which audited financial
statements appear in this annual report. The independent auditor is selected
each year at the Annual General Meeting. Celanese's supervisory board will
propose to the Annual General Meeting to be held on May 19, 2005 that KPMG be
selected as the independent auditor for the 2005 fiscal year.

     In the annual meeting held on June 15, 2004, our shareholders appointed
KPMG Deutsche Treuhand-Gesellschaft AG Wirtschaftsprufungsgesellschaft (KPMG),
Frankfurt am Main, to serve as our independent auditors for the 2004 short
fiscal year. KPMG billed the following fees for professional services during the
nine months ended September 30, 2004 and the year ended December 31, 2003:

                    FOR THE NINE
                    MONTHS ENDED           FOR THE YEAR
                   SEPTEMBER 30,              ENDED
TYPE OF FEES            2004            DECEMBER 31, 2003
-------------   --------------------   --------------------
                ((euro) in millions)   ((euro) in millions)
Audit                   2.1                   2.8
Audit-Related            .4                    .1
Tax                      .6                    .4
All Other                --                    .5
                        ---                   ---
Total                   3.1                   3.8
                        ===                   ===

     Audit fees are the aggregate fees billed by KPMG for the audit of our
consolidated and annual financial statements, reviews of interim financial
statements and attestation services that are provided in connection with
statutory and regulatory filings or engagements. Audit-Related fees are those
charged by KPMG for assurance and related services that are reasonably related
to the performance of the audit or review of our financial statements and are
not reported under Audit fees. This category comprises fees billed for the audit
of employee benefit plans and pension schemes, agreed-upon procedure engagements
and other attestation services subject to regulatory requirements, as well as
advisory services associated with financial reporting. Tax fees are fees for
professional services rendered by KPMG for tax compliance, tax advice on actual
or contemplated transactions and expatriate employee tax services. Fees
disclosed under the category "All Other" are mainly related to the review of
selected documentation in connection with the implementation of the SAP system.
This category also includes training and other immaterial support services.


                                       116



PRE-APPROVAL POLICIES AND PROCEDURES OF THE FINANCE AND AUDIT COMMITTEE

     The finance and audit committee of Celanese's supervisory board, among
other things, is responsible for monitoring the independent auditors and their
work. In particular it:

     o    Prepares the proposal of the supervisory board concerning the
          selection of the independent auditors by the annual general meeting;

     o    Reviews the independent auditors' engagement letter, including
          proposed fees;

     o    Defines the scope of the independent audit as well as key areas to be
          audited;

     o    Reviews the independent auditors' significant findings and
          recommendations together with the board of management's response; and

     o    Regularly reviews the independent auditors' quality control systems
          and oversees their independence.

     For more information on the finance and audit committee, see "Item 6.
Directors, Senior Management and Employees - Board Practices".

     In accordance with the Sarbanes-Oxley Act, the finance and audit committee
must approve all audit and non-audit services provided by KPMG.

     In December 2003, the finance and audit committee approved the following
non-audit services to be provided by KPMG during 2004, as well as the work
processes needed to control and monitor them:

     o    Continuing SAS 100 quarterly reviews that commenced in 2003;

     o    Continue to review selected documentation in connection with the
          implementation of the SAP system;

     o    Tax planning;

     o    Tax compliance (primarily Canada, Mexico and Belgium);

     o    Pre-approval for due diligence procedures related to merger and
          acquisition candidates (assurance and tax planning); and

     o    Assistance with documentation of functional area process controls in
          preparation of the certification process pursuant to Section 404 of
          the Sarbanes-Oxley Act.

     In December 2004, the finance and audit committee approved the following
non-audit services to be provided by KPMG during fiscal year 2005, as well as
the work processes needed to control and monitor them:

     o    Continuing SAS 100 quarterly reviews that commenced in 2003;

     o    Continue to review selected documentation in connection with the
          implementation of the SAP system;

     o    Tax planning;

     o    Tax compliance;

     o    Pre-approval for due diligence procedures related to merger and
          acquisition candidates (assurance and tax planning); and

     o    Assistance with documentation of functional area process controls in
          preparation of the certification process pursuant to Section 404 of
          the Sarbanes-Oxley Act.

     o    Tax preparation for expatriate employees

     o    Due diligence procedures related to identified and unidentified merger
          and acquisition candidates (assurance and tax planning).

     In reference to the tax preparation for expatriate employees, Celanese is
in the process of transitioning these services from KPMG to another third party
service provider.

                                    PART III

ITEM 17. FINANCIAL STATEMENTS

     Not applicable.


                                       117



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
     Wirtschaftsprufungsgesellschaft, are filed as part of this annual report:

     Report of the Board of Management
     Index to Consolidated Financial Statements
     Report of Independent Registered Public Accounting Firm
     Consolidated Financial Statements:
        Consolidated Statements of Operations for the Nine Months Ended
           September 30, 2004 and September 30, 2003 (unaudited) and the Years
           Ended December 31, 2003 and 2002
        Consolidated Balance Sheets as of September 30, 2004 and December 31,
           2003
        Consolidated Statements of Shareholders' Equity for the Nine Months
           Ended September 30, 2004 and the Years Ended December 31, 2003 and
           2002
        Consolidated Statements of Cash Flows for the Nine Months Ended
           September 30, 2004 and September 30, 2003 (unaudited) and the Years
           Ended December 31, 2003 and 2002
        Notes to the Consolidated Financial Statements
     Schedule II - Valuation and Qualifying Accounts

     Other 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

     2.1  Form of Definitive Stock Certificate of Celanese AG (filed as Exhibit
          4.1 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
          (filed as Exhibit 4.1 to Celanese's Annual Report on Form 20-f for the
          year ended December 31, 2002, and incorporated herein by reference.)

     4.2  English translation of Domination and Profit and Loss Transfer
          Agreement, dated as of June 22, 2004, between BCP Crystal Acquisition
          GmbH & Co. KG, as the dominating company, and Celanese AG, as
          dominated company.

     4.3  English translation of Service Agreement between Celanese AG and Peter
          Jakobsmeier, dated as of November 1, 2004

     4.4  English translation of Service Agreement between Celanese AG and
          Lyndon Cole, effective as of November 1, 2004

     4.5  English translation of Service Agreement between Celanese AG and
          Andreas Pohlmann effective as of November 1, 2004

     4.6  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.

     8.1  Significant subsidiaries as of the end of the fiscal year covered by
          this annual report: See Significant Subsidiaries in "Item 4.
          Information on the Company."

     11.1 Celanese Global Business Conduct Policy.

     12.1 Certification of the Chief Executive Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.

     12.2 Certification of the Chief Financial Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.

     13.1 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.

     13.2 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.

     23.1 Consent of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
          Wirtschaftsprufungsgesellschaft.


                                       118



                                   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: MARCH 30, 2005


                                      By: /s/ Andreas Pohlmann
                                          --------------------------------------
                                      Name: Andreas Pohlmann
                                      Title: Chairman of the Board of Management


                                      By: /s/ Peter Jakobsmeier
                                          --------------------------------------
                                      Name: Peter Jakobsmeier
                                      Title: Member of the Board of Management
                                      and Chief Financial Officer


                                       119



                        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 Celanese in the interests of its stockholders
and in awareness of its responsibility towards employees and society. We manage
the resources entrusted to us 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 Wirtschaftspruefungsgesellschaft 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, January 27, 2005
The Board of Management


/s/ Andreas Pohlmann
-------------------------
Andreas Pohlmann


/s/ Lyndon Cole   /s/ Peter Jakobsmeier
---------------   ---------------------
Lyndon Cole       Peter Jakobsmeier


                                       F-1



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



                                                                                   Page
                                                                                   ----

CONSOLIDATED FINANCIAL STATEMENTS

   Report of Independent Registered Public Accounting Firm......................    F-3
   Consolidated Statements of Operations for the Nine Months Ended September
      30, 2004 and 2003 (unaudited) and the Years Ended December 31, 2003 and
      2002......................................................................    F-5
   Consolidated Balance Sheets as of September 30, 2004 and December 31, 2003...    F-6
   Consolidated Statements of Shareholder's Equity for the Nine Months Ended
      September 30, 2004 and the Years Ended December 31, 2003 and 2002.........    F-8
   Consolidated Statements of Cash Flows for the Nine Months Ended September
      30, 2004 and 2003 (unaudited) and the Years Ended December 31, 2003 and
      2002......................................................................    F-9
   Notes to Consolidated Financial Statements...................................   F-10
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
   Schedule II - Valuation and Qualifying Accounts..............................   F-70



                                       F-2



            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCCOUNTING FIRM

To the Supervisory Board
Celanese AG:

          We have audited the accompanying consolidated balance sheets of
Celanese AG and subsidiaries ("Celanese") as of September 30, 2004 and December
31, 2003, and the related consolidated statements of operations, shareholders'
equity, and cash flows for the nine months ended September 30, 2004 and the
years ended December 31, 2003 and 2002. 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 the standards of the Public
Company Accounting Oversight Board (United States). 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 September 30, 2004 and December 31, 2003 and the results of its
operation and its cash flows for the nine months ended September 30, 2004 and
the years ended December 31, 2003 and 2002 in conformity with U.S. generally
accepted accounting principles. 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.

          The accompanying consolidated statements of operations and cash flows
for the nine months ended September 30, 2003, were not audited by us and,
accordingly, we do not express an opinion on them.

          As discussed in Note 4 to the consolidated financial statements,
Celanese changed from using the last-in, first-out or LIFO method of determining
cost of inventories for its US subsidiaries to the first-in, first-out or FIFO
method.

          As discussed in Note 4 to the consolidated financial statements,
Celanese adopted Financial Accounting Standards Board Interpretation No. 46
(Revised), "Consolidation of Variable Interest Entities - an interpretation of
ARB No. 51", effective December 31, 2003.

          As discussed in Note 4 to the consolidated financial statements,
Celanese adopted Statement of Financial Accounting Standards ("SFAS") No. 143,
"Accounting for Asset Retirement Obligations", effective January 1, 2003.

          As discussed in Note 4 to the consolidated financial statements,
Celanese adopted SFAS No. 142, "Goodwill and Other Intangible Assets", effective
January 1, 2002.

          As discussed in Note 4 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.


                                       F-3



          As discussed in Note 20 to the consolidated financial statements,
Celanese changed the actuarial measurement date for its Canadian and U.S.
pension and other postretirement benefit plans in 2003 and 2002, respectively.

Frankfurt am Main, Germany
January 28, 2005, except for
paragraph six of Note 30 which
is as of March 30, 2005


KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftspruefungsgesellschaft



                                       F-4



                          CELANESE AG AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                 NINE MONTHS ENDED SEPTEMBER 30,           YEARS ENDED DECEMBER 31,
                                                         ----------------------------------------------   --------------------------
                                                               2004               2004          2003         2003         2002
                                                         ----------------      ----------   -----------   ----------   ----------
                                                          (IN $ MILLIONS                    (UNAUDITED)
                                                         EXCEPT FOR SHARE
                                                           AND PER SHARE
                                                             DATA) (1)      (IN (EURO) MILLIONS EXCEPT FOR SHARE AND PER SHARE DATA)
                                                         ----------------   --------------------------------------------------------

Net sales ............................................           3,789              3,051        3,103         4,075        4,064
Cost of sales ........................................          (3,077)            (2,478)      (2,592)       (3,435)      (3,359)
Selling, general and administrative expenses .........            (410)              (330)        (345)         (451)        (474)
Research and development expenses ....................             (70)               (56)         (59)          (79)         (69)
Special charges:
   Insurance recoveries associated with plumbing
      cases ..........................................               4                  3           94            94           --
   Sorbates antitrust matters ........................              --                 --          (84)          (84)          --
   Restructuring, impairment and other special
      charges ........................................            (180)              (145)          (3)          (15)           5
Foreign exchange gain (loss) .........................              (1)                (1)          (3)           (3)           4
Gain on disposition of assets ........................               2                  2            4             5           12
                                                            ----------         ----------   ----------    ----------   ----------
      Operating profit ...............................              57                 46          115           107          183
Equity in net earnings of affiliates .................              47                 38           26            31           22
Interest expense .....................................             (34)               (27)         (32)          (43)         (59)
Interest and other income, net .......................              57                 46           70            82           44
                                                            ----------         ----------   ----------    ----------   ----------
      Earnings from continuing operations before tax
         and minority interests ......................             127                103          179           177          190
Income tax provision .................................            (237)              (191)         (55)          (48)         (59)
                                                            ----------         ----------   ----------    ----------   ----------
      Earnings (loss) from continuing operations
         before minority interests ...................            (110)               (88)         124           129          131
Minority interests ...................................              --                 --           --            --           --
                                                            ----------         ----------   ----------    ----------   ----------
      Earnings (loss) from continuing operations .....            (110)               (88)         124           129          131
Earnings (loss) from discontinued operations:
   Loss from operation of discontinued operations ....              (5)                (4)          (6)           (2)         (45)
   Gain (loss) on disposal of discontinued
      operations .....................................              12                 10           (3)            6           14
   Income tax benefit ................................              15                 12            2            --           56
                                                            ----------         ----------   ----------    ----------   ----------
      Earnings (loss) from discontinued operations ...              22                 18           (7)            4           25
Cumulative effect of changes in accounting principles,
   net of income tax of (euro)1 million and (euro)5
     million in 2003 and 2002, respectively ..........              --                 --           (1)           (1)          19
                                                            ----------         ----------   ----------    ----------   ----------
      Net earnings (loss) ............................             (88)               (70)         116           132          175
                                                            ==========         ==========   ==========    ==========   ==========
Earnings (loss) per common share - basic:
      Continuing operations ..........................           (2.23)             (1.78)        2.51          2.61         2.60
      Discontinued operations ........................            0.45               0.36        (0.15)         0.08         0.50
      Cumulative effect of changes in accounting
         principles ..................................              --                 --        (0.02)        (0.02)        0.38
                                                            ----------         ----------   ----------    ----------   ----------
      Net earnings (loss) ............................           (1.78)             (1.42)        2.34          2.67         3.48
                                                            ==========         ==========   ==========    ==========   ==========
Weighted average shares - basic: .....................      49,401,898         49,401,898   49,487,911    49,445,958   50,329,346
Earnings (loss) per common share - diluted:
      Continuing operations ..........................           (2.23)             (1.78)        2.51          2.61         2.60
      Discontinued operations ........................            0.45               0.36        (0.15)         0.08         0.50
      Cumulative effect of changes in accounting
         principles ..................................              --                 --        (0.02)        (0.02)        0.38
                                                            ----------         ----------   ----------    ----------   ----------
      Net earnings (loss) ............................           (1.78)             (1.42)        2.34          2.67         3.48
                                                            ==========         ==========   ==========    ==========   ==========
Weighted average shares - diluted: ...................      49,401,898         49,401,898   49,487,911    49,457,145   50,329,436


(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. $1.2418 per
     (euro)1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

SEE THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       F-5



                          CELANESE AG AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS



                                                                                                AS OF DECEMBER 31,
                                                                         AS OF SEPTEMBER 30,   --------------------
                                                                                 2004              2004    2003
                                                                         -------------------      -----   ---------
                                                                         (IN $ MILLIONS) (1)   (IN (EURO) MILLIONS)
                                                                         -------------------   --------------------

ASSETS
Current assets:
   Cash and cash equivalents .........................................            276               222     117
   Receivables, net:
      Trade receivables, net - third party and affiliates ............            827               666     571
      Other receivables ..............................................            570               459     466
   Inventories .......................................................            565               455     404
   Deferred income taxes .............................................             67                54      53
   Other assets ......................................................             40                32      75
   Assets of discontinued operations .................................              5                 4     130
                                                                                -----             -----   -----
         Total current assets ........................................          2,350             1,892   1,816
                                                                                -----             -----   -----
Investments ..........................................................            555               447     444
Property, plant and equipment, net ...................................          1,492             1,202   1,354
Deferred income taxes ................................................            549               442     480
Other assets .........................................................            582               469     424
Goodwill .............................................................          1,074               865     849
Other intangible assets, net .........................................             28                23      28
                                                                                -----             -----   -----
         Total assets ................................................          6,630             5,340   5,395
                                                                                =====             =====   =====



                                       F-6



                          CELANESE AG AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)



                                                                                                               AS OF DECEMBER 31,
                                                                                        AS OF SEPTEMBER 30,   --------------------
                                                                                                2004              2004    2003
                                                                                        -------------------      -----   ---------
                                                                                        (IN $ MILLIONS) (1)   (IN (EURO) MILLIONS)
                                                                                        -------------------   --------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

   Short-term borrowings and current installments of
      long-term debt - third party and affiliates ...................................            127               102     117
   Accounts payable and accrued liabilities:
      Trade payables - third party and affiliates ...................................            577               465     468
      Other current liabilities .....................................................            755               608     727
   Deferred income taxes ............................................................             21                17      15
   Income taxes payable .............................................................            314               253     211
   Liabilities of discontinued operations ...........................................             11                 9      24
                                                                                               -----             -----   -----
         Total current liabilities ..................................................          1,805             1,454   1,562
                                                                                               -----             -----   -----

Long-term debt - third party and affiliate ..........................................            602               485     387
Deferred income taxes ...............................................................            106                85      79
Benefit obligations .................................................................          1,269             1,022     922
Other liabilities ...................................................................            469               378     387
Minority interests ..................................................................             35                28      14

Commitments and contingencies

Shareholders' equity:

   Common stock, no par value, (euro)140 million aggregate registered value;
      54,790,369 shares authorized and issued; 49,881,618 and 49,321,468 shares
      outstanding at September 30, 2004 and December 31, 2003, respectively .........            174               140     140
   Additional paid-in capital .......................................................          3,160             2,545   2,540
   Accumulated deficit ..............................................................           (119)              (96)    (20)
   Accumulated other comprehensive loss .............................................           (739)             (595)   (498)
                                                                                               -----             -----   -----
                                                                                               2,476             1,994   2,162
   Less: Treasury stock at cost (4,908,751 and 5,468,901 shares at
      September 30, 2004 and December 31, 2003, respectively) .......................            132               106     118
                                                                                               -----             -----   -----
      Total shareholders' equity ....................................................          2,344             1,888   2,044
                                                                                               -----             -----   -----
      Total liabilities and shareholders' equity ....................................          6,630             5,340   5,395
                                                                                               =====             =====   =====


(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. $1.2418 per
     (euro)1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

SEE THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       F-7



                          CELANESE AG AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 NINE MONTHS ENDED SEPTEMBER 30, 2004 AND YEARS
                        ENDED DECEMBER 31, 2003 AND 2002



                                                                                             ACCUMULATED
                                                                 ADDITIONAL                     OTHER                      TOTAL
                                                        COMMON     PAID-IN    ACCUMULATED   COMPREHENSIVE   TREASURY   SHAREHOLDERS'
                                                         STOCK     CAPITAL      DEFICIT     INCOME (LOSS)     STOCK        EQUITY
                                                        ------   ----------   -----------   -------------   --------   -------------
                                                                                    (IN (EURO) MILLIONS)
                                                        ----------------------------------------------------------------------------

Balance at December 31, 2001 ........................    143       2,508         (305)            (5)         (123)        2,218
Comprehensive income (loss), net of tax:
   Net earnings .....................................     --          --          175             --            --           175
   Other comprehensive income (loss):
      Unrealized gain on securities(1) ..............     --          --           --              2            --             2
      Foreign currency translation ..................     --          --           --           (174)           --          (174)
      Additional minimum pension liability(2) .......     --          --           --           (220)           --          (220)
      Unrealized loss on derivative contracts(3) ....     --          --           --             (5)           --            (5)
                                                                                                ----                       -----
      Other comprehensive loss ......................     --          --           --           (397)           --          (397)
                                                                                                                           -----
Comprehensive loss ..................................     --          --           --             --            --          (222)
Amortization of deferred compensation ...............     --           3           --             --            --             3
Settlement of demerger liability(4) .................     --           7           --             --            --             7
Purchase of treasury stock ..........................     --          --           --             --            (6)           (6)
Retirement of treasury stock ........................     (3)        (22)          --             --            25            --
                                                         ---       -----         ----           ----          ----         -----
Balance at December 31, 2002 ........................    140       2,496         (130)          (402)         (104)        2,000
                                                         ---       -----         ----           ----          ----         -----
Comprehensive income (loss), net of tax:
   Net earnings .....................................     --          --          132             --            --           132
   Other comprehensive income (loss):
      Unrealized gain on securities(1) ..............     --          --           --              3            --             3
      Foreign currency translation ..................     --          --           --           (114)           --          (114)
      Additional minimum pension liability(2) .......     --          --           --             10            --            10
      Unrealized gain on derivative contracts(3) ....     --          --           --              5            --             5
                                                                                                ----                       -----
      Other comprehensive loss ......................     --          --           --            (96)           --           (96)
                                                                                                                           -----
Comprehensive income ................................     --          --           --             --            --            36
Dividends ((euro) 0.44 per share) ...................     --          --          (22)            --            --           (22)
Amortization of deferred compensation ...............     --           5           --             --            --             5
Settlement of demerger liability(4) .................     --          39           --             --            --            39
Purchase of treasury stock ..........................     --          --           --             --           (14)          (14)
                                                         ---       -----         ----           ----          ----         -----
Balance at December 31, 2003 ........................    140       2,540          (20)          (498)         (118)        2,044
                                                         ---       -----         ----           ----          ----         -----
Comprehensive income (loss), net of tax:
   Net loss .........................................     --          --          (70)            --            --           (70)
   Other comprehensive income (loss):
      Unrealized gain on securities(1) ..............     --          --           --              3            --             3
      Foreign currency translation ..................     --          --           --             12            --            12
      Additional minimum pension liability(2) .......     --          --           --           (115)           --          (115)
      Unrealized gain on derivative contracts(3) ....     --          --           --              3            --             3
                                                                                                ----                       -----
      Other comprehensive loss ......................     --          --           --            (97)           --           (97)
                                                                                                                           -----
Comprehensive loss ..................................     --          --           --             --            --          (167)
Dividends ((euro) 0.12 per share) ...................     --          --           (6)            --            --            (6)
Amortization of deferred compensation................     --           2           --             --            --             2
Settlement of demerger liability(4) .................     --           2           --             --            --             2
Exercise of stock options funded by treasury stock...     --           1           --             --            12            13
                                                         ---       -----         ----           ----          ----         -----
Balance at September 30, 2004 .......................    140       2,545          (96)          (595)         (106)        1,888
                                                         ===       =====         ====           ====          ====         =====


(1)  Net of tax (benefit) expense of (euro) (1) million and (euro) 1 million in
     2002 and 2003 and (euro) 2 million for September 30, 2004.

(2)  Net of tax (benefit) expense of (euro) (118) million and (euro) 4 million
     in 2002 and 2003 and (euro) (74) million for September 30, 2004.

(3)  Net of tax (benefit) expense of (euro) (2) million and (euro) 3 million in
     2002 and 2003 and (euro) 1 million for September 30, 2004.

(4)  Net of tax expense of (euro) 29 million in 2003 and (euro) 1 million for
     September 30, 2004.

SEE THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       F-8



                          CELANESE AG AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                NINE
                                                                            MONTHS ENDED            YEARS ENDED
                                                                            SEPTEMBER 30,           DECEMBER 31,
                                                                    ---------------------------    ------------
                                                                     2004      2004       2003      2003   2002
                                                                     ----      ----       ----      ----   ----
                                                                                      (UNAUDITED)
                                                                     (IN $
                                                                   MILLIONS)
                                                                      (1)             (IN (EURO) MILLIONS)
                                                                   ---------  ----------------------------------

Operating activities from continuing operations:
   Net (loss) earnings ..........................................     (87)      (70)      116        132    175
   (Earnings) loss from discontinued operations, net ............     (22)      (18)        7         (4)   (25)
   Cumulative effect of changes in accounting principles.........      --        --         1          1    (19)
Adjustments to reconcile net earnings (loss) to net cash provided
   by operating activities:
      Special charges, net of amounts used ......................     132       106        41         78    (63)
      Stock based compensation ..................................       4         3        39         56      6
      Depreciation and amortization .............................     226       182       192        260    262
      Change in equity of affiliates ............................     (11)       (9)       (6)       (10)    47
      Deferred income taxes .....................................     166       134        21         68     (1)
      Gain on disposition of assets, net ........................      (1)       (1)       (8)        (9)   (12)
      Write-downs of investments ................................      --        --        --          4     15
      (Gain) loss on foreign currency ...........................     (10)       (8)       84        135    128
      Changes in operating assets and liabilities:
         Trade receivables, net - third party and affiliates ....    (109)      (88)      (31)        (5)   (94)
         Other receivables ......................................     (42)      (34)       31         20    (20)
         Inventories ............................................     (58)      (47)      (23)       (12)    12
         Trade payables - third party and affiliates ............     (10)       (8)      (66)       (37)     2
         Other liabilities ......................................    (211)     (170)      (91)      (144)   (11)
      Income taxes payable ......................................      48        39      (100)      (170)    (2)
      Other, net ................................................      22        18        (3)       (16)   (18)
                                                                     ----      ----      ----       ----   ----
      Net cash provided by operating activities .................      36        29       204        347    382
Investing activities from continuing operations:
      Capital expenditures on property, plant and  equipment ....    (153)     (123)     (120)      (185)  (214)
      Acquisitions of businesses and purchase of investment .....      --        --       (13)       (15)  (125)
      Net proceeds (outflow)  on sale of assets..................       6         5        10         10    (15)
      Net proceeds  from disposal of discontinued operations ....     138       111        --          8    201
      Proceeds from sale of marketable securities ...............     128       103       148        179    221
      Purchases of marketable securities ........................    (150)     (121)     (182)      (233)  (239)
      Distributions from affiliates .............................      --        --        --         --     41
      Other, net ................................................      --        --        (2)        (3)   (15)
                                                                     ----      ----      ----       ----   ----
      Net cash used in investing activities .....................     (31)      (25)     (159)      (239)  (145)
Financing activities from continuing operations:
      Short-term borrowings, net ................................       2         2         7        (17)  (154)
      Proceeds from long-term debt ..............................     370       298        --         50     57
      Payments of long-term debt ................................    (271)     (218)      (93)       (96)   (53)
      Proceeds from sale (purchase) of treasury stock ...........      15        12       (14)       (14)    (6)
      Issuance of preferred shares by consolidated subsidiary ...      17        14        --         --     --
      Dividend payments .........................................      (7)       (6)      (22)       (22)    --
                                                                     ----      ----      ----       ----   ----
      Net cash provided by (used in) financing activities .......     127       102      (122)       (99)  (156)
Exchange rate effects on cash ...................................      (1)       (1)       (5)       (10)    (8)
                                                                     ----      ----      ----       ----   ----
      Net increase (decrease) in cash and cash equivalents ......     130       105       (82)        (1)    73
      Cash and cash equivalents at beginning of period ..........     145       117       118        118     45
                                                                     ----      ----      ----       ----   ----
      Cash and cash equivalents at end of period ................     276       222        36        117    118
                                                                     ====      ====      ====       ====   ====
Net cash (used in) provided by discontinued operations:
      Operating activities ......................................    (138)     (111)        2        (10)    16
      Investing activities ......................................     138       111        (2)        10    (17)
      Financing activities ......................................      --        --        --         --     (2)
                                                                     ----      ----      ----       ----   ----
      Net cash used in discontinued operations ..................      --        --        --         --     (3)
                                                                     ====      ====      ====       ====   ====


(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. $1.2418 per (euro)
     1.00, the noon buying rate of the Federal Reserve Bank of New York on
     September 30, 2004.

SEE THE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       F-9



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

1.   DESCRIPTION OF THE COMPANY

     On October 22, 1999 (the "Effective Date"), Celanese AG and its
subsidiaries ("Celanese" or the "Company"), were demerged from Hoechst AG
("Hoechst") and became an independent publicly traded company. Subsequent to the
demerger, Hoechst merged with Rhone-Poulenc S.A. to form Aventis S.A.
("Aventis").

     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 four main business
segments: Chemical Products, Acetate Products, Technical Polymers Ticona
("Ticona") and Performance Products.

2.   ACQUISITION OF CELANESE

     During April 2004, Celanese Europe Holding GmbH & Co. KG, formerly known as
BCP Crystal Acquisition GmbH & Co. KG ("BCP" or "Purchaser), a German limited
partnership controlled by a group of investor funds advised by The Blackstone
Group, completed a voluntary public offer and acquired 84.3% of the outstanding
shares, excluding treasury shares, of Celanese AG for a price of (euro)32.50 per
share. At September 30, 2004, BCP owned 83.4% of the outstanding shares of
Celanese AG. Following the completion of the acquisition, the Celanese AG shares
were delisted from the New York Stock Exchange on June 2, 2004. Celanese AG
shares continue to trade on the Frankfurt Stock Exchange in Germany.

     At March 31, 2004, Celanese had (euro)144 million of net deferred tax
assets arising from U.S. net operating loss ("NOL") carryforwards. Under U.S.
tax law, the utilization of the deferred tax asset related to NOL carryforwards
is subject to an annual limitation if there is a more than 50 percentage point
change in shareholder ownership. The acquisition triggered this limitation and
it is expected to adversely affect the Company's ability to utilize its NOL
carryforwards. As a result, management has determined that it is not more likely
than not that the Company will be able to realize any of the deferred tax assets
attributable to its NOL carryforwards and recorded a valuation allowance of
(euro)144 million during the nine months ended September 30, 2004.

     A domination and profit and loss transfer agreement (the "Domination
Agreement") between Celanese AG and BCP became effective on October 1, 2004.
When the Domination Agreement became effective, BCP was obligated to offer to
acquire all outstanding Celanese AG shares from the minority shareholders of
Celanese in return for payment of fair cash compensation. The amount of this
fair cash compensation was determined to be (euro)41.92 per share, plus
interest, in accordance with applicable German law. Any minority shareholder who
elects not to sell its shares to BCP will be entitled to remain a shareholder of
Celanese and to receive from BCP a gross guaranteed fixed annual payment on
their shares of (euro)3.27 per Celanese AG share less certain corporate taxes in
lieu of any future dividend. Taking into account the circumstances and the tax
rates at the time of entering into the Domination Agreement, the net guaranteed
fixed annual payment is (euro)2.89 per share for a full fiscal year, which
commenced on October 1, 2004. The net guaranteed fixed annual payment may,
depending on applicable corporate tax rates, in the future be higher, lower or
the same as (euro)2.89 per share. The Domination Agreement cannot be terminated
by Celanese Europe Holding in the ordinary course of business until September
30, 2009.

     Also under the terms of the Domination Agreement, the Purchaser, as the
dominating entity, among other things, is required to compensate Celanese AG for
any annual loss incurred by Celanese AG, the dominated entity, on a
non-consolidated basis, at the end of the fiscal year when the loss was
incurred. This obligation to compensate Celanese AG for annual losses, on a
non-consolidated basis, determined in accordance with German accounting
regulations will apply during the entire term of the Domination Agreement. This
compensation is contingent upon BCP having adequate liquidity.

     In addition, BCP is entitled to give instructions directly to the
management board of Celanese AG, including, but not limited to, instructions
that are disadvantageous to Celanese AG, as long as such disadvantageous
instructions benefit BCP or the companies affiliated with either BCP or Celanese
AG. As a dominated company, Celanese AG may be affected by risks that affect BCP
and its affiliates, including, but not limited to, risks arising out of the debt
levels of some of these companies.

     In July 2004, the majority of Celanese's shareholders approved a change of
the Celanese fiscal accounting year to commence October 1st and end September
30th. As a result, Celanese's 2004 fiscal year ended on September 30, 2004.
Accordingly, the statements of operations and cash flows are presented for the
nine months ended September


                                      F-10



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

30, 2004 and for the years ended December 31, 2003 and 2002 on an audited basis
and for the nine months ended September 30, 2003 on an unaudited basis.

     The Domination Agreement is subject to legal challenges instituted by
dissenting shareholders. Minority shareholders have filed nine actions against
Celanese AG in the Frankfurt District Court (Landgericht), seeking, among other
things, to set aside the shareholder resolutions passed at the extraordinary
general meeting held on July 30 and 31, 2004 based, among other things, on the
alleged violation of procedural requirements and information rights of the
shareholders, to declare the Domination Agreement and the change in the fiscal
year void and to prohibit Celanese AG from performing its obligations under the
Domination Agreement. Pursuant to German law, the time period for the filing of
such challenges has expired. Further, several additional minority shareholders
have joined the proceedings via third party intervention in support of the
plaintiffs. The Purchaser has joined the proceedings via third party
intervention in support of Celanese AG. In addition, a German court could revoke
the registration of the Domination Agreement in the commercial register. On
August 2, 2004, two minority shareholders instituted public register proceedings
with the Koenigstein Local Court (Amtsgericht) and the Frankfurt District Court,
both with a view to have the registration of the Domination Agreement in the
Commercial Register deleted (Amtsloeschungsverfahren). (See Note 25)

     If legal challenges of the Domination Agreement by dissenting shareholders
of Celanese AG are successful, some or all actions taken under the Domination
Agreement, including the transfer of Celanese Americas Corporation ("CAC"), an
indirect subsidiary of Celanese, and CPO Celanese AG & Co. Procurement Olefin
KG, Frankfurt am Main ("CPO"), a wholly-owned subsidiary of Celanese, (see Note
30 for discussion regarding CAC and CPO's transfer) may be required to be
reversed and the Purchaser may be required to compensate Celanese AG for damages
caused by such actions.

     In connection with the acquisition of Celanese by BCP, BCP agreed to
pre-fund $463 million ((euro)373 million) of certain pension obligations. As of
September 30, 2004, $105 million ((euro)85 million) was pre-funded to the German
pension plans and $54 million ((euro)44 million) of cash was segregated to be
used exclusively for the pre-funding of CAC's non-qualified pension obligations.
During October 2004, an additional $300 million ((euro)241 million) was
prefunded to CAC's U.S. qualified pension plan.

3.   SUMMARY OF ACCOUNTING POLICIES

     o    CHANGE IN FISCAL YEAR

     In July 2004, the majority of Celanese's shareholders approved a change of
the Celanese fiscal accounting year to commence October 1st and end September
30th. As a result, Celanese's 2004 fiscal year ended on September 30, 2004.
Accordingly, the statements of operations and cash flows are presented for the
nine months ended September 30, 2004 and for the years ended December 31, 2003
and 2002 on an audited basis and for the nine months ended September 30, 2003 on
an unaudited basis.

     o    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 majority
owned subsidiaries over which Celanese exercises control as well as special
purpose entities which are variable interest entities where Celanese is deemed
the primary beneficiary. (See Note 4) All significant intercompany accounts and
transactions have been eliminated in consolidation.

     Pursuant to a regulation of the European Union, Celanese is required to
report consolidated financial statements in accordance with International
Financial Reporting Standards ("IFRS"), formerly known as International
Accounting Standards, with its first fiscal year beginning on or after January
1, 2007. As such, the Company plans to adopt the IFRS reporting requirements for
the 2008 fiscal year, beginning on October 1, 2007. The potential delisting from
the Frankfurt Stock Exchange would impact the implementation of the IFRS
reporting requirements.


                                      F-11



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     o    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, disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues, expenses and allocated charges during the
reporting period. The more significant estimates pertain to impairments of
intangible assets and other long-lived assets, restructuring costs and other
special charges, income taxes, pension and other postretirement benefits, asset
retirement obligations, environmental liabilities, and loss contingencies.
Actual results could differ from those estimates.

     o    REVENUE RECOGNITION

     Celanese recognizes revenue when title and risk of loss have been
transferred to the customer, generally at the time of shipment of products, and
provided four basic criteria are met: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services have been 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 transactions, revenue recognition would be delayed until
such time that the transactions become realizable and fully earned. Payments
received in advance of revenue recognition are recorded as deferred revenue.

     o    CASH AND CASH EQUIVALENTS

     All highly liquid investments with original maturities of three months or
less are considered cash equivalents.

     o    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. To determine whether an impairment is
other-than-temporary, the Company considers whether it has the ability and
intent to hold the investment until a market price recovery and evidence
indicating the cost of the investment is recoverable outweighs evidence to the
contrary. Evidence considered in this assessment includes the reasons for the
impairment, the severity and duration of the impairment, changes in value
subsequent to year-end, and forecasted performance of the investee.

     o    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 has been 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, which includes Celanese's exposure on its
dollar denominated intercompany net receivables held by euro denominated
entities. Additionally, Celanese has utilized 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.


                                      F-12



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     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 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. 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 that are 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, butane and methane requirements using forward purchase or
cash-settled swap contracts to manage its exposure to fluctuating feed stock and
energy costs. During the nine months ended September 30, 2004, there were no
forward contracts for butane and, for natural gas, there were positions covering
about 35% of the Chemical Products segment North American requirements primarily
as a result of forward contracts entered into in 2003. Throughout 2003, Celanese
entered into natural gas forward and cash settled swap contracts for
approximately 50 percent of its natural gas requirements for up to 3 to 6
months. In the future, we may modify our practice of purchasing a portion of our
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. 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 our exposure to increases in commodity prices, they can also
limit the potential benefit we 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. 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 used 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.

     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.

     o    INVENTORIES

     Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out or FIFO method. Cost includes raw materials,
direct labor and manufacturing overhead. Stores and supplies are valued at cost
or market, whichever is lower. Cost is generally determined by the average cost
method.


                                      F-13



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     During the quarter ended June 30, 2004, Celanese changed its inventory
valuation method of accounting for its U.S. subsidiaries from the last-in,
first-out or LIFO method to the first-in, first-out method or FIFO method. This
change will more closely represent the physical flow of goods resulting in
ending inventory which will better represent the current cost of the inventory
and the costs in income will more closely match the flow of goods. These
financial statements have been restated for all periods presented to reflect
this change. There was no effect on reported net earnings (loss) and earnings
(loss) per share for the three months ended September 30, 2004 as the accounting
change was adopted as of June 30, 2004. The impact of this change on reported
net earnings (loss) and earnings (loss) per share for the six months ended June
30, 2004 and the years ended December 31, 2003 and 2002 is as follows:



                                                              SIX MONTHS ENDED    YEARS ENDED
                                                              ----------------   ------------
                                                                  JUNE 30,       DECEMBER 31,
                                                                    2004         2003    2002
                                                              ----------------   ----   -----
                                                                 (UNAUDITED)
                                                      (IN (EURO) MILLIONS, EXCEPT FOR PER SHARE DATA)
                                                      -----------------------------------------------

Net earnings (loss) prior to restatement ..........                  (37)         131     187
Change in inventory valuation method ..............                   14            1     (19)
Income tax effect of change .......................                   (5)          --       7
                                                                   -----         ----   -----
Net earnings (loss) as restated ...................                  (28)         132     175
                                                                   =====         ====   =====
Basic and diluted earnings (loss) per share: (1)
Prior to restatement ..............................                (0.75)        2.65    3.72
Change in inventory valuation method, net of tax ..                 0.18         0.02   (0.24)
                                                                   -----         ----   -----
As restated .......................................                (0.57)        2.67    3.48
                                                                   =====         ====   =====


(1)  Per-share data are based on weighted average shares outstanding in each
     period.

     o    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". APB
Opinion No. 18 generally 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, which was 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 (euro)60 million
as of September 30, 2004 and December 31, 2003, respectively, 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.


                                      F-14



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     o    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......................   20 years
Buildings..............................   30 years
Buildings and Leasehold Improvements...   10 years
Machinery and Equipment................   10 years

     Leasehold improvements are amortized over 10 years or the remaining life of
the respective lease, whichever is shorter. Assets acquired in business
combinations are recorded at their fair values and depreciated over the assets
remaining useful life or the life of the Company's policy, which ever 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.

     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.

     o    INTANGIBLE ASSETS

     The excess of the purchase price over fair value of net identifiable assets
and liabilities of an acquired business ("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 lives.

     IMPAIRMENT OF INTANGIBLE ASSETS - Celanese assesses the recoverability of
the carrying value of its goodwill and other intangible assets with indefinite
useful lives 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. 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.


                                      F-15



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     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 intangible assets with finite lives
in the same manner as for property, plant and equipment. See "Impairment of
property, plant and equipment".

     o    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 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 laws in the respective tax jurisdiction enacted by the balance sheet date.

     The Company reviews its deferred tax assets for recoverability and
establishes a valuation allowance based on historical taxable income, projected
future taxable income, applicable tax strategies 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.

     o    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 the event
of 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. Recoveries of environmental remediation costs from other parties
are recorded as assets when their receipt is deemed probable. (See Note 26)

     o    LEGAL FEES

     Celanese accrues for legal fees related to litigation matters when the
costs associated with defending these matters can be reasonably estimated and
are probable of occurring. All other legal fees are expensed as incurred.

     o    MINORITY INTERESTS

     Minority interests in the equity and results of operations of the entities
consolidated 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 September 30, 2004 are as follows:

                                         OWNERSHIP
                                        PERCENTAGE
                                        ----------
InfraServ GmbH & Co. Oberhausen KG...       84%
Celanese Polisinteza d.o.o...........       73%
Synthesegasanlage Ruhr GmbH..........       50%
Pemeas GmbH..........................       41%
Dacron GmbH..........................        0%


                                      F-16



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     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
consolidating this entity in its consolidated financial statements.

     Dacron GmbH and Pemeas GmbH are variable interest entities as defined under
FASB Interpretation ("FIN") No. 46, Consolidation of Variable Interest Entities.
Celanese is deemed the primary beneficiary of these variable interest entities
and, accordingly, consolidates these entities in its consolidated financial
statements. (See Note 4)

     o    ACCOUNTING FOR SORBATES MATTERS

     In accordance with the demerger agreement between Hoechst and Celanese,
which became effective October 22, 1999, Celanese, then new owner to Hoechst's
sorbates business, was assigned the obligation related to the Sorbates matters.
However, Hoechst agreed to indemnify Celanese for 80 percent of payments for
such obligations. Expenses related to this matter are recorded gross of any such
recoveries from Hoechst in the Consolidated Statement of Operations. Recoveries
from Hoechst, which represent 80 percent of such expenses, are recorded directly
to shareholders' equity, net of tax, as a contribution of capital in the
Consolidated Balance Sheet. (See Note 21)

     o    RESEARCH AND DEVELOPMENT

     The costs of research and development are charged as an expense in the
period in which they are incurred.

     o    FUNCTIONAL AND REPORTING CURRENCIES

     For 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 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).

     o    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, if dilutive. At September 30, 2004 and December 31,
2003, Celanese had employee stock options outstanding of 0.5 million and 1.2
million, respectively. There were no employee stock options considered dilutive
for the nine month period ended September 30, 2004 and for the year ended
December 31, 2002. There were approximately 11,000 employee stock options
considered dilutive for the year ended December 31, 2003.

     o    STOCK-BASED COMPENSATION

     Celanese accounts for stock options and similar equity instruments under
the fair value method which requires compensation cost to be measured at the
grant date based on the value of the award. The fair value of 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 based on the fair value of stock options is recorded over the vesting
period of the options and has been recognized in the accompanying consolidated
financial statements. (See Note 22)

     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 22)


                                      F-17



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     o    ACCOUNTING FOR PURCHASING AGENT AGREEMENTS

     CPO 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 third party sales
are classified as a reduction to selling, general and administrative expense.
Commissions amounted to (euro) 5 million, (euro) 7 million and (euro) 5 million
for the nine months ended September 30, 2004 and for the years ended December
31, 2003 and 2002, respectively. The raw material sales volume commissioned by
CPO for third parties amounted to (euro) 406 million, (euro) 496 million and
(euro) 465 million for the nine months ended September 30, 2004 and for the
years ended December 31, 2003 and 2002, respectively.

     o    RECLASSIFICATIONS

     Certain reclassifications have been made to prior year balances in order to
conform to current year presentation.

4.   ACCOUNTING CHANGES AND RECENT ACCOUNTING PRONOUNCEMENTS

     Accounting Changes Adopted in 2004

     During 2004, Celanese changed its inventory valuation method of accounting
for its US subsidiaries from the LIFO method to the FIFO method. The financial
statements have been restated for all periods presented to reflect this change.
(See Note 3)

     In January 2003, and subsequently revised in December 2003, the FASB issued
FIN No. 46, Consolidation of Variable Interest Entities and FIN No. 46 Revised
(collectively, "FIN No. 46"), respectively. FIN No. 46 clarifies the application
of Accounting Research Bulletin No. 51, "Consolidation of Financial Statements"
requiring the consolidation of certain variable interest entities ("VIEs") which
are defined as entities having equity that is not sufficient to permit such
entities to finance their activities without additional subordinate financial
support or whose equity holders lack certain characteristics of a controlling
financial interest. The company deemed to be the primary beneficiary is required
to consolidate the VIE. FIN No. 46 requires VIEs that meet the definition of a
special purpose entity to be consolidated by the primary beneficiary as of
December 31, 2003. For VIEs that do not meet the definition of a special purpose
entity, consolidation is not required until March 31, 2004; however, expanded
disclosure is required at December 31, 2003.

     Celanese has a lease agreement for its cyclo-olefin copolymer ("COC") plant
with Dacron GmbH, a special purpose entity. This special purpose entity was
created primarily for the purpose of constructing and subsequently leasing the
COC plant to Celanese. This arrangement qualifies as a VIE. Based upon the terms
of the lease agreement and the residual value guarantee Celanese provided to the
lessors, Celanese is deemed the primary beneficiary of the VIE. At December 31,
2003, Celanese recorded (euro) 35 million of additional assets and liabilities
from the consolidation of this special purpose entity. The consolidation of this
entity did not have a material impact on Celanese's financial position or
results of operations and cash flows for the nine months ended September 30,
2004. (See Note 30)

     In April 2004, Celanese and a group of investors led by Conduit Ventures
Ltd. entered into a joint venture, which was named Pemeas GmbH. This joint
venture was formed in order to advance the commercialization of Celanese's fuel
cell technology. Pemeas GmbH is considered a variable interest entity as defined
under FIN No. 46, Consolidation of Variable Interest Entities. Celanese is
deemed the primary beneficiary of this variable interest entity and,
accordingly, consolidates this entity in its consolidated financial statements.
The consolidation of this entity did not have a material impact on Celanese's
financial position or results of operations and cash flows for the nine months
ended September 30, 2004. (See Note 30)

     In March 2004, the EITF reached a consensus on Issue No. 03-01, Other than
Temporary Impairment, which outlines the basic model to be used to evaluate
whether an investment is impaired and sets the disclosure requirements for such
investments. EITF Issue No. 03-01 is to be applied prospectively in periods
beginning after June 15, 2004. The Company has applied the provisions of EITF
Issue No. 03-01 in the current reporting period with no material impact on
Celanese's financial position or results of operations and cash flows for the
nine months ended September 30, 2004.


                                      F-18



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     Accounting Changes Adopted in 2003

     Celanese adopted SFAS No. 143, Accounting for Asset Retirement Obligations,
on January 1, 2003. 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 liability is measured at its discounted fair value and is adjusted
to its present value in subsequent periods as accretion expense is recorded. The
corresponding asset retirement costs are capitalized as part of the carrying
amount of the related long-lived asset and depreciated over the asset's useful
life. On January 1, 2003, Celanese recognized transition amounts for existing
asset retirement obligation liabilities, associated capitalized costs and
accumulated depreciation. An after-tax transition charge of (euro) 1 million was
recorded as the cumulative effect of an accounting change. The ongoing expense
on an annual basis resulting from the initial adoption of SFAS No. 143 is
immaterial. (See Note 17). The effect of the adoption of SFAS No. 143 on
proforma net income and proforma earnings per share for prior periods presented
is not material.

     In November 2002, the EITF reached a consensus on Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables. EITF Issue No. 00-21 provides guidance
on how to account for arrangements that involve the delivery or performance of
multiple products, services and/or rights to use assets. The provisions of EITF
Issue No. 00-21 apply to revenue arrangements entered into after June 30, 2003.

     In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 is intended to
result in more consistent reporting of contracts as either freestanding
derivative instruments subject to SFAS No. 133 in their entirety, or as hybrid
instruments with debt host contracts and embedded derivative features. In
addition, SFAS No. 149 clarifies the definition of a derivative by providing
guidance on the meaning of initial net investments related to derivatives. This
statement is effective for contracts entered into or modified after June 30,
2003. The adoption of SFAS No. 149 did not have a material effect on Celanese's
consolidated financial position or results of operations.

     In May 2003, the EITF reached a consensus on Issue No. 01-8, Determining
Whether an Arrangement Contains a Lease. EITF Issue No. 01-8 provides guidance
on identifying leases contained in contracts or other arrangements that sell or
purchase products or services. This consensus is effective prospectively for
contracts entered into or significantly modified after May 28, 2003. The impact
of EITF Issue No. 01-8 did not have a material effect on Celanese's consolidated
financial position or results of operations. The impact of EITF Issue No. 01-8
on Celanese future results of operations and financial position will depend on
the terms contained in contracts signed or contracts amended in the future.

     In December 2003, the SEC issued Staff Accounting Bulletin ("SAB") 104,
Revenue Recognition. The SAB updates portions of the interpretive guidance
included in Topic 13 of the codification of staff accounting bulletins in order
to make the guidance consistent with current authoritative accounting
literature. The principal revisions relate to the incorporation of certain
sections of the staff's frequently asked questions document on revenue
recognition into Topic 13. The adoption of SAB 104 did not have an effect on
Celanese's consolidated financial position or results of operations.

     In December 2003, the FASB issued SFAS No. 132 (revised), Employers'
Disclosures about Pensions and Other Postretirement Benefits. SFAS No. 132
(revised) prescribes employers' disclosures about pension plans and other
postretirement benefit plans; it does not change the measurement or recognition
of those plans. The statement retains and revises the disclosure requirements
contained in the original SFAS No. 132. It also requires additional disclosures
about the assets, obligations, cash flows, and net periodic benefit cost of
defined benefit pension plans and other postretirement benefit plans. The
statement generally is effective for fiscal years ending after December 15,
2003. Celanese's disclosures in Note 20 incorporate the requirements of SFAS No.
132 (revised).

     Accounting Changes Adopted in 2002

     In 2002, Celanese recorded income of (euro) 19 million for the cumulative
effect of two accounting changes. This amount consisted of income of (euro) 10
million ((euro) 0.20 per share) from the implementation of SFAS No. 142, as
disclosed below, and income of (euro) 9 million ((euro) 0.18 per share), net of
income taxes of (euro) 5 million, as a result of the change in the measurement
date of Celanese's U.S. benefit plans. (See Note 20)


                                      F-19



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     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
(euro) 1,162 million that was subject to the transition provisions 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 (euro) 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.
(See Note 13)

     Celanese adopted SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, on January 1, 2002, and accordingly applied 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.

     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 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 FIN No. 45, Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others, 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 25. 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 applied the recognition and measurement provisions for all
guarantees entered into or modified after December 31, 2002.


                                      F-20



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     Recent Accounting Pronouncements

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

     In December 2004, the FASB revised SFAS No. 123, Accounting for Stock Based
Compensation, which requires that the cost from all share-based payment
transactions be recognized in the financial statements. SFAS No. 123 (revised)
is effective for the first interim or annual period beginning after June 15,
2005. Celanese does not anticipate SFAS No. 123 (revised) to have any additional
material impact on the results of operations and financial position.

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

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

5.   SUPPLEMENTAL CASH FLOW INFORMATION



                                                                               NINE MONTHS              YEARS
                                                                           ENDED SEPTEMBER 30,   ENDED DECEMBER 31,
                                                                           -------------------   ------------------
                                                                            2004       2003          2003   2002
                                                                            ----       ----          ----   ----
                                                                                   (UNAUDITED)
                                                                                     (IN (EURO) MILLIONS)
                                                                           ----------------------------------------

Cash paid for:
   Taxes, net of refunds................................................     15         124           148    30
   Interest, net of amounts capitalized.................................     59          27            35    48
Noncash investing and financing activities:
   Fair value adjustment to securities available-for-sale, net of tax...      3           1             3     2
   Settlement of demerger liability, net of tax (See Note 21)...........      2          39            39     7



                                      F-21



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

6.   TRANSACTIONS AND RELATIONSHIPS WITH AFFILIATES

     Celanese is a party to various transactions with affiliated companies.
Companies for which Celanese has a material ownership interest, primarily
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.

                                                         NINE
                                                     MONTHS ENDED    YEARS ENDED
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                    -------------   ------------
                                                        2004         2003   2002
                                                        ----         ----   ----
                                                        (IN (EURO) MILLIONS)
                                                    ----------------------------
STATEMENTS OF OPERATIONS
   Purchases from Affiliates(1) .................         90          85     82
   Sales to Affiliates(1) .......................        103          92     75
   Interest income from Affiliates ..............          1          --      1
   Interest expense to Affiliates ...............          1           3      7



                                                                           AS OF           AS OF
                                                                       SEPTEMBER 30,   DECEMBER 31,
                                                                       -------------   ------------
                                                                            2004           2003
                                                                            ----           ----
                                                                           (IN (EURO) MILLIONS)
                                                                       ----------------------------

BALANCE SHEETS
   Trade and other receivables from Affiliates .....................         38              40
   Current notes receivable (including interest) from Affiliates ...         30               6
                                                                            ---             ---
      Total receivables from Affiliates ............................         68              46
                                                                            ===             ===
   Accounts payable and other liabilities due Affiliates ...........         22              28
   Short-term borrowings from Affiliates(2) ........................         80              79
                                                                            ---             ---
      Total due Affiliates .........................................        102             107
                                                                            ===             ===


(1) Purchases/Sales from/to Affiliates

     Purchases and sales from/to Affiliates are accounted for at prices, which
in the opinion of management, approximate those charged to third party customers
for similar goods or services.

(2) Short- term borrowings from Affiliates (See Note 16)

     The Company has agreements with certain Affiliates, primarily Infraserv
entities, whereby excess Affiliate cash is lent to and managed by the Company at
variable interest rates governed by those agreements.

7.   ACQUISITIONS, DIVESTITURES AND JOINT VENTURES

     ACQUISITIONS:

o    On December 31, 2002, Celanese acquired Clariant AG's European emulsions
     and worldwide emulsion powders businesses, valued at(euro)147 million,
     including the assumption of related liabilities. Net of purchase price
     adjustments of (euro)2 million and the assumption of liabilities of
     (euro)20 million, Celanese paid (euro)125 million cash for the net assets
     of the business in 2002. In 2003, the purchase price adjustment related to
     the acquisition was finalized, which resulted in Celanese making an
     additional payment of (euro)7 million. The addition of this business to the
     Chemical 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 product requirements
     of customers across Europe. There are also 11 sales offices and seven
     research and technology centers, located to provide rapid response to
     customers. Two of the production


                                      F-22



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     facilities are located in Germany and Spain, in close proximity to Celanese
     plants that supply chemical ingredients for emulsions. Celanese
     recorded(euro)33 million of initial goodwill in 2002, which was
     subsequently reduced by(euro)21 million upon completion of the purchase
     price allocation in 2003. In addition, the fair value of the intangible
     assets acquired was(euro)34 million, consisting primarily of patents and
     trademarks. (See Note 13)

     JOINT VENTURES:

o    In April 2004, Celanese and a group of investors led by Conduit Ventures
     Ltd. entered into a joint venture, which was named Pemeas GmbH. This joint
     venture was formed in order to advance the commercialization of Celanese's
     fuel cell technology. Pemeas GmbH is considered a variable interest entity
     as defined under FIN No. 46, Consolidation of Variable Interest Entities.
     Celanese is deemed the primary beneficiary of this variable interest entity
     and, accordingly, consolidates this entity in its consolidated financial
     statements. The consolidation of this entity did not have a material impact
     on Celanese's financial position or results of operations and cash flows
     for the nine months ended September 30, 2004. (See Note 30)

o    On October 1, 2003, Celanese and Degussa AG ("Degussa") completed the
     combination of their European oxo businesses. The new joint venture, which
     is named European Oxo GmbH, consists of both companies' propylene-based oxo
     chemical activities. Celanese contributed to European Oxo GmbH net assets
     with a carrying value of (euro)10 million for a 50% interest in the joint
     venture. Celanese retained substantially all the accounts receivable,
     accounts payable and accrued liabilities of its contributed business
     existing on September 30, 2003. In addition, Celanese and Degussa each have
     committed to fund the joint venture equally. Under a multi-year agreement,
     Degussa has the option to sell its share in European Oxo GmbH to Celanese
     at fair value beginning in January 2008. Celanese has the option to
     purchase Degussa's share in the business at fair value beginning in January
     2009. Celanese's European oxo business was part of Celanese's Chemical
     Products segment. Celanese reports its investment in the Chemicals Products
     segment using the equity method of accounting.

     DIVESTITURES:

     The following tables summarize the results of the discontinued operations
     for the nine months ended September 30, 2004 and the years ended December
     31, 2003 and 2002:



                                                                    NET SALES
                                                           ---------------------------
                                                            NINE MONTHS
                                                               ENDED      YEARS ENDED
                                                           SEPTEMBER 30,   DECEMBER 31,
                                                           -------------  -------------
                                                               2004        2003   2002
                                                               ----        ----   ----
                                                               (IN (EURO) MILLIONS)
                                                           ---------------------------

     Discontinued operations of Chemical Products ......         18         208    262
     Discontinued operations of Performance Products ...         --          --    273
     Discontinued operations of Ticona .................          1          40     61
                                                                ---         ---    ---
     Total discontinued operations .....................         19         248    596
                                                                ===         ===    ===




                                                             OPERATING PROFIT (LOSS)
                                                           ---------------------------
                                                            NINE MONTHS
                                                               ENDED      YEARS ENDED
                                                           SEPTEMBER 30,  DECEMBER 31,
                                                           ------------   ------------
                                                               2004        2003   2002
                                                               ----        ----   ----
                                                               (IN (EURO) MILLIONS)
                                                           ---------------------------

     Discontinued operations of Chemical Products ......         (4)        (2)   (54)
     Discontinued operations of Performance Products ...         --         --     10
     Discontinued operations of Ticona .................         --         --     (1)
                                                                ---        ---    ---
     Total discontinued operations .....................         (4)        (2)   (45)
                                                                ===        ===    ===



                                      F-23



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     2003

o    In September 2003, Celanese and The Dow Chemical Company ("Dow") reached an
     agreement for Dow to purchase the acrylates business of Celanese. This
     transaction was completed in February 2004 for sales price of (euro)111
     million, which resulted in a gain of (euro)10 million in the nine months
     ended September 30, 2004. Dow acquired Celanese's acrylates business line,
     including inventory, intellectual property and technology for crude acrylic
     acid, glacial acrylic acid, ethyl acrylate, butyl acrylate, methyl acrylate
     and 2-ethylhexyl acrylate, as well as acrylates production assets at the
     Clear Lake, Texas facility. In related agreements, Celanese provides
     certain contract manufacturing services to Dow, and Dow supplies acrylates
     to Celanese for use in its emulsions production. Simultaneous with the
     sale, Celanese repaid an unrelated obligation of (euro)76 million to Dow.
     The acrylates business was part of Celanese's Chemical Products segment. As
     a result of this transaction, the assets, liabilities, revenues and
     expenses related to the acrylates product lines at the Clear Lake, Texas
     facility are reflected as a component of discontinued operations in the
     consolidated financial statements in accordance with SFAS No. 144.

o    In December 2003, the Ticona segment completed the sale of its nylon
     business line to BASF. Ticona received cash proceeds of (euro)8 million and
     recorded a gain of (euro)2 million. The transaction is reflected as a
     component of discontinued operations in the consolidated financial
     statements in accordance with SFAS No. 144.

     In 2003, Celanese recorded (euro)2 million in losses from operations of
discontinued operations related to the acrylates and nylon business
divestitures. In addition, Celanese also recorded adjustments related to prior
year discontinued operations representing a gain of (euro)4 million.

     2002

o    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 (euro)23 million on the sale of this business, which
     included cash of (euro)40 million offset by proceeds received of (euro)17
     million, and a gain of (euro)10 million on disposition of Deponie included
     in gain on disposition of assets.

o    In December 2002, Celanese completed the sale of Trespaphan, a global
     oriented polypropylene ("OPP") film business, to a consortium consisting of
     Dor-Moplefan Group and Bain Capital, Inc. for a value of (euro)209 million.
     Net of the purchase price adjustments of (euro)19 million and the repayment
     of (euro)78 million in intercompany debt that Trespaphan owed Celanese,
     Celanese received net proceeds of (euro)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.

o    During 2002, Celanese sold its global allylamines and U.S. alkylamines
     businesses to U.S. Amines Ltd. These businesses are reflected as a
     component of discontinued operations in the consolidated financial
     statements in accordance with SFAS No. 144.

     In 2002, Celanese received net proceeds of (euro)100 million and recorded
(euro)15 million in earnings (loss) from operation of discontinued operations
(including a gain on disposal of discontinued operations of (euro)14 million)
and a gain of (euro)10 million in gain on disposition of assets relating to
these divestitures. Additionally, Celanese recognized a tax benefit of (euro)40
million for discontinued operations, which includes a tax benefit associated
with a tax deductible write down of the tax basis for Trespaphan's subsidiary in
Germany relating to tax years ended December 31, 2001 and 2000. Since this tax
benefit relates to an entity solely engaged in a business designated as
discontinued operations, this tax benefit has been correspondingly included in
earnings (loss) from discontinued operations. Additionally, Celanese recognized
tax benefits of (euro)10 million in 2001 related to these divestitures and
recorded these in income tax benefit (expense) of discontinued operations.

8.   SECURITIES AVAILABLE FOR SALE

     At September 30, 2004 and December 31, 2003, Celanese had (euro)282 million
and (euro)264 million, respectively, of securities available for sale, which
were included as a component of long-term and current other assets. Celanese's
captive insurance companies and pension related trusts hold these securities.
There was a net realized gain of (euro)1


                                      F-24



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

million and (euro)3 million for the nine months ended September 30, 2004 and the
year ended December 31, 2003, respectively and a net realized loss of (euro)7
million for the year ended December 31, 2002. The amortized cost, gross
unrealized gain, gross unrealized loss and fair values for available-for-sale
securities by major security type at September 30, 2004 and December 31, 2003,
were as follows:



                                                  AMORTIZED   UNREALIZED   UNREALIZED    FAIR
                                                     COST        GAIN         LOSS      VALUE
                                                  ---------   ----------   ----------   -----
                                                              (IN (EURO) MILLIONS)
                                                  -------------------------------------------

AT SEPTEMBER 30, 2004
Debt securities
   U.S. government ............................       59            6           --        65
   Foreign government .........................        2            1           --         3
   U.S. municipal .............................        1           --           --         1
   U.S. corporate .............................       85            1           --        86
                                                     ---          ---          ---       ---
      Total debt securities ...................      147            8           --       155
Bank certificates of deposit ..................       12           --           --        12
Equity securities .............................       36            2           (3)       35
Mortgage-backed securities ....................       70            8           --        78
Money markets deposits and other securities ...        2           --           --         2
                                                     ---          ---          ---       ---
                                                     267           18           (3)      282
                                                     ===          ===          ===       ===
AT DECEMBER 31, 2003
Debt securities
   U.S. government ............................       54            5           --        59
   Foreign government .........................        2            1                      3
   U.S. municipal .............................        1           --           --         1
   U.S. corporate .............................       84            1           --        85
                                                     ---          ---          ---       ---
      Total debt securities ...................      141            7           --       148
Bank certificates of deposit ..................       28           --           --        28
Equity securities .............................       40            2           (5)       37
Mortgage-backed securities ....................       44            6           --        50
Money markets deposits and other securities ...        1           --           --         1
                                                     ---          ---          ---       ---
                                                     254           15           (5)      264
                                                     ===          ===          ===       ===


     Fixed maturities at September 30, 2004 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.

                                                             AMORTIZED   FAIR
                                                                COST     VALUE
                                                            ----------   -----
                                                            (IN (EURO) MILLIONS)
                                                            --------------------
Within one year(1) ......................................        21        21
From one to five years ..................................       104       106
From six to ten years ...................................        73        76
Greater than ten years ..................................        38        49
                                                                ---       ---
                                                                236       252
                                                                ===       ===

(1)  Proceeds received from fixed maturities that mature within one year are
     expected to be reinvested into additional securities upon such maturity.


                                      F-25



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

9.   RECEIVABLES, NET



                                                     AS OF SEPTEMBER 30,   AS OF DECEMBER 31,
                                                     -------------------   ------------------
                                                              2004                 2003
                                                             -----                -----
                                                               (IN (EURO) MILLIONS)
                                                     ----------------------------------------

Trade receivables - third party and affiliates ...             684                  589
Reinsurance receivables ..........................             143                  162
Other ............................................             316                  304
                                                             -----                -----
   Subtotal ......................................           1,143                1,055
Allowance for doubtful accounts ..................             (18)                 (18)
                                                             -----                -----
   Net receivables ...............................           1,125                1,037
                                                             =====                =====


     As of September 30, 2004 and December 31, 2003, 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 receivables 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 receivables 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.
During 2004 and 2003, the provisions of the program allowed for the sale of up
to $120 million of receivables. As of September 30, 2004, Celanese is
renegotiating the program which has not been available since the acquisition.
There were no outstanding sales of receivables under this program as of
September 30, 2004 and December 31, 2003. Fees paid by Celanese under this
agreement are based on certain variable market rate indices and were less than
(euro)1 million for the nine months ended September 30, 2004 and for year ended
December 31, 2003 and (euro)1 million for the year ended December 31, 2002.

10.  INVENTORIES

                                                        AS OF          AS OF
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         2004           2003
                                                    -------------   ------------
                                                        (IN (EURO) MILLIONS)
                                                    ----------------------------
Finished goods ..................................        355             284
Work-in-process .................................         17              13
Raw materials and supplies ......................         83             107
                                                         ---             ---
   Total Inventories ............................        455             404
                                                         ===             ===


                                      F-26



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

11.  INVESTMENTS

     Celanese accounts for the following Affiliates under the equity method:



                                                                                    CELANESE'S      CELANESE'S
                                                                                     CARRYING        SHARE OF
                                                                                       VALUE     EARNINGS (LOSS)
                                                                                    ----------   ---------------
                                                                          PERCENT        SEPTEMBER 30, 2004
                                                                           OWNER-   ----------------------------
AFFILIATE                                                 SEGMENT           SHIP        (IN (EURO) MILLIONS)
---------                                          --------------------   -------   ----------------------------

Estech GmbH & Co. KG ...........................     Chemical Products     51.0%          1            (1)
European Oxo GmbH ..............................     Chemical Products     50.0%          8            --
Fortron Industries .............................          Ticona           50.0%         20             6
Korea Engineering Plastics Co., Ltd. ...........          Ticona           50.0%         94             7
Polyplastics Co., Ltd ..........................          Ticona           45.0%        190            17
InfraServ GmbH & Co. Gendorf KG ................           Other           39.0%         18             1
InfraServ GmbH & Co. Hochst KG .................           Other           31.2%         99             6
InfraServ GmbH & Co. Knapsack KG ...............           Other           27.0%         14             1
Sherbrooke Capital Health and Wellness, L.P. ...   Performance Products    10.0%          3             1
                                                                                        ---           ---
   Total .......................................                                        447            38
                                                                                        ===           ===




                                                                   AS OF SEPTEMBER 30,   AS OF DECEMBER 31,
                                                                   -------------------   ------------------
                                                                           2004                 2003
                                                                   -------------------   ------------------
                                                                             (IN (EURO) MILLIONS)
                                                                   ----------------------------------------

Affiliates totals:
   Net sales ...................................................          1,701                1,815
   Net earnings ................................................             96                   75
Celanese's share:
   Net earnings ................................................             38                   31
   Dividends ...................................................             29                   21
Total assets ...................................................          1,895                1,836
Total liabilities ..............................................           (981)                (908)
Interests of others ............................................            557                  570
                                                                          -----                -----
   Celanese's share of equity ..................................            357                  358
Excess of cost over underlying equity in net assets acquired ...             90                   86
                                                                          -----                -----
   Celanese's carrying value of investments ....................            447                  444
                                                                          =====                =====



                                      F-27



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



                                                                                              NET BOOK
                                                                                                VALUE
                                                                                        --------------------
                                                                                        (IN (EURO) MILLIONS)
                                                                                        --------------------

December 31, 2002 ...................................................................           454
   Contributions ....................................................................            14
   Sale of investment ...............................................................            (1)
   Exchange rate changes ............................................................           (33)
   Celanese's share of equity method investee earnings, net of dividends received ...            10
                                                                                                ---
December 31, 2003 ...................................................................           444
   Exchange rate changes ............................................................            (6)
   Celanese's share of equity method investee earnings, net of dividends received ...             9
                                                                                                ---
September 30, 2004 ..................................................................           447
                                                                                                ===


     Estech GmbH & Co. KG is a venture created in 2002 for the production and
marketing of neopolyol esters. Celanese accounts for its ownership interest in
Estech GmbH & Co. KG under the equity method of accounting because the minority
shareholder has substantive participating rights that allow it to participate in
significant decisions made in the ordinary course of business.

     In October 2003, Celanese and Degussa completed the formation of European
Oxo Chemicals GmbH, a joint venture created to own and operate the European
propylene-based oxo businesses of Celanese and Degussa. (See Note 7)

     Celanese accounts for its ownership interest in Sherbrooke Capital Health
and Wellness, L.P. under the equity method of accounting because Celanese is
able to exercise significant influence.

     In addition to equity method investments, the Company has certain
investments that it accounts for under the cost method of accounting, which are
recorded in non-current other assets in the consolidated balance sheet.


                                      F-28



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

12.  PROPERTY, PLANT AND EQUIPMENT



                                                        BUILDING,
                                             LAND        BUILDING
                                           AND LAND    IMPROVEMENTS   MACHINERY   CONSTRUCTION
                                           IMPROVE-   AND LEASEHOLD      AND           IN        CAPITALIZED
                                             MENT      IMPROVEMENTS   EQUIPMENT     PROGRESS       INTEREST     TOTAL
                                           --------   -------------   ---------   ------------   -----------   ------
                                                                      (IN (EURO) MILLIONS)
                                           --------------------------------------------------------------------------

Net book value at December 31, 2003 ....      78           169            922          153            32        1,354
                                             ===          ====         ======         ====           ===       ======
ACQUISITION OR CONSTRUCTION COST
   December 31, 2003 ...................     151           474          4,026          153           121        4,925
      Additions ........................       1             2             26          100             4          133
      Disposals ........................      (8)          (27)           (53)          --            (1)         (89)
      Transfers ........................      --             5            119         (124)           --           --
      Acquisitions .....................      --            --             --           --            --           --
      Exchange rate changes ............       2             7             47           --             2           58
                                             ---          ----         ------         ----           ---       ------
    September 30, 2004 .................     146           461          4,165          129           126        5,027
                                             ---          ----         ------         ----           ---       ------
ACCUMULATED DEPRECIATION
   December 31, 2003 ...................     (73)         (305)        (3,104)          --           (89)      (3,571)
      Additions ........................      (5)          (17)          (253)          --            (8)        (283)
      Disposals ........................       7            27             39           --             1           74
      Exchange rate changes ............      (1)           (4)           (38)          --            (2)         (45)
                                             ---          ----         ------         ----           ---       ------
   September 30, 2004 ..................     (72)         (299)        (3,356)          --           (98)      (3,825)
                                             ---          ----         ------         ----           ---       ------
Net book value at September 30, 2004 ...      74           162            809          129            28        1,202
                                             ===          ====         ======         ====           ===       ======


     Total capital expenditures in property, plant and equipment were (euro) 123
million and (euro) 185 million for the nine months ended September 30, 2004 and
for the year ended December 31, 2003, respectively. Depreciation totaled (euro)
175 million, (euro) 245 million and (euro) 259 million for the nine months ended
September 30, 2004 and years ended December 31, 2003 and 2002, respectively.
Writedowns due to asset impairments amounting to (euro) 108 million, (euro) 1
million and (euro) 6 million were recorded to special charges during the nine
months ended September 30, 2004 and the years ended December 31, 2003 and 2002,
respectively. The asset impairment writedowns are included in additions to
accumulated depreciation.

     Assets under capital leases, net of accumulated amortization, amounted to
(euro) 4 million and (euro) 11 million at September 30, 2004 and December 31,
2003, respectively.

     Interest costs capitalized were (euro) 4 million, (euro) 3 million and
(euro) 6 million for the nine months ended September 30, 2004 and years ended
December 31, 2003 and 2002, respectively.

     In October 2004, a subsidiary of the Company announced plans to consolidate
its tow production to fewer sites by 2007 and to discontinue the production of
acetate filament by mid-2005. In the third quarter of 2004, the Company recorded
restructuring charges of (euro) 100 million related to asset impairment of the
Company's acetate business (See Note 17 for discussion related to the associated
disclosures regarding asset retirement obligations). The restructuring is being
implemented to increase efficiency, reduce overcapacity and to focus on products
and markets that provide long-term value.

     In the first quarter of 2004, as part of the Acrylates divesture, the
Company entered into a site agreement with Dow to allow Dow to use certain
property, plant and equipment. As the agreement met the stipulations of a
capital lease under EITF Issue No. 01-8, Determining Whether and Arrangement
Contains a Lease, the Company has reclassed (euro) 9 million related to
property, plant and equipment into other long-term receivables.


                                      F-29



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     In 2003, the purchase price allocation associated with the December 2002
acquisition of the Emulsions business was finalized. As a result, property,
plant and equipment was increased by (euro) 31 million. This increase was
recorded as follows: (euro) 27 million in machinery and equipment, less than
(euro) 4 million in buildings, and less than (euro) 1 million in land.

     At December 31, 2003, the consolidation of a variable interest entity,
Dacron GmbH, resulted in the recording of (euro) 45 million in net property,
plant and equipment. This was recorded as follows: (euro) 61 million in
machinery and equipment cost and (euro) 16 million in machinery and equipment
accumulated depreciation.

     On October 1, 2003, Celanese and Degussa began their European Oxo GmbH
joint venture. (See Note 7) Celanese contributed property, plant, and equipment
of (euro) 6 million to European Oxo GmbH. This contribution was recorded as
follows: (euro) 102 million in machinery and equipment cost and (euro) 97
million in machinery and equipment accumulated depreciation and (euro) 1 million
in construction in process.

     As of January 1, 2003, Celanese adopted SFAS No. 143, Accounting for Asset
Retirement Obligations. Celanese recognized transition amounts for existing
asset retirement obligations and corresponding capitalized costs and accumulated
depreciation. Upon adoption, Celanese recorded (euro) 8 million in land and land
improvements cost, and (euro) 5 million in land and land improvements
accumulated depreciation. In addition, in the fourth quarter of 2003, the
Company assigned a probability that certain facilities in the Acetate products
segment will close in the latter half of this decade. As a result, the Company
recorded (euro) 8 million in land and land improvements cost and (euro) 1
million to machinery and equipment cost as well as (euro) 8 million in land and
land improvement accumulated depreciation and (euro) 1 million in machinery and
equipment accumulated depreciation.

     In the first quarter of 2004, as part of the acrylates divestiture,
Celanese Mexico and Celanese Ltd. entered into a site agreement with Dow to
allow them to use certain property, plant, and equipment. As the agreement met
the stipulations of a capital lease under EITF Issue No. 01-8, Determining
Whether an Arrangement Contains a Lease, Celanese has reclassed the amount of
(euro) 14 million related to the property, plant and equipment into other
long-term receivables. This transaction is included in disposals above.

13.  INTANGIBLE ASSETS

Goodwill



                                                          CHEMICAL    ACETATE
                                                          PRODUCTS   PRODUCTS   TICONA   TOTAL
                                                          --------   --------   ------   -----
                                                                  (IN (EURO) MILLIONS)
                                                          ------------------------------------

Carrying value of goodwill as of December 31, 2002 ....     539        146       327     1,012
   Finalization of Purchase Accounting Adjustments ....     (21)        --        --       (21)
   Exchange rate changes ..............................     (67)       (19)      (56)     (142)
                                                            ---        ---       ---     -----
Carrying value of goodwill as of December 31, 2003 ....     451        127       271       849
                                                            ---        ---       ---     -----
   Exchange rate changes ..............................       8          3         5        16
                                                            ---        ---       ---     -----
Carrying value of goodwill as of September 30, 2004 ...     459        130       276       865
                                                            ===        ===       ===     =====


     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 at
least annually for impairment. Additionally, the adoption of SFAS No. 142
required 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 (euro) 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.


                                      F-30



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The following table presents the impact of adopting SFAS No. 142 on net
earnings and net earnings per share:

                                                     YEAR ENDED DECEMBER 31,
                                                               2002
                                                 -------------------------------
                                                 (IN (EURO) MILLIONS, EXCEPT PER
                                                           SHARE DATA)
                                                 -------------------------------
Reported net earnings.........................                  175
Adjustment for goodwill amortization..........                   --
Adjustment for negative goodwill..............                  (10)
                                                              -----
Adjusted net earnings.........................                  165
                                                              =====

Earnings per common share - basic and diluted:
   Reported net earnings......................                 3.48
   Goodwill amortization......................                   --
   Negative goodwill..........................                (0.20)
                                                              -----
   Adjusted net earnings......................                 3.28
                                                              =====

Other Intangible Assets

     Celanese's other intangible assets, primarily relate to patents and
trademarks acquired in the emulsions acquisition. Celanese's cost and
accumulated amortization of other intangible assets as of September 30, 2004
were (euro)48 million and (euro)25 million, respectively. Celanese's cost and
accumulated amortization of other intangible assets as of December 31, 2003 were
(euro)53 million and (euro)25 million, respectively. Aggregate amortization
expense charged against earnings for intangible assets with finite lives during
the nine months ended September 30, 2004 and the years ended December 31, 2003
and 2002 totaled (euro)5 million, (euro)10 million and (euro)3 million,
respectively. Estimated amortization expense for the succeeding five fiscal
years is approximately (euro)4 million in 2005, (euro)4 million in 2006, (euro)4
million in 2007, (euro)3 million in 2008 and (euro)1 million in 2009. Intangible
assets subject to amortization have a weighted average life of five years.

     In 2003, it was determined that of the other intangible assets that were
acquired in the emulsions acquisition, (euro)7 million represents a trademark,
which has an indefinite life and is not subject to amortization. Accordingly, no
amortization expense was recorded for this trademark since 2003.

14.  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 2004 is 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. In 2003 and 2002 the
corporate tax rate was 26.5 percent and 25 percent, respectively. 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
was 41 percent for 2003 and 40 percent for 2002.

     Deferred taxes are being provided at a 40 percent rate for the German
companies as of September 30, 2004. Deferred taxes are being provided on all
other companies at the tax rate currently in effect in the local tax
jurisdictions.


                                      F-31



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



                                                                                 NINE
                                                                             MONTHS ENDED    YEARS ENDED
                                                                             SEPTEMBER 30,   DECEMBER 31,
                                                                             -------------   ------------
                                                                                 2004         2003   2002
                                                                             -------------    ----   ----
                                                                                  (IN (EURO) MILLIONS)
                                                                             ----------------------------

Earnings (loss) from continuing operations before income tax and minority
   interests:
   Germany ...............................................................         51          (25)   146
   U.S ...................................................................        (37)          61   (155)
   Other .................................................................         89          141    199
                                                                                  ---          ---   ----
            Total ........................................................        103          177    190
                                                                                  ===          ===   ====
Provision (benefit) for income taxes:
   Current:
      Germany ............................................................         18           25     39
      U.S ................................................................          1          (67)   (31)
      Other ..............................................................         20           32     40
                                                                                  ---          ---   ----
            Total current ................................................         39          (10)    48
                                                                                  ---          ---   ----
   Deferred:
      Germany ............................................................         13           (7)    25
      U.S ................................................................        129           68    (16)
      Other ..............................................................         10           (3)     2
                                                                                  ---          ---   ----
            Total deferred ...............................................        152           58     11
                                                                                  ---          ---   ----
            Income tax provision .........................................        191           48     59
                                                                                  ===          ===   ====
Effective income tax rate reconciliation:
   A reconciliation of income tax provision (benefit) for the nine months
   ended September 30, 2004 and the years ended December 31, 2003 and 2002
   determined by using the applicable German statutory rate of 40% for
   2004, 41% for 2003 and 40% for 2002 as follows:

   Income tax provision (benefit) computed at statutory tax rates ........         41           73     76
      Increase (decrease) in taxes resulting from:
         Change in valuation allowance ...................................        170           (6)   (28)
         Equity income and dividends .....................................         (2)           4     15
         U.S. foreign tax credit/Subpart F income ........................          1            3      2
         U.S. tax rate differentials .....................................          1           (3)     7
         Other foreign tax rate differentials ............................        (36)         (35)   (35)
         Valuation adjustments in subsidiaries ...........................         --            7     16
         Change in statutory German trade tax rate .......................         --           (3)    --
         Adjustment for prior years taxes ................................          6            6     --
         Other ...........................................................         10            2      6
                                                                                 ----         ----   ----
      Income tax provision ...............................................        191           48     59
                                                                                 ====         ====   ====


     Celanese recognized income tax expense of (euro)191 million, (euro)48
million and (euro)59 million for the nine months ended September 30, 2004 and
for the years ended December 31, 2003 and 2002, respectively.

     The effective tax rate for Celanese in 2004 was 185 percent compared to 27
percent in 2003 and 31 percent in 2002. This adverse affect was primarily due to
the recording of a full valuation allowance against the U.S. net operating loss
("NOL") tax benefit. This valuation allowance was triggered by the BCP
acquisition and the corresponding limitation on the utilization of the NOL
carryforwards as prescribed under U.S. tax law. The


                                      F-32



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

effective rate was also negatively effected by the application of a full
valuation allowance against the Canadian deferred tax asset. A valuation
allowance is provided when it is more likely than not that a deferred tax asset,
all or in part, will not be realized.

     In comparison to the German statutory tax rate, the 2003 effective rate was
favorably affected by unrepatriated low-taxed earnings, favorable settlement of
prior year (1996) taxes in the U.S., equity earnings from Polyplastics Co. Ltd.
which are excluded from U.S. taxable income, and utilization of a U.S. capital
loss carryforward that had been subject to a valuation allowance. The effective
tax rate was unfavorably affected in 2003 by dividend distributions from
subsidiaries and writedowns of certain German corporate income and trade tax
benefits related to prior years.

     In comparison to the German statutory tax rate, 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 equity investments
and the reversal of a tax-deductible writedown in 2000 of a German investment.

     The tax effects of the temporary differences which give rise to a
significant portion of deferred tax assets and liabilities are as follows:

                                                   AS OF           AS OF
                                               SEPTEMBER 30,   DECEMBER 31,
                                                    2004           2003
                                               -------------   ------------
                                                   (IN (EURO) MILLIONS)
                                               ----------------------------
Pension and postretirement obligations......        357             289
Accrued expenses ...........................         93              96
Net operating loss carryforwards ...........        263             286
Investments ................................         18              28
Other ......................................         59              53
                                                   ----            ----
   Subtotal ................................        790             752

Valuation allowance (1) ....................       (256)           (127)
                                                   ----            ----
   Deferred tax assets .....................        534             625
                                                   ----            ----

Depreciation ...............................         96             164
Interest ...................................          3               3
Inventory ..................................         23              18
Other ......................................         18               1
                                                   ----            ----
   Deferred tax liabilities ................        140             186
                                                   ----            ----
      Net deferred tax assets ..............        394             439
                                                   ====            ====

(1) Includes adjustments for discontinued operations of (euro)15 million and
other adjustments including the expiration of net operating losses previously
subject to a full valuation allowance. These account for the primary differences
with respect to items which are not reflected in the effective income tax rate
reconciliation.

     Celanese has established valuation allowances primarily in the U.S. for
federal and state net operating loss carryforwards, federal capital loss
carryforwards, and Mexican net operating loss carryforwards which may not be
realizable. As stated above, Celanese has also established a full valuation
allowance against its Canadian deferred tax asset.

     At September 30, 2004, Celanese has net operating loss carryforwards of
approximately (euro)204 million for Germany and Mexico, with various expiration
dates. The U.S. federal net operating loss carryforwards are approximately
(euro)392 million and are subject to limitation as mentioned above with various
expiration dates. In


                                      F-33



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

addition, Celanese had U.S. capital loss carryforwards of (euro)84 million which
expired subsequent to September 30, 2004.

     Provisions have not been made for income taxes or foreign withholding taxes
on 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.

     The income tax (benefit) expense for the nine months ended September 30,
2004 and the years ended December 31, 2003 and 2002 was allocated to continuing
operations and accumulated other comprehensive income. The aggregate tax expense
(benefit) amounts allocated to accumulated other comprehensive income, for
unrealized gains (losses) on securities, additional minimum pension liabilities
and unrealized gains (losses) on derivative contracts was (euro)(71) million,
(euro)8 million and (euro)(121) million for the nine months ended September 30,
2004 and the years ended December 31, 2003 and 2002, respectively.

15.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES



                                                           AS OF           AS OF
                                                       SEPTEMBER 30,   DECEMBER 31,
                                                       -------------   ------------
                                                            2004            2003
                                                           -----           -----
                                                           (IN (EURO) MILLIONS)
                                                       ----------------------------

Trade payables - third party and affiliates.........         465             468
Accrued salaries and benefits.......................         138             126
Accrued environmental (See Note 26).................          19              28
Accrued restructuring...............................          31              32
Insurance loss reserves (See Note 28)...............         102             115
Accrued legal.......................................         111             113
Other...............................................         207             313
                                                           -----           -----
   Total accounts payable and accrued liabilities...       1,073           1,195
                                                           =====           =====


     As of December 31, 2003, the Other caption above includes a
reclassification from Other liabilities on the consolidated balance sheet of
approximately (euro)44 million in anticipation of an early payment of an
obligation under a separate agreement with Dow, which was accelerated upon the
close of the sale of the acrylates business. As of December 31, 2003, the total
liability recorded within Other associated with this matter was (euro)80
million, including interest. This amount was paid in February 2004. (See Note 7)

     As of September 30, 2004, accrued legal above includes (euro)105 million of
liabilities related to sorbates matters (See Note 25), of which (euro)23 million
was reclassed from other long-term liabilities during 2003.


                                      F-34



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

16.  DEBT

SHORT-TERM BORROWINGS AND CURRENT INSTALLMENTS OF LONG-TERM DEBT



                                                 AS OF           AS OF      WEIGHTED AVERAGE
                                             SEPTEMBER 30,   DECEMBER 31,    INTEREST RATES
                                             -------------   ------------   ----------------
                                                  2004           2003         2004     2003
                                                  ----           ----         ----     ----
                                                           (IN (EURO) MILLIONS)
                                             -----------------------------------------------

Current installments of long-term debt....         21             38          5.4%     5.9%
Short-term borrowings from Affiliates.....         80             79          2.0%     2.0%
Other.....................................          1             --          2.8%
                                                  ---            ---
   Total short-term borrowings and current
      installments of long-term debt......        102            117
                                                  ===            ===


     As a result of BCP's acquisition of Celanese, Celanese canceled its
previously existing revolving credit lines and was renegotiating its $120
million ((euro)97 million) trade receivable securitization program, thus, the
Company has no availability or access to credit facilities. Additionally,
Celanese no longer has a commercial paper program. Celanese had outstanding
letters of credit amounting to (euro)143 million at September 30, 2004 and
(euro)118 million at December 31, 2003.

LONG-TERM DEBT



                                                                         AS OF           AS OF
                                                                     SEPTEMBER 30,   DECEMBER 31,
                                                                     -------------   ------------
                                                                          2004           2003
                                                                          ----           ----
                                                                         (IN (EURO) MILLIONS)
                                                                     ----------------------------

Term notes:
   6.125% notes, due 2004.........................................         --              20
   7.125% medium-term notes, due 2009.............................         11              11
Variable rate loans with interest rates adjusted periodically:
   Due in 2003, interest rate of 4.47%............................         --              --
   Due in 2003, interest rate of 1.49%............................         --              --
   Due in 2005, interest rate of 1.55%............................         --              20
   Due in 2006, interest rate of 4.47%............................         --              --
   Due in 2008, interest rate of 1.55%............................         --             119
   Due in 2009, interest rate of 2.90%............................         --              48
   Due in 2011, interest rate of 4.13%, note with affiliate
      (uncollateralized)..........................................        289              --
Pollution control and industrial revenue bonds, interest rates
   ranging from 5.2% to 6.7%, due at various dates through 2030...        168             165
Obligations under capital leases and other secured borrowings
   due at various dates through 2018..............................         38              42
                                                                          ---             ---
      Subtotal....................................................        506             425
         Less: Current installments of long-term debt.............         21              38
                                                                          ---             ---
            Total long-term debt..................................        485             387
                                                                          ===             ===


     In connection with BCP's acquisition of Celanese, CAC became a party to
credit facilities whereby substantially all of the assets of CAC and its U.S.
subsidiaries, as well as 65% of the shares of foreign subsidiaries directly
owned by CAC are pledged and/or mortgaged as collateral to third party lenders.
CAC and its U.S. subsidiaries have access to approximately $608 million
((euro)490 million) under these credit facilities. CAC also borrowed $359
million ((euro)289 million) from BCP Caylux Holdings Luxembourg S.C.A ("BCP
Caylux") at a variable rate, a portion of which was used to repay $175 million
((euro)140 million) of debt, scheduled to mature in 2005 and 2008 and (euro)48
million of additional debt scheduled to mature in 2009. The $359 million
((euro)289 million) from BCP Caylux was also used to prefund pension
obligations. As of September 30, 2004, approximately 94% of the long-term
borrowings above are denominated in U.S. dollars, with the remaining amounts
denominated in euros. (See Note 30)


                                      F-35



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The maturities in 2005 and thereafter, including short-term borrowings, are
as follows:

                       TOTAL
                --------------------
                (IN (EURO) MILLIONS)
                --------------------
2005.........            102
2006.........             24
2007.........             10
2008.........              2
2009.........             12
Thereafter...            437
                         ---
   Total ....            587
                         ===

     Celanese recorded interest expense, net of amounts capitalized, of (euro)27
million, (euro)43 million and (euro)59 million for the nine months ended
September 30, 2004 and for the years ended December 31, 2003 and 2002,
respectively. Interest expense on the borrowings noted above, including the
effects of related interest rate swaps and the adjustment for capitalized
interest was (euro)24 million, (euro)33 million and (euro)48 million,
respectively. The remaining portion related to the interest component of
discounted environmental liabilities, financial instruments, and other
liabilities.

17.  OTHER LIABILITIES



                                              AS OF SEPTEMBER 30,   AS OF DECEMBER 31,
                                              -------------------   ------------------
                                                     2004                  2003
                                                     ----                  ----
                                                        (IN (EURO) MILLIONS)
                                              ----------------------------------------

Pension and postretirement medical and
   life obligations (See Note 20)..........          1,022                   922
Environmental liabilities (See Note 26)....            100                    98
Insurance liabilities (See Note 28)........            109                   136
Other......................................            169                   153
                                                     -----                 -----
   Total other liabilities.................          1,400                 1,309
                                                     =====                 =====


     Prior to the adoption of SFAS No. 143, Celanese had (euro)31 million of
post closure liabilities included within environmental liabilities. As provided
under SFAS No. 143, such amounts were reversed, and (euro)36 million of asset
retirement obligations were established. As of September 30, 2004, estimated
costs for asset retirement obligations were approximately (euro)49 million, of
which (euro)47 million is included as a component of other long-term liabilities
included in the Other caption above. This amount primarily represents Celanese's
estimated future liability for site demolition and for various landfill closures
and the associated monitoring costs at these operating sites.


                                      F-36



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Changes in Celanese's asset retirement obligations can be reconciled as follows:

                                                 AS OF AND FOR THE PERIODS ENDED
                                                 -------------------------------
                                                   SEPTEMBER 30,   DECEMBER 31,
                                                        2004           2003
                                                   -------------   -------------
                                                       (IN (EURO) MILLIONS)
                                                   ----------------------------
Balance at beginning of period ...............           37             36
Additions ....................................           10              9
Accretion ....................................            2              2
Payments .....................................           (1)            (3)
Revisions to cash flow estimates .............           --             (1)
Exchange rate changes ........................            1             (6)
                                                        ---            ---
Balance at end of period .....................           49             37
                                                        ===            ===

     In October 2004, the Company announced plans to consolidate its tow
production to fewer sites by 2007 and to discontinue the production of acetate
filament by mid-2005. The restructuring is being implemented to increase
efficiency, reduce overcapacity and to focus on products and markets that
provide long-term value. The restructuring resulted in (euro)10 million of
depreciation expense, of which (euro)7 million was recorded by the Acetate
Products segment and (euro)3 million by the Chemical Products segment, for
related asset retirement obligations for the nine months ended September 30,
2004.

     The Company has identified but not recognized asset retirement obligations
related to substantially all of its existing operating facilities. Examples of
these types of obligations include demolition, decommissioning, disposal and
restoration activities. Legal obligations exist in connection with the
retirement of these assets upon closure of the facilities or abandonment of the
existing operations. However, Celanese currently plans on continuing operations
at these facilities indefinitely and therefore a reasonable estimate of fair
value cannot be determined at this time. In the event that Celanese considers
plans to abandon or cease operations at these sites, an asset retirement
obligation will be reassessed at that time. If certain operating facilities were
to close, the related asset retirement obligations could significantly affect
our results of operations and cash flows.

18.  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:



                                                     NINE MONTHS
                                                        ENDED        YEARS ENDED
                                                    SEPTEMBER 30,    DECEMBER 31,
                                                    -------------   -------------
                                                         2004        2003    2002
                                                         ----       -----   -----
                                                         (IN (EURO) MILLIONS)
                                                    -----------------------------

Cost of raw materials, supplies and merchandise..       1,623       2,452   2,228
Cost of services purchased (primarily energy)....         263         355     328
                                                        -----       -----   -----
   Total cost of raw materials and supplies......       1,886       2,807   2,556
                                                        =====       =====   =====


     Total cost of raw materials and supplies for discontinued operations were
(euro)10 million, (euro)118 million and (euro)294 million for the nine months
ended September 30, 2004 and the years ended December 2003 and 2002,
respectively.


                                      F-37



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

19.  PERSONNEL EXPENSES

     The following personnel expenses reflect total costs incurred by continuing
and discontinued operations in the respective periods:



                                                                        NINE MONTHS
                                                                           ENDED        YEARS ENDED
                                                                       SEPTEMBER 30,   DECEMBER 31,
                                                                       -------------   ------------
                                                                           2004         2003   2002
                                                                           ----         ----   ----
                                                                           (IN (EURO) MILLIONS)
                                                                       ----------------------------

Wages and salaries .................................................        365          536    629
Social security contributions ......................................         56           75     77
Other ..............................................................         32           64     61
                                                                            ---          ---    ---
   Personnel expenses excluding pensions and similar benefits and
      restructuring severance expenses .............................        453          675    767
Pensions and similar benefits ......................................         85          102    104
                                                                            ---          ---    ---
   Personnel expenses excluding restructuring severance expenses ...        538          777    871
Restructuring severance expenses ...................................         42           16     11
                                                                            ---          ---    ---
      Total cost of personnel expenses .............................        580          793    882
                                                                            ===          ===    ===


     Total costs of personnel expenses for discontinued operations were (euro)1
million, (euro)18 million and (euro)96 million for the nine months ended
September 30, 2004 and the years ended December 31, 2003 and 2002, respectively.

20.  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 the North
America and Europe. As of September 30, 2004, Celanese's U.S. qualified pension
plan represented greater than 85 percent and 80 percent of Celanese's pension
plan assets and liabilities, respectively. Effective January 1, 2001, for
Celanese's U.S. qualified pension plan, the Company began providing pension
benefits for certain new employees hired in the United States after December 31,
2000 based upon a new Cash Balance Plan formula. Independent trusts or insurance
companies administer the majority of these plans. Actuarial valuations for these
plans are prepared annually.

     Celanese sponsors various defined contribution plans in Europe and North
America covering certain employees. Employees may contribute to these plans and
Celanese will match these contributions in varying amounts. Celanese's
contributions to the defined contribution plans are based on specified
percentages of employee contributions and aggregated (euro)6 million for the
nine months ended September 30, 2004, (euro)10 million in 2003 and (euro)12
million in 2002.

     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


                                      F-38



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

cost for coverage is shared between Celanese and the employee, and is determined
based upon completed years of service.

     In 2003, the Celanese U.S. postretirement medical plan was amended to
introduce defined dollar caps for pre-1993 retirees. The amendments included:
pre-age 65 cap was set to $9,600 and the post-age 65 cap was set to $3,000; the
elimination of pre-1993 retiree contributions until the cap is reached; moving
all retirees to the managed choice program; and introduction of relatively minor
changes to the retiree cost sharing in order to simplify administration. These
changes were approved by the Board in June 2003 and were reflected with a
remeasurement of the retiree medical plan resulting in the establishment of a
(euro)59 million negative prior service cost base as these changes become
effective for participants July 1, 2004.

     In December 2003, the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (the "Act") was enacted. The Act established a
prescription drug benefit under Medicare known as "Medicare Part D." As a result
of this new federally funded benefit, Celanese expects a reduction to the
post-65 medical per capita claims cost in its postretirement plan. Accordingly,
the Company treated the resulting (euro)5 million reduction in APBO at July 1,
2004 as an actuarial gain. The introduction of the federal benefit reduced the
Company's FAS 106 net periodic benefit cost for the fiscal year ending September
30, 2004 by less than (euro)1 million, due to lower service cost and interest,
as well as amortization of the unrecognized net gain.



                                                                   PENSION BENEFITS            POSTRETIREMENT BENEFITS
                                                             ----------------------------   ----------------------------
                                                                 AS OF           AS OF          AS OF          AS OF
                                                             SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,   DECEMBER 31,
                                                             -------------   ------------   -------------   ------------
                                                                 2004            2003           2004            2003
                                                                 ----            ----           ----            ----
                                                                                 (IN (EURO) MILLIONS)
                                                             -----------------------------------------------------------

CHANGE IN PROJECTED BENEFIT OBLIGATION
   Projected benefit obligation at beginning of period ...       2,223           2,439           336            464
   Service cost ..........................................          24              32             2              2
   Interest cost .........................................         104             151            15             24
   Participant contributions .............................           1               1             8             10
   Plan amendments .......................................           1               4            --            (59)
   Actuarial losses ......................................         160             138             5             14
   Acquisitions ..........................................          --              --             1             --
   Special termination benefits ..........................          10              (1)           --             --
   Settlements ...........................................          (2)             (1)           --             --
   Curtailments ..........................................          --              --            (1)            --
   Benefits paid .........................................        (109)           (150)          (34)           (49)
   Change in measurement dates ...........................          --               5            --             --
   Foreign currency exchange rate changes ................          38            (395)            6            (70)
                                                                 -----           -----           ---            ---
      Projected benefit obligation at end of period ......       2,450           2,223           338            336
                                                                 =====           =====           ===            ===




                                                                   PENSION BENEFITS            POSTRETIREMENT BENEFITS
                                                             ----------------------------   ----------------------------
                                                                 AS OF           AS OF          AS OF          AS OF
                                                             SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,   DECEMBER 31,
                                                             -------------   ------------   -------------   ------------
                                                                 2004            2003           2004            2003
                                                                 ----            ----           ----            ----

WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE
   BENEFIT OBLIGATIONS AS OF
   Discount rate:
      U.S. plans                                                 6.00%           6.25%          6.00%           6.25%
      International plans                                        5.65%           5.70%          5.95%           6.00%
         Combined                                                5.95%           6.20%          6.00%           6.25%
   Rate of compensation increase:
      U.S. plans                                                 4.00%           4.00%             --              --
      International plans                                        3.25%           2.25%             --              --
         Combined                                                3.80%           3.60%             --              --



                                      F-39



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



                                                                       PENSION BENEFITS            POSTRETIREMENT BENEFITS
                                                                 ----------------------------   ----------------------------
                                                                     AS OF          AS OF           AS OF           AS OF
                                                                 SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,   DECEMBER 31,
                                                                 -------------   ------------   -------------   ------------
                                                                      2004           2003            2004           2003
                                                                      ----           ----            ----           ----
                                                                                     (IN (EURO) MILLIONS)
                                                                 -----------------------------------------------------------

CHANGE IN PLAN ASSETS
   Fair value of plan assets at beginning of period ..........       1,527          1,501             --              --
   Actual return on plan assets ..............................          55            303             --              --
   Company contributions .....................................         129            136             25              39
   Participant contributions .................................           1              1              9              10
   Settlements ...............................................          (2)            (1)            --              --
   Benefits paid .............................................        (109)          (150)           (34)            (49)
   Change in measurement dates ...............................          --              2             --              --
   Foreign currency exchange rate changes ....................          29           (265)            --              --
                                                                     -----          -----           ----            ----
      Fair value of plan assets at end of period .............       1,630          1,527             --              --
                                                                     =====          =====           ====            ====

FUNDED STATUS AND NET AMOUNTS RECOGNIZED
   Plan assets in excess of (less than) benefit obligation ...        (820)          (696)          (338)           (336)
   Unrecognized prior service cost (benefit) .................          28             31            (54)            (56)
   Unrecognized actuarial loss ...............................         858            657            141             139
                                                                     -----          -----           ----            ----
      Net amount recognized in the consolidated
         balance sheets ......................................          66             (8)          (251)           (253)
                                                                     =====          =====           ====            ====

AMOUNTS RECOGNIZED IN THE ACCOMPANYING CONSOLIDATED
   BALANCE SHEETS CONSIST OF:
   Accrued benefit liability .................................        (696)          (585)          (251)           (253)
   Intangible asset(1) .......................................          27             31             --              --
   Additional minimum liability(2) ...........................         735            546             --              --
                                                                     -----          -----           ----            ----
      Net amount recognized in the consolidated
         balance sheets ......................................          66             (8)          (251)           (253)
                                                                     =====          =====           ====            ====


(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.

     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 September 30, 2004 were (euro)2,436 million,
(euro)2,316 million and (euro)1,615 million, respectively and as of December 31,
2003 were (euro)2,209 million, (euro)2,102 million and (euro)1,512 million,
respectively.

     The accumulated benefit obligation for all defined benefit pension plans
was (euro)2,328 million and (euro)2,114 million at September 30, 2004 and
December 31, 2003, respectively.

     Celanese uses a measurement date of December 31 for its pension and other
postretirement benefit plans.


                                      F-40



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     In 2003, Celanese changed the actuarial valuation measurement date for its
Canadian pension and other postretirement benefit plans from September 30 to
December 31. The net effect of this change is not material.

     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 (euro) 9 million ((euro) 0.18 per share), net of income
taxes of (euro) 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 (euro) 14 million.



                                                      PENSION BENEFITS             POSTRETIREMENT BENEFITS
                                                ----------------------------    ----------------------------
                                                    AS OF           AS OF           AS OF          AS OF
                                                SEPTEMBER 30,   DECEMBER 31,    SEPTEMBER 30,   DECEMBER 31,
                                                -------------   ------------    -------------   ------------
                                                    2004         2003   2002         2004        2003   2002
                                                    ----         ----   ----         ----        ----   ----
                                                                     (IN (EURO) MILLIONS)
                                                -------------------------------------------------------------

   COMPONENTS OF NET PERIODIC BENEFIT COST
            FOR THE PERIODS ENDED
Service cost.................................         24           32     35           2           2      3
Interest cost................................        104          151    176          15          24     31
Expected return on plan assets...............       (106)        (155)  (178)         --          --     --
Amortization of prior service cost...........          4            7      8          (4)         (3)    (1)
Recognized actuarial loss....................         18           14      3           6           7      7
Amortization of the unamortized obligation...         --           (1)    (2)         --          --     --
Curtailment loss (gain)......................          1           --     (1)         --          --     --
Special termination charge...................         10           --      -          --          --     --
Settlement loss..............................          1            1      2          --          --     --
Change in measurement dates..................         --           (1)   (15)         --           1      1
                                                    ----         ----   ----         ---         ---    ---
   Net periodic benefit cost.................         56           48     28          19          31     41
                                                    ====         ====   ====         ===         ===    ===


     On January 1, 2004, Celanese's health care cost trend assumption for its US
postretirement medical plan's net periodic benefit cost was 11% per year grading
down 1% per year to an ultimate trend of 5%.


                                      F-41



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



                                           PENSION BENEFITS            POSTRETIREMENT BENEFITS
                                     ----------------------------   ----------------------------
                                         AS OF           AS OF          AS OF          AS OF
         WEIGHTED-AVERAGE            SEPTEMBER 30,   DECEMBER 31,   SEPTEMBER 30,   DECEMBER 31,
   ASSUMPTIONS USED TO DETERMINE     -------------   ------------   -------------   ------------
  NET COST FOR THE PERIODS ENDED         2004         2003   2002       2004         2003   2002
----------------------------------       ----         ----   ----       ----         ----   ----

Discount rate:
   U.S. plans ....................       6.25%        6.75%  7.25%      6.25%        6.75%  7.25%
   International plans ...........       5.70%        6.30%  6.90%      6.00%        6.50%  7.10%
      Combined ...................       6.20%        6.70%  7.20%      6.25%        6.75%  7.25%
Expected return on plan assets:
   U.S. plans ....................       8.50%        9.00%  9.00%        --           --     --
   International plans ...........       6.40%        7.10%  7.60%        --           --     --
      Combined ...................       8.25%        8.85%  8.90%        --           --     --
Rate of compensation increase:
   U.S. plans ....................       4.00%        4.00%  3.40%        --           --     --
   International plans ...........       2.25%        2.70%  3.30%        --           --     --
      Combined ...................       3.60%        3.75%  3.40%        --           --     --


     During the nine months ended September 30, 2004, the additional minimum
liability increased by (euro) 189 million. The additional minimum liability
adjustment is principally a result of lower than expected rate of return on plan
assets and the reduction in the discount rate. As a result of these adjustments,
accumulated other comprehensive income (loss) in the consolidated statement of
shareholders' equity was reduced by (euro) 115 million representing the
additional minimum pension liability and (euro) 6 million of foreign currency
translation, which is net of an income tax benefit of (euro) 74 million.

     Included in the pension obligations above are accrued liabilities relating
to supplemental retirement plans for certain employees amounting to (euro) 190
million and (euro) 168 million as of September 30, 2004 and December 31, 2003,
respectively. Pension expense relating to these plans included in net periodic
benefit cost totaled (euro) 11 million, (euro) 16 million and (euro) 20 million
for the nine months ended September 30, 2004 and for the years ended December
31, 2003 and 2002, respectively. To fund these obligations, Celanese has
established non-qualified trusts, included within other non-current assets,
which had market values of (euro) 103 million and (euro) 103 million at
September 30, 2004 and December 31, 2003, respectively, and recognized income of
(euro) 1 million and (euro) 3 million for the nine months ended September 30,
2004 and the year ended December 31, 2003, respectively. There was no income
recorded in 2002 related to these trusts. In 2003, Celanese contributed (euro)
16 million to these trusts from proceeds it received from the demutualization of
an insurance carrier. The gain associated with these proceeds was included
within interest and other income, net, in the consolidated statement of
operations.

     The asset allocation for the Company's qualified U.S. defined benefit
pension plan as of September 30, 2004 and at the end of 2003, and the target
allocation ranges for 2005 by asset category is presented below. The fair value
of plan assets for this plan was (euro) 1,424 million and (euro) 1,412 million
as of September 30, 2004 and at the end of 2003, respectively. These asset
amounts represent approximately 87% of the Company's total pension assets at
September 30, 2004 and 93% at December 31, 2003. The expected long-term rate of
return on these assets was 8.5% at September 30, 2004 and 9.0% at December 31,
2003.


                                      F-42



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

                                    PERCENTAGE OF PLAN ASSETS AT
                         TARGET     ----------------------------
                       ALLOCATION   SEPTEMBER 30,   DECEMBER 31,
                       ----------   -------------   ------------
ASSET CATEGORY - US       2005           2004           2003
--------------------     -----           ----           ----
Equity securities...     55-80%           73%            74%
Debt securities.....     25-30%           26%            25%
Real Estate.........       0-5%            0%             0%
Other...............       0-1%            1%             1%
                                         ---            ---
   TOTAL ...........                     100%           100%
                                         ===            ===

     Plan assets did not include any investment in Celanese AG ordinary shares
during the periods presented.

     The asset allocation for the Company's Canadian main defined benefit
pension plan as of September 30, 2004 and at the end of 2003 and the target
allocation ranges for 2005 by asset category is presented below. The fair value
of plan assets for this plan was (euro) 96 million and (euro) 91 million as of
September 30, 2004 and at December 31, 2003, respectively. These asset amounts
represent approximately 6% of the Company's total pension assets at September
30, 2004 and December 31, 2003, respectively. The expected long-term rate of
return on these plan assets was 7.5% at September 30, 2004 and December 31,
2003, respectively.

                                       PERCENTAGE OF PLAN ASSETS AT
                            TARGET     ----------------------------
                          ALLOCATION   SEPTEMBER 30,   DECEMBER 31,
                          ----------   -------------   ------------
ASSET CATEGORY - CANADA      2005           2004           2003
-----------------------     -----           ----           ----
Equity securities......     55-75%           65%            64%
Debt securities........     25-45%           31%            30%
Real Estate............      0-10%            3%             3%
Other..................       0-1%            1%             3%
                                            ---            ---
   TOTAL ..............                     100%           100%
                                            ===            ===

     The Company's other post-retirement benefit plans are unfunded.

     The financial objectives of the Company's qualified U.S. and Canadian
pension plans are established in conjunction with a comprehensive review of each
plan's liability structure. Asset allocation policy is based on detailed
asset/liability analysis. In developing investment policy and financial goals,
consideration is given to the plan's demographics, the returns and risks
associated with alternative investment strategies, and the current and projected
cash, expense and funding ratios of the plan. A formal asset/liability mix study
of the plan is undertaken every 3 to 5 years or whenever there has been a
material change in plan demographics, benefit structure or funding status and
investment market. The Company has adopted a long-term investment horizon such
that the risk and duration of investment losses are weighed against the
long-term potential for appreciation of assets. Although there cannot be
complete assurance that these objectives will be realized, it is believed that
the likelihood for their realization is reasonably high, based upon the asset
allocation chosen and the historical and expected performance of the asset
classes utilized by the plans. The intent is for investments to be broadly
diversified across asset classes, investment styles, investment managers,
developed and emerging markets, business sectors and securities in order to
moderate portfolio volatility and risk. Investments may be in separate accounts,
commingled trusts, mutual funds and other pooled asset portfolios provided they
all conform to fiduciary standards.

     External investment managers are hired to manage the Company's pension
assets. An investment consultant assists with the screening process for each new
manager hire. Over the long-term, the investment portfolio is expected to earn
returns that exceed a composite of market indices that are weighted to match
each plan's target asset allocation. Long-term is considered three (3) to five
(5) years; however, incidences of underperformance are


                                      F-43



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

analyzed. The portfolio return should also (over the long-term) meet or exceed
the return used for actuarial calculations in order to minimize future pension
contributions and escalation in pension expense.

     The expected rate of return assumptions for plan assets are based mainly on
historical performance achieved over a long period of time (15 to 20 years)
encompassing many business and economic cycles. Modest adjustments, upward and
downward, may be made to those historical returns to reflect future capital
market expectations; these expectations are typically derived from expert advice
from the investment community and surveys of peer company assumptions.

     As a result of the (euro) 85 million contribution made to the German plans
for the nine months ended September 30, 2004, the four largest German plans, for
the first time, have pension plan assets. The asset allocation for the Company's
German defined benefit pension plans as of September 30, 2004, and the target
allocation ranges for 2005 by asset category are presented below. The fair value
of plan assets for these plans was (euro) 86 million as of September 30, 2004.
These asset amounts represent approximately 5% of the Company's total pension
assets at September 30, 2004. The expected long-term rate of return on these
assets was 5.5% at September 30, 2004.

                                        PERCENTAGE OF PLAN ASSETS AT
                             TARGET     ----------------------------
                           ALLOCATION   SEPTEMBER 30,   DECEMBER 31,
                           ----------   -------------   ------------
ASSET CATEGORY - GERMANY      2005           2004           2003
------------------------      ----           ----           ----
Equity securities.......       30%             0%            n/a
Debt securities.........       70%             0%            n/a
Real Estate.............        0%             0%            n/a
Other...................        0%           100%            n/a
                                             ---
   TOTAL ...............                     100%
                                             ===

     Plan assets did not include any investment in Celanese AG ordinary shares
during the periods presented.

     As of September 30, 2004, Other consisted of short-term bank deposits,
comprised of money market accounts. Given the timing of the contributions to the
German plans, the plans investment managers did not have the opportunity to
invest the funds based upon the investment guidelines.

     External investment managers have been hired to manage the Company's German
pension assets going forward. For the equity securities portion, the goal is to
approximate the development of the Euro Stoxx 50 Total Return performance using
a passive equity mandate. For the debt security portion, Celanese uses a
benchmark oriented active fixed income mandate that is oriented towards the
Lehman Euro Aggregate Bond Index.

     The expected rate of return assumptions for plan assets are based mainly on
historical performance achieved over a long period of time (15 to 20 years)
encompassing many business and economic cycles. Modest adjustments, upward and
downward, may be made to those historical returns to reflect future capital
market expectations; these expectations are typically derived from expert advice
from the investment community and surveys of peer company assumptions.


                                      F-44



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The table below reflects the pension benefits expected to be paid from the
plan or from Celanese's assets. The postretirement benefits represent both the
Company's share of the benefit cost and the participants' share of the cost,
which is funded by participant contributions to the plan. Expected contributions
reflect amounts expected to be contributed to funded plans.

                                                        PENSION   POSTRETIREMENT
                                                       BENEFITS      BENEFITS
                                                       --------   --------------
                                                          (IN (EURO) MILLIONS)
                                                       -------------------------
EMPLOYER CONTRIBUTIONS
   2005 (projected).................................      237           n/a
EXPECTED BENEFIT PAYMENTS
   2005.............................................      113            36
   2006.............................................      136            34
   2007.............................................      137            32
   2008.............................................      138            31
   2009.............................................      140            30
   2010-2014........................................      808           135

     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:

                                                       ONE PERCENT   ONE PERCENT
                                                         INCREASE      DECREASE
                                                       -----------   -----------
                                                          (IN (EURO) MILLIONS)
                                                       -------------------------
Effect on postretirement obligation.................        2            (2)

     The effect of a one percent increase or decrease in the assumed health care
cost trend rate would have less than a (euro)1 million impact on service and
interest cost.

     The following table represents additional benefit liabilities and other
similar obligations:

                                                        AS OF           AS OF
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         2004           2003
                                                    -------------   ------------
                                                        (IN (EURO) MILLIONS)
                                                    ----------------------------
OTHER OBLIGATIONS
Long-term disability.............................         62             62
Other............................................         13             22
                                                         ---            ---
   Total.........................................         75             84
                                                         ===            ===

21. SHAREHOLDERS' EQUITY

NUMBER OF SHARES AUTHORIZED AND ISSUED

     In 2002, Celanese retired 1,125,000 shares held in treasury, which resulted
in a (euro)3 million reduction of common stock, a (euro)22 million reduction in
additional paid-in capital and a (euro)25 million reduction in treasury stock.
Celanese had authorized and issued 54,790,369 shares of common stock of no par
value at September 30, 2004, December 31, 2003 and 2002.


                                      F-45



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     See table below for share activity:



                                                                         COMMON           COMMON         AUTHORIZED
                                                                         STOCK            STOCK         COMMON STOCK
                                                                    ---------------   -------------   ----------------
                                                                    (AUTHORIZED AND                   (AUTHORIZED, (A)
                                                                        ISSUED)       (OUTSTANDING)      NOT ISSUED)
                                                                    ---------------   -------------   ----------------
                                                                                     (IN WHOLE SHARES)
                                                                    --------------------------------------------------

As of December 31, 2001 .........................................     55,915,369       50,334,891              --
   Retirement of treasury shares ................................     (1,125,000)              --              --
   Shares repurchased into treasury .............................             --         (284,798)             --
   Shares issued to Supervisory Board from treasury .............             --            8,383              --
   Authorized Capital increases pursuant to stock option plan ...             --               --       1,250,000
                                                                      ----------       ----------       ---------
As of December 31, 2002 .........................................     54,790,369       50,058,476       1,250,000
   Shares repurchased into treasury .............................             --         (749,848)             --
   Shares issued to Supervisory Board from treasury .............             --           12,840              --
   Authorized Capital increases pursuant to stock option plan ...             --               --       1,250,000
                                                                      ----------       ----------       ---------
As of December 31, 2003 .........................................     54,790,369       49,321,468       2,500,000
   Shares issued from treasury for exercise of stock options ....             --          560,150              --
                                                                      ----------       ----------       ---------
As of September 30, 2004(b) .....................................     54,790,369       49,881,618       2,500,000
                                                                      ==========       ==========       =========


(a)  Authorized by way of conditional capital.

(b)  560,150 shares of authorized stock can no longer be issued since execution
     of the respective stock options has been funded with treasury stock.

AUTHORIZED AND CONDITIONAL CAPITAL

     At the Annual General Meeting of Celanese held on May 15, 2002 and April 1,
2003, shareholders approved resolutions to increase the Company's share capital
on a contingent basis by up to (euro)3,195,574 through the issuance of up to
1,250,000 ordinary shares, no-par value ("contingent capital") for each of the
two years. As of December 31, 2003, total contingent capital amounted to
(euro)6,391,148 through the issuance of up to 2,500,000 ordinary shares. Out of
this contingent capital, 560,150 shares of authorized stock can no longer be
issued since execution of the respective stock options for the nine months ended
September 30, 2004 has been funded with treasury stock. The contingent capital
increase serves exclusively to grant stock options to members of the board of
management and its group companies as well as to other senior managers of the
Company. The issuance of these shares will be carried out only insofar as stock
options are exercised and are not satisfied by the delivery of existing treasury
shares.

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
April 1, 2003, the shareholders renewed an authorization for the Board of
Management to acquire and hold a maximum of 10 percent of the 54,790,369 shares
authorized and issued at the time of such meeting. The authorization expired on
September 30, 2004.

     During 2003, Celanese repurchased 749,848 shares at a total cost of
(euro)14 million. In 2002, Celanese retired 1,125,000 treasury shares and
repurchased 284,798 shares at a total cost of (euro)6 million.

     There were no shares issued to members of the Supervisory Board for the
nine months ended September 30, 2004. There were 12,840 and 8,383 shares of
treasury stock issued to members of the Supervisory Board as part of their
annual compensation at December 31, 2003 and 2002, respectively.

     Celanese held 4,908,751, 5,468,901 and 4,731,893 shares of treasury stock
as of September 30, 2004 and December 31, 2003 and 2002, respectively.


                                      F-46



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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, acetate, technical polymer
and certain other industrial businesses as well as certain contractual rights
and obligations related to other current and former Hoechst businesses. In the
nine months ended September 30, 2004, Celanese recorded a (euro)2 million, net
of tax of (euro)1 million, increase to additional paid-in capital related to
recoveries due from Hoechst for the antitrust matters in the sorbates industry.
During 2003, Celanese recorded a (euro)39 million, net of tax of (euro)29
million, increase to additional paid-in capital related to recoveries due from
Hoechst for the antitrust matters in the sorbates industry. (See Note 25) In
2002, as a result of a favorable settlement of a demerger liability with
Hoechst, Celanese recorded a (euro)7 million increase to additional paid-in
capital.

     During 2003 and 2002, Celanese granted stock options totaling 0.1 million
and 1.1 million, respectively, and, in accordance with SFAS No. 123, expensed
the fair value of these options. As a result, additional paid-in capital
increased by (euro)2 million during the first nine months of 2004, (euro)5
million in 2003 and (euro)3 million in 2002 to reflect the amortization of the
fair value of the stock options. (See Note 22)

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:



                                                                             UNREALIZED    ACCUMULATED
                                     UNREALIZED                 ADDITIONAL      GAIN/         OTHER
                                       GAIN ON      FOREIGN       MINIMUM     (LOSS) ON   COMPREHENSIVE
                                     MARKETABLE     CURRENCY      PENSION    DERIVATIVE      INCOME/
                                     SECURITIES   TRANSLATION    LIABILITY    CONTRACTS       (LOSS)
                                     ----------   -----------   ----------   ----------   -------------
                                                            (IN (EURO) MILLIONS)
                                     ------------------------------------------------------------------

Balance at December 31, 2001 .....        3           263          (267)         (4)            (5)
   Current-period change .........        2          (174)         (220)         (5)          (397)
                                        ---          ----          ----         ---           ----
Balance at December 31, 2002 .....        5            89          (487)         (9)          (402)
   Current-period change .........        3          (114)           10           5            (96)
                                        ---          ----          ----         ---           ----
Balance at December 31, 2003 .....        8           (25)         (477)         (4)          (498)
   Current-period change .........        3            12          (115)          3            (97)
                                        ---          ----          ----         ---           ----
Balance at September 30, 2004 ....       11           (13)         (592)         (1)          (595)
                                        ===          ====          ====         ===           ====


DIVIDEND POLICY

     At the annual shareholders' meeting on June 15, 2004, Celanese AG
shareholders approved payment of a dividend on the Celanese AG shares for the
fiscal year ended on December 31, 2003 of (euro)0.12 per share. For the short
fiscal year ended on September 30, 2004, Celanese AG will not be able to pay a
dividend to its shareholders due to losses incurred in the Celanese AG statutory
accounts.

     Any minority shareholder of Celanese AG who elects not to accept the
compensation (Abfindungsangebot) offer in connection with the Domination
Agreement will remain a shareholder of Celanese AG and be entitled to receive a
guaranteed fixed annual payment on its shares, in lieu of any future dividends
for any fiscal years commencing after September 30, 2004, as long as the
Domination Agreement remains in effect.


                                      F-47



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The amount of the guaranteed fixed annual payment to be paid to any
minority shareholder who elects to retain their Celanese AG shares was based on
an analysis of the fair enterprise value of Celanese as of the date of the
relevant shareholders' meeting on July 30 and 31, 2004 assuming a full
distribution of profits. Per the Domination Agreement, the gross guaranteed
fixed annual payment is (euro)3.27 per Celanese AG share less certain corporate
taxes.

22. STOCK-BASED COMPENSATION

     At the Annual General Meetings of Celanese on May 15, 2002 and April 1,
2003, shareholders approved the 2002 Celanese Stock Option Plan (the "2002
Plan"), and the 2003 Celanese Stock Option Plan (the "2003 Plan"), respectively.
Each plan authorized the issuance of up to 1.25 million options to purchase
shares of Celanese AG common stock. Options are granted at an exercise price
reflecting the reference price (twenty day average of market price prior to
grant 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 competitors as defined in the
plan over the holding period. All unexercised options expire ten years from the
date of grant. If the market price per Celanese AG 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%.

     On July 8, 2002, Celanese granted 1.1 million stock options relating to the
2002 Plan, at an exercise price of (euro)27.54 per share, to members of the
Board of Management and key employees for the purchase of Celanese AG shares of
common stock. On January 31, 2003, Celanese granted an additional 0.1 million
stock options relating to the 2002 plan, at an exercise price of (euro)23.78 per
share, to individuals who became eligible persons since the last grant for the
purchase of Celanese AG shares of common stock.

     In accordance with SFAS No. 123, the fair value of the 0.1 million options
granted approximated (euro)1 million. As a result of Celanese's market price per
share outperforming the median performance of Celanese's peer group, the fair
value of these options will be recognized over the accelerated vesting period of
two years. For the nine months ended September 30, 2004 and the years ended
December 31, 2003 and 2002, Celanese recognized compensation expense of (euro)2
million, (euro)5 million and (euro)3 million, respectively, for these options to
the consolidated statements of operations with a corresponding increase to
additional paid in capital within shareholders' equity.

     A summary of the activity related to the 2003 Plan and 2002 Plan for the
nine months ended September 30, 2004 and for the years ended December 31, 2003
and 2002 is presented in the table below (stock options in millions):



                                                         2004                        2003                        2002
                                              -------------------------   -------------------------   -------------------------
                                                           WEIGHTED-                   WEIGHTED-                   WEIGHTED-
                                               NUMBER       AVERAGE        NUMBER       AVERAGE        NUMBER       AVERAGE
                                                 OF          GRANT           OF          GRANT           OF          GRANT
                                              OPTIONS   PRICE IN (EURO)   OPTIONS   PRICE IN (EURO)   OPTIONS   PRICE IN (EURO)
                                              -------   ---------------   -------   ---------------   -------   ---------------

Outstanding at beginning of period ........     1.2          27.26          1.1          27.54           --             --
Granted ...................................      --             --          0.1          23.78          1.1          27.54
Exercised .................................    (0.6)         27.54           --             --           --             --
Forfeited .................................    (0.1)         27.14           --             --           --             --
                                               ----          -----          ---          -----          ---          -----
   Outstanding at end of period ...........     0.5          27.01          1.2          27.26          1.1          27.54
                                               ====          =====          ===          =====          ===          =====
   Options exercisable at end of period ...     0.5          27.54           --             --           --             --
                                               ====          =====          ===          =====          ===          =====
   Weighted-average remaining contractual
      life (years) ........................                    7.8                         8.5                         9.5
                                                             =====                       =====                       =====



                                      F-48



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The weighted-average fair value of the options granted during the years
ended December 31, 2003 and 2002 was estimated to be (euro)6.41 per option and
(euro)9.33 per option, respectively, on the date of grant using the
Black-Scholes option-pricing model with the following assumptions:

                                       2003    2002
                                      -----   -----
Expected dividend yield ...........    1.70%   1.70%
Risk-free interest rate ...........    3.29%   4.30%
Expected stock price volatility ...   42.00%  41.00%
Expected life (years) .............       6       6

     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. Of the total Rights granted under this plan,
approximately 8,500 remain outstanding as of September 30, 2004. Celanese
recognized expense of less than (euro)1 million, (euro)20 million and (euro)1
million during the nine months ended September 30, 2004 and the years ended
December 31, 2003 and 2002, 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 (euro)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 AG 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 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 AG
share price on the day of exercise. Of the total Rights granted under this plan,
7,500 remain outstanding as of September 30, 2004. 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 (euro)16.37 per share. Celanese recognized
expense of less than (euro)1 million, (euro)15 million and (euro)2 million for
the 1999 Celanese EPP during the nine months ended September 30, 2004 and the
years ended December 31, 2003 and 2002, 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. At September 30, 2004, 8,650 of the total
Rights granted under this plan remained outstanding. 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 (euro)16.37 per share. Celanese
recognized expense of less than (euro)1 million, (euro)15 million and (euro)1
million for the 1999 Celanese LTIP in the nine months ended September 30, 2004
and the years ended December 31, 2003 and 2002, respectively.


                                      F-49



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     A summary of the activity related to stock appreciation rights plans for
the nine months ended September 30, 2004 and for the years ended December 31,
2003 and 2002 is presented in the table below (Rights in millions):



                                                      2004                       2003                       2002
                                            ------------------------   ------------------------   ------------------------
                                                        WEIGHTED-                  WEIGHTED-                  WEIGHTED-
                                            NUMBER       AVERAGE       NUMBER       AVERAGE       NUMBER       AVERAGE
                                              OF          GRANT          OF          GRANT          OF          GRANT
                                            RIGHTS   PRICE IN (EURO)   RIGHTS   PRICE IN (EURO)   RIGHTS   PRICE IN (EURO)
                                            ------   ---------------   ------   ---------------   ------   ---------------

Outstanding at beginning of period.......     3.1         17.77          5.2         17.54          5.8         17.47
Granted..................................      --            --           --            --          0.1         19.56
Exercised................................    (3.1)        17.77         (2.1)        17.27         (0.6)        16.37
Forfeited................................      --            --           --            --         (0.1)        19.56
                                             ----         -----         ----         -----         ----         -----
   Outstanding at end of period..........      --            --          3.1         17.77          5.2         17.54
                                             ====         =====         ====         =====         ====         =====
   Rights exercisable at end of period...      --            --          3.1         17.77          3.3         16.37
                                             ====         =====         ====         =====         ====         =====


     Beginning in 2000, Celanese offered 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 AG shares during a limited period of time are entitled to receive a 35
percent rebate from Celanese. The SPP was not offered to employees during 2004
or 2003. Compensation expense of (euro)2 million was recognized in 2002 related
to the 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 Rhone-Poulenc to form Aventis in December
1999, the terms and conditions of these compensation programs were modified to
take into account the changed circumstances.

     The 1997 Hoechst SAR Plan and 1998 Hoechst Option Plan, including all
rights and options granted, expired in 2002 and 2003, respectively. There was no
impact on earnings for the nine months ended September 30, 2004 and less than
(euro)1 million of income for the years ended December 31, 2003 and 2002,
respectively, for the 1998 Hoechst Option Plan. Celanese recognized (euro)1
million of income in 2002 for the 1997 Hoechst SAR Plan.


                                      F-50



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

23.  LEASES

     Total minimum rent charged to operations under all operating leases was
(euro)58 million, (euro)83 million and (euro)78 million for the nine months
ended September 30, 2004 and for the years ended 2003 and 2002, respectively.
Future minimum lease payments under rental and lease agreements which have
initial or remaining terms in excess of one year at September 30, 2004 are as
follows:

                                                        CAPITAL   OPERATING
                                                        -------   ---------
                                                       (IN (EURO) MILLIONS)
                                                       --------------------
2005................................................        3        36
2006................................................        3        30
2007................................................        2        25
2008................................................        1        17
2009................................................        1        13
Later years.........................................        4        45
Sublease income.....................................       --        (5)
                                                          ---       ---
   Minimum lease commitments........................       14       161
                                                                    ===
Less amounts representing interest..................        3
                                                          ---
   Present value of net minimum lease obligations...       11
                                                          ===

     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.

24.  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 entered into interest rate swap agreements to reduce the exposure
of interest rate risk inherent in Celanese's outstanding debt by locking in
borrowing rates to achieve a desired level of fixed/floating rate debt depending
on market conditions. At September 30, 2004, Celanese had no interest rate swap
agreements in place. Celanese had open interest rate swaps with a notional
amount of $200 million ((euro)158 million) at December 31, 2003. In the second
quarter of 2004, Celanese recorded a loss of (euro)3 million in interest and
other income, net associated with the early termination of its $200 million
((euro)165 million) interest rate swap. During 2003, Celanese recorded a loss of
(euro)6 million in interest and other income, net, associated with the early
termination of one of its interest rate swaps. Celanese recognized net interest
expense from hedging activities relating to interest rate swaps of (euro)3
million, (euro)10 million and (euro)13 million for the nine months ended
September 30, 2004 and the years ended December 31, 2003 and 2002. During 2003,
Celanese's interest rate swaps, designated as cash flow hedges, resulted in a
decrease in total assets and total liabilities and an increase in shareholders'
equity of (euro)3 million, (euro)11 million and (euro)5 million, net of related
income tax of (euro)3 million, respectively. Celanese recorded a net gain (loss)
of less than ((euro)1) million, (euro)1 million and ((euro)3) million in
interest and other income, net of the ineffective portion of the interest rate
swaps, during the nine months ended September 30, 2004 and the years ended
December 31, 2003 and 2002, respectively.

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. 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 associated with sales from the
Performance Products segment.


                                      F-51



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     Contracts with notional amounts totaling approximately (euro)498 million
and (euro)606 million at September 30, 2004 and December 31, 2003, respectively,
are predominantly in U.S. dollars, British pound sterling, Japanese yen, and
Canadian dollars. Most 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. For the nine months ended September 30, 2004, Celanese's
foreign currency forward contracts, designated as fair value hedges, resulted in
a decrease in total assets and total liabilities of (euro)26 million and (euro)2
million, respectively. As of September 30, 2004, these contracts hedged a
portion (approximately 81%) of Celanese's U.S. dollar denominated intercompany
net receivables held by euro denominated entities. Related to the unhedged
portion, a net gain of approximately (euro)2 million from foreign exchange gains
or losses was recorded to interest and other income, net for the nine months
ended September 30, 2004. During 2003, Celanese's foreign currency forward
contracts, designated as fair value hedges, resulted in a decrease in total
assets of (euro)7 million and an increase in total liabilities of (euro)1
million. As of December 31, 2003, these contracts hedged a portion
(approximately 85%) of Celanese's U.S. dollar denominated intercompany net
receivables held by euro denominated entities. Related to the unhedged portion,
a net loss of approximately (euro)12 million from foreign exchange gains or
losses was recorded to interest and other income, net in 2003. During the year
ended December 31, 2002, Celanese hedged all of its US. dollar denominated
intercompany net receivables held by euro denominated entities. Therefore, there
was no material net effect from foreign exchange gains or losses in interest and
other income, net. Hedging activities related to intercompany net receivables
yielded cash flows from operating activities of approximately (euro)13 million,
(euro)160 million and (euro)100 million for the nine months ended September 30,
2004 and the years ended December 31, 2003 and 2002, respectively.

Commodity Risk Management

     Celanese's policy for the majority of our natural gas and butane
requirements allows entering into supply agreements and forward purchase or
cash-settled swap contracts. Celanese recognized losses of (euro)1 million,
(euro)3 million and less than (euro)1 million from natural gas swaps and butane
contracts in the nine months ended September 30, 2004 and the years ended
December 31, 2003 and 2002, respectively. There was no material impact on the
balance sheet at September 30, 2004 and December 31, 2003. The effective
portions of unrealized gains and losses associated with the cash-settled swap
contracts are (euro)0 million as of September 30, 2004 and December 31, 2003,
which are recorded as a component of accumulated other comprehensive income
(loss) until the underlying hedged transactions are reported in earnings.
Celanese did not have any open commodity swaps as of September 30, 2004. The
Company had open swaps with a notional amount of (euro)4 million as of December
31, 2003.

Stock Based Compensation Risk Management

     During 2001, Celanese purchased call options for one million shares of
Celanese stock to offset, in part, its exposure of the 2000 Celanese LTIP. These
options had a maturity of two years, a strike price of (euro)19.56 per share and
an average premium of (euro)4.39 per share. These options expired during 2003.
As a result, a net loss of (euro)1 million was recorded to interest and other
income, net in 2003.


                                      F-52



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Fair Value of Financial Instruments

     Summarized below are the carrying values and estimated fair values of
Celanese's financial instruments as of September 30, 2004 and December 31, 2003,
respectively. 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.



                                                 AS OF SEPTEMBER 30,   AS OF DECEMBER 31,
                                                         2004                 2003
                                                 -------------------   ------------------
                                                   CARRYING   FAIR      CARRYING    FAIR
                                                    AMOUNT    VALUE      AMOUNT    VALUE
                                                   --------   -----     --------   -----
                                                           (IN (EURO) MILLIONS)
                                                 ----------------------------------------

Other assets - investments....................        268      268         251      251
Long-term debt................................        485      483         387      415
Pension funds in non-qualified trust..........        103      103         103      103
Debt-related derivative liability.............         --       --          10       10
Foreign exchange-related derivative asset.....         14       14          37       37


     At September 30, 2004 and December 31, 2003, 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 25)

     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 September 30,
2004, as well as quotations from investment bankers and on current rates of debt
for similar type instruments.

25.  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 also Note 26)

Plumbing Actions

     CNA Holdings, Inc. ("CNA Holdings"), a U.S. subsidiary of Celanese,
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-53



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

     Developments under this matter are as follows:

     o    Class certification has been denied in putative class actions pending
          in Florida state court. Although plaintiffs subsequently sought to
          bring actions individually, they were dismissed and are on appeal.

     o    Class certification has been denied in a putative class action pending
          in South Carolina state court. Celanese's motion to dismiss has been
          granted and plaintiffs' appeals up to the U.S. Supreme Court have been
          denied.

     o    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.

     o    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.

     o    The U.S. District Court for the Eastern District of Texas denied
          certification of a putative class action in March 2002, and the
          plaintiffs' appeals have been dismissed by the appellate court.
          Plaintiff's petition to appeal to the U.S. Supreme Court was denied in
          late September 2004.

     o    Four putative class actions are pending in Canadian courts. Two
          matters pending in Ontario were consolidated and denied class
          certification. This consolidated action is currently on appeal. The
          two matters pending in Quebec and British Columbia are "on hold"
          pending the outcome of the Ontario appeal, as in Canadian practice,
          Ontario tends to be the lead jurisdiction in such matters. Dupont and
          Shell have each settled these matters. Their settlement agreements
          have been approved by the courts, although Shell's legal fees are
          awaiting court approval. Consequently, Celanese remains the only
          defendant in these matters.

     o    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.

     o    A putative nationwide class action was filed in federal court in
          Indiana in December 2002, against, among others, CNA Holdings and
          Shell. CNA's motion to dismiss this lawsuit was granted in December
          2003. Plaintiffs appealed to the Seventh Circuit in January 2004 and
          that appeal is ongoing.

     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 $950 million. As of September 30, 2004, the funding is
$1,073 million due to additional contributions and funding commitments, made
primarily by other parties. There are additional pending lawsuits in
approximately ten 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 Celanese.

     In 1995, CNA Holdings and Shell settled the claims of certain individuals,
owning 110,000 property units for an amount not to exceed $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.


                                      F-54



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     CNA Holdings has accrued its best estimate of its share of the plumbing
actions. At September 30, 2004, Celanese had remaining accruals of (euro)60
million for this matter, of which (euro)10 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
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 September 30, 2004, Celanese has a (euro)52 million note receivable
related to a settlement with an insurance carrier. This receivable is discounted
and recorded within Other assets in the consolidated balance sheet as it will be
collected over the next four years.

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 $36 million. This fine was payable
over five years, with the last payment of $5 million being made in June 2004.
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, several civil antitrust actions by sorbates customers, seeking
monetary damages and other relief for alleged conduct involving the sorbates
industry, have been filed in U.S. state and federal courts naming Hoechst,
Nutrinova, and other Celanese subsidiaries, as well as other sorbates
manufacturers, as defendants. Many of these actions have been settled and
dismissed by the court.

     In July 2001, Hoechst and Nutrinova entered into an agreement with the
Attorneys General of 33 states, pursuant to which the statutes of limitations
were tolled pending the states' investigations. This agreement expired in July
2003. Since October 2002, the Attorneys General for New York, Illinois, Ohio,
Nevada, Utah and Idaho filed suit on behalf of indirect purchasers in their
respective states. The Utah, Nevada and Idaho actions have been dismissed as to
Hoechst, Nutrinova and Celanese. A motion for reconsideration is pending in
Nevada. An appeal filed in Idaho was dismissed and that dismissal was upheld by
the Idaho Supreme Court. The Ohio and Illinois actions have been settled. The
New York action is the only Attorney General action still pending. The court in
the New York matter dismissed all antitrust claims; however other state law
claims are still pending. A settlement agreement with the Attorneys General of
Connecticut, Florida, Hawaii, Maryland, South Carolina, Oregon and Washington is
currently being negotiated and these attorney generals have been granted
extensions of the tolling agreement.

     Nutrinova and Hoechst have cooperated with the European Commission since
1998. In May 2002, the European Commission informed Hoechst of its intent to
investigate officially the sorbates industry, and in January 2003, the European
Commission served Hoechst, Nutrinova and a number of competitors with a
statement of objections alleging unlawful, anticompetitive behavior affecting
the European sorbates market. In October 2003, the European Commission ruled
that Hoechst, Chisso Corporation, Daicel Chemical Industries Ltd., The Nippon
Synthetic Chemical Industry Co. Ltd. and Ueno Fine Chemicals Industry Ltd.
operated a cartel in the European sorbates market between 1979 and 1996. The
European Commission imposed a total fine of (euro)138.4 million, of which
(euro)99 million was assessed against Hoechst. The case against Nutrinova was
closed. The fine against Hoechst is based on the European Commission's finding
that Hoechst does not qualify under the leniency policy, is a repeat violator
and, together with Daicel, was a co-conspirator. In Hoechst's favor, the
European Commission gave a discount for cooperating in the investigation.
Hoechst appealed the European Commission's decision in December 2003. Payment of
the obligation is deferred pending a ruling on the appeal.

     Based on the advice of external counsel and a review of the existing facts
and circumstances relating to the sorbates matter, including the status of
government investigations, as well as civil claims filed and settled, Celanese


                                      F-55



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

has remaining accruals of (euro)105 million. This amount is included in current
liabilities at September 30, 2004 for the estimated loss relative to this
matter. Although the outcome of this matter cannot be predicted with certainty,
management's best estimate of the range of possible additional future losses and
fines, including any that may result from the above noted governmental
proceedings, as of September 30, 2004 is between (euro)0 and (euro)7 million.
The estimated range of such possible future losses is management's best estimate
based on the advice of external counsel taking into consideration potential
fines and claims, both civil and criminal, that may be imposed or made in other
jurisdictions.

     Pursuant to the Demerger Agreement, Celanese was assigned the obligation
related to the sorbates matter. However, Hoechst 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, net of tax, from this indemnification. As
of September 30, 2004, Celanese has receivables, recorded within current assets,
relating to the sorbates indemnification from Hoechst totaling (euro)84 million.
In 2003, Celanese recorded a (euro)39 million, net of tax, increase to
additional paid-in capital related to the recoveries from Hoechst for the
special charges discussed above. The remaining accrual and the estimated range
of possible additional 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. Although 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 26)

     These known obligations include the following:

          Demerger Obligations

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

                    o    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:

                         o    Celanese will indemnify Hoechst against those
                              liabilities up to (euro)250 million;

                         o    Hoechst will bear those liabilities exceeding
                              (euro)250 million, however Celanese will reimburse
                              Hoechst for one-third of those liabilities for
                              amounts that exceed (euro)750 million in the
                              aggregate.

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

                         Based on Celanese's estimate of the probability of loss
                         under this indemnification, Celanese had reserves of
                         (euro)38 million as of September 30, 2004, for this
                         contingency. Where Celanese is unable reasonably to
                         determine the probability of loss or estimate such loss
                         under an indemnification, Celanese has not recognized
                         any related liabilities. (See Note 26)


                                      F-56



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

                    o    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 the nine months ended September 30, 2004 or
                         the years ended December 31, 2003 and 2002 in
                         connection with this indemnification.

     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 to the purchasers. Many of the obligations
     contain monetary and/or time limitations, ranging from one year to 30
     years, the aggregate amount of guarantees provided for under these
     agreements is approximately (euro)2.1 billion as of September 30, 2004.
     Other agreements do not provide for any monetary or time limitations.

          Based on Celanese's historical claims experience and its knowledge of
     the sites and businesses involved, the Company believes that it is
     adequately reserved for these matters. As of September 30, 2004, Celanese
     has reserves in the aggregate of (euro)42 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(R) 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
     (euro)75 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

o    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 October 1, 2004 to April 30, 2012 is estimated to be
     approximately (euro)46 million ($57 million).

o    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 (euro)7 million, which is
     unlimited in term.


                                      F-57



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     As indemnification obligations often depend on the occurrence of
unpredictable future events, the future costs associated with them cannot be
determined at this time. However, 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. As of September 30, 2004, there were outstanding commitments of
approximately (euro)700 million under take-or-pay contracts. Celanese does not
expect to incur any losses under these contractual arrangements. Additionally,
as of September 30, 2004, there were outstanding commitments relating to capital
projects of approximately (euro)23 million.

     Celanese Ltd. and/or CNA Holdings, Inc., both U.S. subsidiaries of
Celanese, are defendants in approximately 800 asbestos cases, the majority of
which are related to premises contaminated with asbestos and the alleged
resulting dangers. Because many of these cases involve numerous plaintiffs,
Celanese is subject to claims significantly in excess of the number of actual
cases. Celanese has reserves for defense costs related to claims arising from
these matters. Celanese believes it does not have any significant exposure in
these matters.

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

     Celanese is a defendant in nine consolidated actions brought by minority
shareholders during August 2004 in the Frankfurt District Court (Landgericht).
Among other things, these actions request the court to set aside shareholder
resolutions passed at the extraordinary general meeting held on July 30 and 31,
2004 based on allegations that include the alleged violation of procedural
requirements and information rights of the shareholders. Based on the
information as available, the outcome of the foregoing proceedings cannot be
predicted with certainty. The time period to bring forward challenges has
expired.

26.  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.

     For the nine months ended September 30, 2004 and the years ended December
31, 2003 and 2002, Celanese's worldwide expenditures, including expenditures for
legal compliance, internal environmental initiatives and remediation of active,
orphan, divested and U.S. Superfund sites were (euro)51 million, (euro)71
million and (euro)88 million. Capital project related environmental expenditures
in the nine months ended September 30, 2004 and the years ended December 31,
2003 and 2002, included in worldwide expenditures, were (euro)6 million, (euro)9
million and (euro)4 million, respectively. Environmental reserves for
remediation matters were (euro)119 million and (euro)126 million as of September
30, 2004 and December 31, 2003, respectively. (See Notes 15 and 17)

     Remediation - Due to its industrial history and through retained
contractual and legal 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.


                                      F-58



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     For the nine months ended September 30, 2004 and the years ended December
31, 2003 and 2002, the total remediation efforts charged to earnings before tax
were (euro)2 million, (euro)0 million and (euro)7 million, respectively. These
charges were offset by reversals of previously established environmental
reserves due to favorable trends in estimates at unrelated sites of (euro)0
million, (euro)5 million and (euro)15 million during the nine months ended
September 30, 2004 and the years of 2003 and 2002, respectively. 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 the nine months ended September 30, 2004 or the years ended December 31, 2003
or 2002. There are no receivables for recoveries as of September 30, 2004 and
December 31, 2003.

     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 InfraServ locations in
Germany: Oberhausen, Frankfurt am Main-Hoechst, and Kelsterbach, and holds
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 Infraserv 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 reserves of (euro)59
million and (euro)57 million as of September 30, 2004 and December 31, 2003,
respectively.

     If an InfraServ partner defaults on its 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. 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 as of September 30, 2004:

COMPANY                                    OWNERSHIP %   LIABILITY %
-------                                    -----------   -----------
InfraServ GmbH & Co. Gendorf KG ........       39.0%         10.0%
InfraServ GmbH & Co. Oberhausen KG .....       84.0%         75.0%
InfraServ GmbH & Co. Knapsack KG .......       27.0%         22.0%
InfraServ GmbH & Co. Kelsterbach KG ....      100.0%        100.0%
InfraServ GmbH & Co. Hoechst KG ........       31.2%         40.0%
InfraServ GmbH & Co. Wiesbaden KG ......       17.9%          0.0%
InfraServ Verwaltungs GmbH .............      100.0%          0.0%


                                      F-59



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     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. As of
September 30, 2004 and December 31, 2003, Celanese had provisions totaling
(euro)12 million and (euro)9 million, respectively, for U.S. Superfund sites and
utilized (euro)1 million of these reserves in the nine months ended September
30, 2004 and the year ended December 31, 2003. There were no significant
provisions recorded during the nine months ended September 30, 2004 or the years
ended December 31, 2003 or 2002.

     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 Hoechst demerger, Celanese
agreed to indemnify Hoechst for the first (euro)250 million of future
remediation liabilities for environmental damages arising from 19 specified
divested Hoechst entities. As of September 30, 2004 and December 31, 2003,
Celanese has reserves of (euro)38 million and (euro)42 million, respectively,
for these matters which are included as a component of the total environmental
reserves. Celanese has made total payments through the nine months ended
September 30, 2004 and the year ended December 31, 2003 of (euro)38 million and
(euro)36 million, respectively. If such future liabilities exceed (euro)250
million, Hoechst will bear such excess up to an additional (euro)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.

27.  SPECIAL CHARGES

     Special charges include provisions for restructuring and other expenses and
income incurred outside the normal course of ongoing operations. Restructuring
provisions represent costs of severance and other benefit programs related to
major activities undertaken to redesign business operations, 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.


                                      F-60



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The components of special charges for the nine months ended September 30,
2004 and for the years ended December 31, 2003 and 2002 were as follows:



                                   NINE MONTHS
                                      ENDED
                                   SEPTEMBER 30,   YEARS ENDED DECEMBER 31,
                                   -------------   ------------------------
                                        2004           2003         2002
                                        ----           ----         ----
                                             ( IN (EURO) MILLIONS)
                                   ----------------------------------------

Employee termination benefits...         15             16             9
Plant/office closures...........        100              6             6
Restructuring adjustments.......          1             (6)          (10)
                                         --            ---           ---
   Total Restructuring..........        116             16             5
Sorbates antitrust matters......         --             84            --
Plumbing actions................         (3)           (94)           --
Asset impairments...............          8             --            --
Third-party reimbursements of
   restructuring charges........         --             --            (1)
Other...........................         21             (1)           (9)
                                        ---            ---           ---
   Total Special Charges........        142              5            (5)
                                        ===            ===           ===


     The components of the September 30, 2004 and for the December 31, 2003
restructuring reserves were as follows:



                                                   EMPLYOEE
                                                 TERMINATION   PLANT/OFFICE
                                                   BENEFITS      CLOSURES     TOTAL
                                                 -----------   ------------   -----
                                                        (IN (EURO) MILLIONS)
                                                 ----------------------------------

Restructuring reserve at December 31, 2002....           37          27         64
   Restructuring additions....................           16           6         22
   Cash and noncash uses......................          (29)        (11)       (40)
   Other changes..............................           (1)         (5)        (6)
   Currency translation adjustments...........           (1)         --         (1)
                                                        ---         ---       ----
Restructuring reserve at December 31, 2003....           22          17         39
   Restructuring additions....................           15         101        116
   Cash and noncash uses......................          (12)       (104)      (116)
   Other changes..............................           (1)         --         (1)
                                                        ---        ----       ----
Restructuring reserve at September 30, 2004...           24          14         38
                                                        ===        ====       ====


     Included in the above restructuring reservesillion and (euro)39 million at
September 30, 2004 and December 31, 2003, respectively, are (euro)7 million and
(euro)7 million, respectively, of long-term reserves included in Other
liabilities.

2004

     For the nine months ended September 30, 2004, Celanese recorded expense of
(euro)142 million in special charges, which consisted of (euro)116 million of
restructuring charges and approximately (euro)26 million from other special
charges. The (euro)116 million of additions to the restructuring reserve
included primarily employee severance costs of (euro)15 million and plant and
office closure costs of (euro)100 million. Within other special charges there
was approximately (euro)20 million of expenses for advisory services related to
the acquisition of Celanese by BCP and (euro)8 million of asset impairment
charges related to a chemical unit in Canada, partially offset by (euro)3
million of income related to insurance recoveries associated with the plumbing
cases.


                                      F-61



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     In October 2004, the Company announced plans to consolidate its tow
production to fewer sites by 2007 and to discontinue the production of acetate
filament by mid-2005. In the third quarter of 2004, the Company recorded
restructuring charges of (euro)100 million related to asset impairment of the
Company's acetate business. The restructuring is being implemented to increase
efficiency, reduce overcapacity and to focus on products and markets that
provide long-term value. (See Note 17)

     During the nine months ended September 30, 2004, the Company continued with
its redesign initiatives. The Chemical Products segment recorded approximately
(euro)8 million of severance and organizational redesign costs, which included
approximately (euro)2 million related to the shutdown of an obsolete synthesis
gas unit in Germany. Ticona recorded approximately (euro)6 million similarly for
severance, relocation and employee related expenses, primarily associated with
management's initiative to relocate the segment's administrative and research
and development functions from Summit, New Jersey to Florence, Kentucky.

2003

     In 2003, Celanese recorded expense of (euro)5 million in special charges,
which consisted of (euro)22 million of restructuring charges, (euro)6 million of
income from favorable adjustments to restructuring reserves that were recorded
previously, and (euro)11 million of income from other special charges. The
(euro)22 million of additions to the restructuring reserve included employee
severance costs of (euro)16 million and plant and office closure costs of
(euro)6 million. Within other special charges there was income of (euro)94
million related to insurance recoveries associated with the plumbing cases,
partially offset by (euro)84 million of expenses for antitrust matters in the
sorbates industry, primarily related to a decision by the European Commission.

     In 2003, the Chemical Products segment recorded employee severance charges
of (euro)4 million, which primarily related to the shutdown of an obsolete
synthesis gas unit in Germany.

     In 2003, Ticona commenced the redesign of its operations. These plans
included a decision to sell the Summit, New Jersey site and to relocate
administrative and research and development activities to the existing Ticona
site in Florence, Kentucky in 2004. As a result of this decision, Celanese
recorded termination benefit expense of (euro)4 million in 2003. In addition to
the relocation in the United States, Ticona has streamlined its operations in
Germany, primarily through offering employees early retirement benefits under an
existing employee benefit arrangement. As a result of this arrangement, Ticona
recorded a charge of (euro)6 million in 2003.

     Also in 2003, based on a 2002 restructuring initiative to concentrate its
European manufacturing operations in Germany, Ticona ceased its manufacturing
operations in Telford, United Kingdom. This resulted in contract termination
costs and asset impairments totaling (euro)6 million and employee severance
costs of (euro)1 million in 2003. Through December 31, 2003, the total costs of
the Telford shutdown through 2003 were (euro)11 million.

     The (euro)6 million of income from favorable adjustments of previously
recorded restructuring reserves consisted of a (euro)1 million adjustment to the
2002 reserves, a (euro)4 million adjustment to the 2001 reserves and a (euro)1
million adjustment to the 1999 reserves. The adjustment to the 2002 reserve
related to lower than expected costs related to the demolition of the GUR
Bayport facility. The adjustment to the 2001 reserve was primarily due to the
lower than expected decommissioning costs of the Mexican production facility.
The adjustment to the 1999 reserve was due to lower than expected payments
related to the closure of a former administrative facility in the United States.

2002

     In 2002, Celanese recorded income from special charges of (euro)5 million,
which consisted of (euro)15 million of restructuring charges, (euro)10 million
of income from favorable adjustments to previously recorded restructuring
reserves, (euro)1 million of income from reimbursements from third party site
partners related to prior year initiatives, and (euro)9 million of income from
other special charges. The (euro)15 million of restructuring charges included
employee severance costs of (euro)9 million and plant and office closure costs
of (euro)6 million.

     Project Focus, initiated in early 2001, set goals to reduce trade working
capital, limit capital expenditures and improve earnings before interest, taxes,
depreciation and amortization from programs to increase efficiency. Project
Forward was announced in August 2001 and initiated additional restructuring and
other measures to reduce costs and increase profitability. During 2002, Celanese
recorded employee severance charges of (euro)9 million, of which (euro)4 million
related to adjustments to the 2001 forward initiatives and (euro)4 million for
streamlining efforts of production


                                      F-62



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

facilities in Germany and the United States, and (euro)1 million for employee
severance costs in the polyvinyl alcohol business.

     Ticona recorded asset impairments of (euro)4 million in 2002 related to a
decision in 2002 to shutdown operations in Telford, United Kingdom in 2003. In
addition, with the construction of a new and expanded GUR(R) plant in Bishop,
Texas, the GUR operations in Bayport, Texas were transferred to a new facility.
Decommissioning and demolition costs associated with the Bayport closure were
(euro)2 million.

     The (euro)10 million of favorable adjustments of previously recorded
restructuring reserves consisted of an (euro)8 million adjustment to the 2001
reserves and a (euro)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 Chemical Products production facility in Knapsack,
Germany. The other special charges income of (euro)9 million related to a
reduction in reserves associated with settlements of environmental
indemnification obligations associated with former Hoechst entities.

28.  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-63



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

    Summarized financial data, excluding intercompany activity, appear below.

                                                        AS OF           AS OF
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         2004           2003
                                                    -------------   ------------
                                                       (IN (EURO) MILLIONS)
                                                    ----------------------------
Assets
Reinsurance and losses receivable ...............        144             162
Prepaid insurance premiums ......................         26              22
Other current assets ............................          9               9
                                                         ---             ---
   Total current assets .........................        179             193
Marketable securities ...........................        179             161
Other long-term assets ..........................          1               1
                                                         ---             ---
   Total assets .................................        359             355
                                                         ===             ===
Liabilities

Insurance reserves and payables for third
   party and internal matters ...................        102             115
Other current liabilities .......................          6               8
                                                         ---             ---
   Total current liabilities ....................        108             123
Insurance loss reserves .........................        109             136
                                                         ---             ---
   Total liabilities ............................        217             259
                                                         ---             ---
Equity ..........................................        142              96
                                                         ---             ---
Total liabilities and equity ....................        359             355
                                                         ===             ===

                                                         NINE
                                                     MONTHS ENDED    YEARS ENDED
                                                    SEPTEMBER 30,   DECEMBER 31,
                                                         2004        2003   2002
                                                    -------------    ----   ----
                                                        (IN (EURO) MILLIONS)
                                                    ----------------------------
Third party premiums ............................         21          22     30
Losses ..........................................        (17)        (22)   (42)
Interest income .................................          4           8      7
Dividend income .................................         21          44     24
Other income / (expense) ........................         (2)          5     (7)
Income tax expense ..............................         (5)        (11)    (7)
                                                         ---         ---    ---
Net income ......................................         22          46      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.

     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 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 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. It is possible that actual
results could differ significantly from the recorded liabilities.


                                      F-64



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     The Captives use reinsurance arrangements to reduce their risk of loss.
Reinsurance arrangements, however, do not relieve the Captives from their
obligations to policyholders. 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 revenue based on the terms of the
policies. Capitalization of the Captives is determined by regulatory guidelines.

29. BUSINESS AND GEOGRAPHICAL SEGMENTS

     Information with respect to Celanese's industry segments follows:

Business Segments

     CHEMICAL PRODUCTS primarily produces and supplies acetyl products,
including acetic acid, vinyl acetate monomer and polyvinyl alcohol; specialty
and oxo products, including 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 PRODUCTS consists 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 3. Celanese evaluates performance based on operating
profit, net earnings, cash flows and other measures of financial performance
reported in accordance with U.S. GAAP.

     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-65



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



                                                 CHEMICAL    ACETATE            PERFORMANCE     TOTAL    RECONCIL-   CONSOL-
                                                 PRODUCTS   PRODUCTS   TICONA     PRODUCTS    SEGMENTS     IATION    IDATED
                                                 --------   --------   ------   -----------   --------   ---------   -------
                                                                             (IN (EURO) MILLIONS)
                                                 ---------------------------------------------------------------------------

September 30, 2004
Sales to external customers ..................     1,942      425        539         111       3,017          34      3,051
Inter-segment revenues .......................        72       --         --          --          72         (72)        --
Operating profit (loss) ......................       140      (79)        59          33         153        (107)        46
Operating margin (1) .........................       7.0%   -18.6%      10.9%       29.7%        5.0%       n.m.        1.5%
Earnings (loss) from continuing operations
   before tax and minority interests .........       154      (75)        94          32         205        (102)       103
Earnings (loss) from continuing operations
   before tax and minority interests as
   a percentage of net sales .................       7.6%   -17.6%      17.4%       28.8%        6.6%       n.m.        3.4%
Depreciation and amortization ................        97       36         40           4         177           5        182
Capital expenditures .........................        43       27         50           1         121           2        123
Special charges ..............................       (16)    (100)        (3)         --        (119)        (23)      (142)
Intangible assets, net .......................       482      130        276          --         888          --        888
Trade working capital ........................       405      114        130          21         670         (14)       656
Total assets .................................     2,160      486      1,218          75       3,939       1,401      5,340
DECEMBER 31, 2003:
Sales to external customers ..................     2,628      578        675         150       4,031          44      4,075
Inter-segment revenues .......................        85       --         --          --          85         (85)        --
Operating profit (loss) ......................       123       11        109         (39)        204         (97)       107
Operating margin (1) .........................       4.5%     1.9%      16.1%      -26.0%        5.0%       n.m.        2.6%
Earnings (loss) from continuing operations
   before tax and minority interests .........       155       14        149         (39)        279        (102)       177
Earnings (loss) from continuing operations
   before tax and minority interests as
   a percentage of net sales .................       5.7%     2.4%      22.1%      -26.0%        6.8%       n.m.        4.3%
Depreciation and amortization ................       139       59         50           6         254           6        260
Capital expenditures .........................        96       34         49           2         181           4        185
Special charges ..............................         1       --         77         (84)         (6)          1         (5)
Intangible assets, net .......................       478      127        272          --         877          --        877
Trade working capital ........................       292      117         92          20         521         (14)       507
Total assets .................................     2,189      565      1,165         136       4,055       1,340      5,395
DECEMBER 31, 2002:
Sales to external customers ..................     2,482      670        696         161       4,009          55      4,064
Inter-segment revenues .......................        79       --         --          --          79         (79)        --
Operating profit (loss) ......................       159       32         26          48         265         (82)       183
Operating margin (1) .........................       6.2%     4.8%       3.7%       29.8%        6.5%       n.m.        4.5%
Earnings (loss) from continuing operations
   before tax and minority interests .........       179       45         37          48         309        (119)       190
Earnings (loss) from continuing operations
   before tax and minority interests as
   a percentage of net sales .................       7.0%     6.7%       5.3%       29.8%        7.6%       n.m.        4.7%
Depreciation and amortization ................       139       57         55           6         257           5        262
Capital expenditures .........................       106       31         66           4         207           7        214
Special charges ..............................         1       --         (5)         --          (4)          9          5
Intangible assets, net .......................       561      146        327          --       1,034          --      1,034
Trade working capital ........................       376       87         99          19         581         (11)       570
Total assets .................................     2,567      644      1,293          84       4,588       1,534      6,122



                                      F-66



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

     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, (d) corporate center costs for support services such as
legal, accounting and treasury functions and (e) interest income or expense
associated with financing activities of the Company.

     Additionally, Celanese recognized special charges in the nine months ended
September 30, 2004 and the years ended December 31, 2003 and 2002 primarily
related to restructuring costs and environmental and other costs associated with
previously divested entities of Hoechst, and demerger costs. (See Note 27)

     Other operating entities consist of primarily ancillary businesses as well
as companies which provide infrastructure services.

     The following table presents financial information based on the geographic
location of Celanese's facilities:



                            NORTH    THEREOF   THEREOF   THEREOF            THEREOF           THEREOF    REST OF
                           AMERICA     USA      CANADA    MEXICO   EUROPE   GERMANY   ASIA   SINGAPORE    WORLD    CONSOLIDATED
                           -------   -------   -------   -------   ------   -------   ----   ---------   -------   ------------
                                                                    (IN (EURO) MILLIONS)
                           ----------------------------------------------------------------------------------------------------

   September 30, 2004:
Total assets ...........    3,259     2,551      223       485      1,487    1,345     363      214        231         5,340
Property, plant and
   equipment, net ......      625       563        4        58        449      402     125      115          3         1,202
Operating profit (loss)       (69)      (23)     (37)       (9)        37       12      75       71          3            46
Net sales ..............    1,425     1,079      158       188      1,239    1,012     350      313         37         3,051
Depreciation and
   amortization ........      105        79       16        10         61       55      16       16         --           182
Capital expenditures ...       79        74        2         3         37       32       7        2         --           123

   DECEMBER 31, 2003:
Total assets ...........    3,310     2,579      247       484      1,481    1,327     361      220        243         5,395
Property, plant and
   equipment, net ......      750       618       45        87        468      421     133      128          3         1,354
Operating profit (loss)        49        67      (14)       (4)         6      (33)     50       46          2           107
Net sales ..............    1,906     1,464      209       233      1,676    1,337     451      405         42         4,075
Depreciation and
   amortization ........      161       131       13        17         75       67      24       24         --           260
Capital expenditures ...       95        78        7        10         86       79       4        2         --           185



                                      F-67



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

30.  SUBSEQUENT EVENTS

In October 2004, the parent of BCP completed an organizational restructuring
("Recent Restructuring"). As part of the Recent Restructuring, the parent of
BCP, by causing BCP to give corresponding instruction under the Domination
Agreement, effected the transfer of all of the shares of CAC from Celanese
Holding GmbH, a wholly owned subsidiary of Celanese AG, to BCP Caylux which
resulted in BCP Caylux owning 100% of the equity of CAC and, indirectly, all of
its assets, including subsidiary stock. The transfer was effected under the
Domination Agreement as follows: (1) Celanese Holding GmbH distributed all
outstanding shares in CAC to Celanese AG, (2) Celanese AG sold all outstanding
shares in CAC to BCP for an unsecured note in an amount equal to CAC's fair
market value of (euro)291 million and (3) BCP transferred all outstanding
capital stock of CAC to BCP Caylux for (euro)291 million in partial satisfaction
of a loan owing to BCP Caylux. In addition, CPO, a wholly owned subsidiary of
Celanese AG, which acted as a purchasing agent on behalf of Celanese as well as
third parties, was transferred to BCP. This transfer was made equal to CPO's
fair market value of (euro)13 million. As a result of these transfers, Celanese
AG now serves primarily as the holding company for the European business and
certain Asian businesses of Celanese Corporation, the ultimate parent of BCP and
Celanese AG. Management is in the process of determining the potential impact of
the transfers on the Company's financial statements.

     As a result of the Recent Restructuring, CAC is no longer a wholly owned
subsidiary of Celanese AG; therefore, the term notes, pollution control bonds,
variable rate term loan payable to BCP Caylux and a portion of the capital
leases are no longer obligations of Celanese AG. Celanese AG and its
subsidiaries are no longer named parties under the credit facilities after the
Recent Restructuring. As of September 30, 2004, Celanese AG had net intercompany
notes with consolidated subsidiaries, which were eliminated in consolidation. As
part of the Recent Restructuring, these intercompany notes were replaced with
unsecured notes with non-consolidated affiliates for approximately (euro)1
billion. These unsecured notes bear interest of 4.67% per annum and mature in
2009.

     CAC had a trade receivable securitization program, which allowed
participating operating subsidiaries to sell up to $120 million ((euro)97
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 AG maintains an investment grade debt rating.
As of September 30, 2004, Celanese AG was in the process of renegotiating the
trade receivable securitization program and therefore there were no outstanding
sales of receivables under this program for the nine months ended September 30,
2004. Due to the Recent Restructuring, this program is no longer available to
Celanese AG.

     Celanese had outstanding letters of credit amounting to (euro)143 million
at September 30, 2004, which will be reduced to (euro)25 million after the
Recent Restructuring. Celanese also had operating lease commitments of (euro)166
million at September 30, 2004, which will be reduced to (euro)111 million after
the Recent Restructuring. Additionally, Celanese had (euro)700 million under
take-or-pay contracts at September 30, 2004, which will be reduced to (euro)574
million after the Recent Restructuring.

     As this is a transaction between entities under common control, the
transfer of CAC and CPO will be recorded as a deemed dividend to BCP at the
historical cost net book value of CAC and CPO which will, upon finalization of
the adjustments associated with the transfer, be reflected as a net reduction in
shareholders' equity. Management is in the process of determining the potential
impact of the transfers on the Company's financial statements. The transfer of
CPO is not expected to have a material effect on the Company's financial
position or results of operations and cash flows. Selected financial information
for CAC is as follows:


                                      F-68



                          CELANESE AG AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

                                                              NINE MONTHS ENDED
                                                                SEPTEMBER 30,
                                                                    2004
                                                            (IN (EURO) MILLIONS)
                                                            --------------------
                                                                     CAC
                                                            --------------------
                                                                 (UNAUDITED)
                                                            --------------------
Third party net sales ...................................          1,573
Intercompany net sales ..................................            271
Operating loss...........................................            (59)
Special charges..........................................           (116)

     In December 2004, Celanese approved a plan to dispose of the cyclo-olefin
copolymer ("COC") business included within the Technical Polymers Ticona segment
and its interest in Pemeas GmbH, the fuel cell joint venture included in the
other activities segment. As a result of this decision, Celanese recorded an
impairment loss of (euro)25 million related to the COC business during the three
months ended December 31, 2004. The operating loss for COC was (euro)31 million
for the year ended December 31, 2003 and (euro)22 million for the nine months
ended September 30, 2004. The operating loss for the fuel cell business was
(euro)10 million for the year ended December 31, 2003 and (euro)6 million for
the nine months ended September 30, 2004. The Company also expects that in the
three months ended December 31, 2004 equity in net earnings of affiliates will
include a (euro)9 million charge, representing Celanese AG's portion of
restructuring charges recorded by our European oxo chemicals joint venture. In
March 2005, the Company received (euro)56 million for an early contractual
settlement of receivables related to the 2000 sale of its 50% interest in the
Vinnolit Kunstoff GmbH venture. The majority of the cash to be received is
expected to be recognized as a gain in the three months ended March 31, 2005.

     Subsequent to September 30, 2004, Celanese Corporation, the Company's
ultimate parent completed an initial public offering of its Series A common
stock. The offering of Series A common stock was made concurrently with the
offering of shares of Celanese Corporation's preferred stock. In contemplation
of this initial public offering, in December 2004, Celanese Corporation approved
a stock incentive plan for executive officers, key employees and directors, a
deferred compensation plan for executive officers and key employees as well as
other management incentive programs. The Company anticipates recording expense
of (euro)10 million related to the new compensation plans during the three
months ended December 31, 2004.


                                      F-69



                          CELANESE AG AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

  FOR THE PERIOD ENDED SEPTEMBER 30, 2004 AND THE YEAR ENDED DECEMBER 31, 2003
                              (IN (EURO) MILLIONS)



                                                                  ADDITIONS
                                                          -------------------------
                                             BALANCE AT    CHARGED TO    CHARGED TO                    BALANCE AT
                                              BEGINNING       COSTS         OTHER                          END
                                              OF PERIOD   AND EXPENSES    ACCOUNTS    DEDUCTIONS (a)    OF PERIOD
                                             ----------   ------------   ----------   --------------   ----------

YEAR ENDED DECEMBER 31, 2003
   Deducted from asset accounts:
      Allowance for Doubtful Accounts ....        21             4           --            (7)(b)           18
      Valuation allowance for deferred tax
         assets ..........................       166            --           --            39              127

PERIOD ENDED SEPTEMBER 30, 2004
   Deducted from asset accounts:
      Allowance for Doubtful Accounts ....        18             3           --            (3)(b)           18
      Valuation allowance for deferred tax
         assets ..........................       127           170           --           (41)(b)          256


(a)  Includes foreign currency translation effects

(b)  Uncollected accounts written off, net of recoveries


                                      F-70`