1297288--2/23/2007--Celanese_Holdings

related topics

{debt, indebtedness, cash}

{cost, regulation, environmental}

{investment, property, distribution}

{tax, income, asset}

{cost, contract, operation}

{operation, international, foreign}

{property, intellectual, protect}

{cost, operation, labor}

We are subject to risks associated with the increased volatility in the prices and availability of key raw materials and energy. Failure to develop new products and production technologies or to implement productivity and cost reduction initiatives successfully may harm our competitive position. Environmental regulations and other obligations relating to environmental matters could subject us to liability for fines, clean-ups and other damages, require us to incur significant costs to modify our operations and increase our manufacturing and delivery costs. Changes in environmental, health and safety regulatory requirements could lead to a decrease in demand for our products. Our production facilities handle the processing of some volatile and hazardous materials that subject us to operating risks that could have a negative effect on our operating results. Recently proposed federal legislation aimed at increasing security at certain chemical production plants and similar legislation that may be proposed in the future could, if passed into law, require us to relocate certain manufacturing activities and require us to alter or discontinue our production of certain chemical products, thereby increasing our operating costs and causing an adverse effect on our results of operations. Our significant non-U.S. operations expose us to global exchange rate fluctuations that could adversely impact our profitability. Significant changes in pension fund investment performance or assumptions relating to pension costs may have a material effect on the valuation of pension obligations, the funded status of pension plans, and our pension cost. CAG may be required to make payments to Hoechst. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly and affect our operating results. The disposition by the Original Shareholders of at least 90% of their equity interest in Celanese Corporation will satisfy a vesting condition under our deferred compensation plan. Our future success will depend in part on our ability to protect our intellectual property rights. Our inability to enforce these rights could reduce our ability to maintain our market position and our profit margins. Risks Related to the Acquisition of CAG The amounts of the fair cash compensation and of the guaranteed annual payment offered under the domination and profit and loss transfer agreement ( Domination Agreement ) may be increased, which may further reduce the funds the Purchaser can otherwise make available to us. The Purchaser may be required to compensate CAG for annual losses, which may reduce the funds the Purchaser can otherwise make available to us. We and two of our subsidiaries have taken on certain obligations with respect to the Purchaser s obligation under the Domination Agreement and intercompany indebtedness to CAG, which may diminish our ability to make payments on our indebtedness. The price paid by the Purchaser for the acquisition of the remaining outstanding CAG shares may be challenged in court. Risks Related to Our Indebtedness Our high level of indebtedness could diminish our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or the chemicals industry and prevent us from meeting obligations under our indebtedness. Despite our current high leverage, we and our subsidiaries may be able to incur substantially more debt. This could further exacerbate the risks of our high leverage. We may not be able to generate sufficient cash to service our indebtedness, and may be forced to take other actions to satisfy obligations under our indebtedness, which may not be successful.

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1297288--2/23/2007--Celanese_Holdings_LLC