LYB LyondellBasell Industries NV

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 25, 2014

 

 

LYONDELLBASELL INDUSTRIES N.V.

(Exact Name of Registrant as Specified in Charter)

 

 

 

The Netherlands		001-34726		98-0646235
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1221 McKinney St. Suite 300 Houston, Texas USA 77010		4th Floor, One Vine Street London W1J0AH The United Kingdom		Stationsplein 45 3013 AK Rotterdam The Netherlands

(Addresses of principal executive offices)

 

(713) 309-7200		+44 (0)207 220 2600		+31 (0)10 275 5500

(Registrant’s telephone numbers, including area codes)

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02. Results of Operations and Financial Condition.

LyondellBasell Industries N.V. (the “Company”) has issued a press release this morning, July 25, 2014, announcing its earnings for the quarter ended June 30, 2014, a copy of which is furnished herewith as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure.

The Company is holding a conference call to discuss its second quarter 2014 results on July 25, 2014. Information about the call can be found in the press release furnished herewith as Exhibit 99.1.

A copy of the slide materials to be discussed on the conference call, which will be available at the time of the teleconference and afterwards, are furnished herewith as Exhibit 99.2. The slides can be accessed on the Company’s website at www.lyondellbasell.com.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated July 25, 2014

99.2 Presentation – LyondellBasell Industries N.V. Second Quarter 2014 Earnings

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

				LYONDELLBASELL INDUSTRIES N.V.
Date: July 25, 2014				By:		/s/ Craig B. Glidden
						Craig B. Glidden
						Executive Vice President

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Exhibit Index

 

Exhibit		Description
99.1		Press Release dated July 25, 2014
99.2		Presentation – LyondellBasell Industries N.V. Second Quarter 2014 Earnings

Exhibit 99.1

 

NEWS RELEASE   HOUSTON and LONDON, July 25, 2014

LyondellBasell Reports Second-Quarter 2014 Results

Second-Quarter 2014 Highlights

 

•

Record quarterly EBITDA of $1.94 billion

 

•

Record diluted earnings per share of $2.22; income from continuing operations of $1.17 billion

 

•

Solid results in all segments, with O&P Americas segment approaching EBITDA of $1 billion

 

•

Completed initial 10% share repurchase and initiated purchases under second 10% authorization; repurchased approximately 19 million shares during the quarter

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the second quarter 2014 of $2.22 diluted earnings per share, or $1.17 billion. Second quarter 2014 EBITDA was $1.94 billion. The increase from the first quarter 2014 was primarily due to Olefins and Polyolefins – Americas segment results.

Comparisons with the prior quarter and second quarter 2013 are shown below:

Table 1 - Earnings Summary

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
Millions of U.S. dollars (except share data)		2014				2014				2013				2014				2013
Sales and other operating revenues		$	12,117			$	11,135			$	11,103			$	23,252			$	21,772
Net income(a)			1,176				944				927				2,120				1,827
Income from continuing operations(b)			1,173				943				923				2,116				1,829
Diluted earnings per share (U.S. dollars):
Net income(c)			2.23				1.72				1.61				3.94				3.16
Income from continuing operations(b)			2.22				1.72				1.60				3.93				3.16
Diluted share count (millions)			527				548				578				537				578
EBITDA(d)			1,941				1,668				1,652				3,609				3,237

 

(a)	Includes net loss attributable to non-controlling interests and income (loss) from discontinued operations, net of tax. See Table 10.

(b)	Please see Table 11 for charges and benefits to income from continuing operations.

(c)	Includes diluted earnings per share attributable to discontinued operations.

(d)	See the end of this release for an explanation of the Company’s use of EBITDA and Table 8 for reconciliations of EBITDA to income from continuing operations.

 

LyondellBasell Industries		1
www.lyondellbasell.com

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“We had record earnings this quarter of $2.22 per share, while our EBITDA approached $2 billion. Importantly, every segment contributed to this achievement. Of particular note was the strength in our Olefins and Polyolefins- Americas segment which generated nearly $1 billion of EBITDA even while we were performing significant scheduled maintenance at our La Porte ethylene site. In addition to the strong quarterly earnings, we repurchased approximately 19 million of our shares during the second quarter, completing the initial 10 percent share repurchase authorization. We also initiated repurchases under the second 10 percent authorization,” said Jim Gallogly, LyondellBasell Chief Executive Officer.

“As encouraging as these results are, we did not fully deliver on our reliability expectations, and the quarterly earnings could have been better. Specifically, we were late in completing our La Porte ethylene turnaround in part due to a mechanical issue with a compressor. Both supplier upsets and mechanical issues impacted our Intermediates and Derivatives business as well. Despite these temporary setbacks, our commitment to Operational Excellence continues to be the foundation of our success,” Gallogly said.

“Industry fundamentals remain strong, and we continue to execute on our investment program. During the third quarter we expect to begin production from the 800 million pound per year La Porte ethylene expansion. This is the first of three ethylene expansions and continues to put us well ahead of new greenfield plants pursued by others in the industry,” Gallogly added.

OUTLOOK

“During the first weeks of the third quarter, industry conditions have been similar to the second quarter environment. U.S. oil, natural gas, and natural gas liquids production remain strong. Together these support margins in our Olefins and Polyolefins – Americas, Intermediates and Derivatives, and Refining segments. However, our results in the next quarter will be negatively impacted by the delayed start-up of our La Porte ethylene plant,” Gallogly noted.

LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT

LyondellBasell manages operations through five operating segments: 1) Olefins and Polyolefins – Americas; 2) Olefins and Polyolefins – Europe, Asia and International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

 

LyondellBasell Industries		2
www.lyondellbasell.com

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Olefins and Polyolefins - Americas (O&P-Americas) – The primary products of this segment include ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins.

Table 2 - O&P–Americas Financial Overview

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	898			$	656			$	872			$	1,554			$	1,693
EBITDA			978				736				951				1,714				1,849

Three months ended June 30, 2014 versus three months ended March 31, 2014 – The segment achieved record EBITDA results in the second quarter of 2014. EBITDA increased $242 million versus the first quarter 2014. Compared to the prior period, olefins results increased approximately $220 million. The first quarter was negatively impacted by ethylene purchases and inventory build in preparation for the second quarter La Porte plant turnaround. The second quarter was also negatively impacted, but to a lesser extent, by the delayed restart of the La Porte olefin plant and the subsequent purchase of ethylene. This impacted results by approximately $50 million. Olefins benefited in the second quarter from lower NGL costs and improved co-product values. Combined polyolefin results increased by approximately $20 million from the first quarter 2014 driven by higher polyethylene margins. The ethylene to polyethylene price spread increased 2 cents per pound. Joint venture equity income increased by $2 million.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $27 million versus the second quarter 2013. Olefins results declined approximately $130 million compared to the prior year period. Olefins sales and production volumes declined. However, margins benefited from lower NGL costs and higher co-product values. The price of ethylene decreased by approximately 2 cents per pound compared to the prior year period. Polyethylene results increased by approximately $150 million as the ethylene to polyethylene price spread improved by 10 cents per pound and sales volumes increased approximately 4 percent versus the prior year period. Polypropylene results increased by approximately $15 million due to slightly higher margins. Joint venture equity income decreased by $2 million.

 

LyondellBasell Industries		3
www.lyondellbasell.com

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Olefins and Polyolefins - Europe, Asia, International (O&P-EAI) – The primary products of this segment include ethylene and its co-products (propylene and butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and polybutene-1 resins.

Table 3 - O&P–EAI Financial Overview

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	190			$	225			$	189			$	415			$	282
EBITDA			319				356				295				675				520

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA decreased $37 million versus the first quarter 2014. Excluding the benefits of a $52 million environmental settlement in the first quarter, EBITDA increased by $15 million. Olefins results increased modestly. Naphtha cost increases and a decline in the price of ethylene of approximately 2 cents per pound were more than offset by increased co-product prices and from cracking more advantaged feedstocks. Approximately 55 percent of our ethylene production was sourced from advantaged raw materials. Combined polyolefin results increased from higher volumes. Combined polypropylene compounds and polybutene-1 results were unchanged. Equity income from joint ventures increased by $9 million from the first quarter 2014.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $24 million versus the second quarter 2013. Olefins results declined by approximately $20 million as a result of margins that were lower by approximately 3 cents per pound. This was partially mitigated by higher operating rates and from higher butadiene volumes following a 2013 expansion project. Combined polyolefin results increased primarily as a result of higher polyethylene and polypropylene margins of approximately 1 cent per pound. Polypropylene compounds and polybutene-1 results decreased by approximately $10 million from the prior year period as a result of lower polypropylene compound margins. Equity income from joint ventures increased $32 million from the second quarter 2013.

 

LyondellBasell Industries		4
www.lyondellbasell.com

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Intermediates and Derivatives (I&D) – The primary products of this segment include propylene oxide (PO) and its co-products (styrene monomer, tertiary butyl alcohol (TBA), isobutylene and tertiary butyl hydroperoxide), and derivatives (propylene glycol, propylene glycol ethers and butanediol), acetyls (acetic acid, vinyl acetate monomer and methanol), ethylene oxide and its derivatives, and oxyfuels.

Table 4 - I&D Financial Overview

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	375			$	316			$	285			$	691			$	608
EBITDA			430				375				338				805				711

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA increased $55 million versus the first quarter 2014. Results for PO and PO derivatives decreased by approximately $20 million. Seasonally lower sales of propylene glycol sold into aircraft deicing were offset by higher sales of propylene oxide. Solvent margins declined. Intermediate chemicals results increased by approximately $10 million as styrene and ethylene glycol volumes improved. Additionally, acetic acid, vinyl acetate, and styrene margins improved but lower margins from methanol and ethylene glycol pricing partially offset the benefit. Oxyfuels results improved by approximately $70 million due to seasonal increases in both volume and margin. Equity income from joint ventures decreased by $4 million.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $92 million compared to the second quarter 2013. Results for PO and PO derivatives increased by approximately $25 million primarily due to higher volumes. Intermediate chemicals results were higher by approximately $60 million due to higher methanol and styrene volumes, and higher methanol and vinyl acetate margins. Oxyfuels results increased by approximately $10 million. Equity income from joint ventures decreased by $5 million from the second quarter in 2013.

 

LyondellBasell Industries		5
www.lyondellbasell.com

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Refining – The primary products of this segment include gasoline, diesel fuel, heating oil, jet fuel, and petrochemical raw materials.

Table 5 - Refining Financial Overview

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income (loss)		$	95			$	86			($	16	)		$	181			($	33	)
EBITDA			137				129				20				266				40

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA increased $8 million versus the first quarter 2014. The refinery processed 257,000 barrels per day, up 10,000 barrels per day from the prior quarter. Compared to the prior quarter, the Maya 2-1-1 benchmark crack spread declined by $1.25 per barrel, averaging $27.01 per barrel. The corresponding Houston refinery spread was relatively unchanged. The cost of Renewable Identification Numbers (RINs) to meet U.S. renewable fuel standards was relatively unchanged versus the first quarter 2014.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased $117 million versus the second quarter 2013. The refinery processed 257,000 barrels per day, down 8,000 barrels per day from the prior year period. Compared to the second quarter 2013, the Maya 2-1-1 benchmark spread increased $5.43 per barrel, and we benefited from improved yields and higher margins on secondary products. The cost of RINs decreased by approximately $20 million compared to the same quarter last year.

 

LyondellBasell Industries		6
www.lyondellbasell.com

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Technology – The principal products of the Technology segment include polyolefin catalysts and production process technology licenses and related services.

Table 6 - Technology Financial Overview

 

		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	56			$	60			$	39			$	116			$	89
EBITDA			71				76				59				147				125

Three months ended June 30, 2014 versus three months ended March 31, 2014 – EBITDA decreased by $5 million.

Three months ended June 30, 2014 versus three months ended June 30, 2013 – EBITDA increased by $12 million from higher catalyst and licensing results.

Capital spending and cash balances

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $415 million in the second quarter 2014. Our cash and short-term securities balance was $3.5 billion at June 30, 2014. We repurchased approximately 19 million of our outstanding ordinary shares and paid $370 million in dividends during the second quarter of 2014. There were 515 million common shares outstanding as of June 30^th.

CONFERENCE CALL

LyondellBasell will host a conference call July 25 at 11 a.m. ET. Participants on the call will include Chief Executive Officer Jim Gallogly, Executive Vice President and Chief Financial Officer Karyn Ovelmen, Senior Vice President - Strategic Planning and Transactions Sergey Vasnetsov, and Vice President of Investor Relations Doug Pike.

The toll-free dial-in number in the U.S. is 888-677-1826. For international numbers, go to www.lyondellbasell.com/teleconference, for a complete listing of toll-free numbers by country. The pass code for all numbers is 1231245.

A replay of the call will be available from 2 p.m. ET July 25 until Aug. 25 at 11 p.m. ET. The replay dial-in numbers are 800-839-1171 (U.S.) and +1 203-369-3030 (international). The pass code for each is 3675.

The slides that accompany the call will be available at http://www.lyondellbasell.com/earnings.

 

LyondellBasell Industries		7
www.lyondellbasell.com

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ABOUT LYONDELLBASELL

LyondellBasell (NYSE: LYB) is one of the world’s largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell (www.lyondellbasell.com) manufactures products at 55 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.

FORWARD-LOOKING STATEMENTS

The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures’ products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the “Risk Factors” section of our Form 10-K for the year ended December 31, 2013, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission’s website at www.sec.gov.

NON-GAAP MEASURES

This release makes reference to certain “non-GAAP” financial measures, such as EBITDA, as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA, provide useful supplemental information to investors regarding the

 

LyondellBasell Industries		8
www.lyondellbasell.com

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underlying business trends and performance of the company’s ongoing operations and are useful for period-over-period comparisons of such operations. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternative to operating cash flows as a measure of our liquidity.

Quantitative reconciliations of EBITDA to net income, the most comparable GAAP measure, are provided in Table 8 at the end of this release.

OTHER FINANCIAL MEASURE PRESENTATION NOTES

This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.

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Source: LyondellBasell Industries

 

Media Contact:		Stanley Sehested +1 713-309-4125
Investor Contact:		Douglas J. Pike +1 713-309-7141

 

LyondellBasell Industries		9
www.lyondellbasell.com

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Table 7 - Reconciliation of Segment Information to Consolidated Financial Information

 

		2013																				2014
(Millions of U.S. dollars)		Q1				Q2				Q3				Q4				Total				Q1				Q2				YTD
Sales and other operating revenues:
Olefins & Polyolefins - Americas		$	3,244			$	3,251			$	3,315			$	3,279			$	13,089			$	3,357			$	3,462			$	6,819
Olefins & Polyolefins - Europe, Asia, International			3,800				3,708				3,594				3,583				14,685				3,778				4,069				7,847
Intermediates & Derivatives			2,282				2,217				2,452				2,521				9,472				2,429				2,706				5,135
Refining			2,468				3,077				3,177				2,976				11,698				2,756				3,250				6,006
Technology			134				132				124				142				532				136				144				280
Other			(1,259	)			(1,282	)			(1,510	)			(1,363	)			(5,414	)			(1,321	)			(1,514	)			(2,835	)
Continuing Operations		$	10,669			$	11,103			$	11,152			$	11,138			$	44,062			$	11,135			$	12,117			$	23,252
Operating income (loss):
Olefins & Polyolefins - Americas		$	821			$	872			$	759			$	801			$	3,253			$	656			$	898			$	1,554
Olefins & Polyolefins - Europe, Asia, International			93				189				78				17				377				225				190				415
Intermediates & Derivatives			323				285				371				321				1,300				316				375				691
Refining			(17	)			(16	)			(37	)			92				22				86				95				181
Technology			50				39				35				33				157				60				56				116
Other			(3	)			(5	)			1				—				(7	)			(3	)			(1	)			(4	)
Continuing Operations		$	1,267			$	1,364			$	1,207			$	1,264			$	5,102			$	1,340			$	1,613			$	2,953
Depreciation and amortization:
Olefins & Polyolefins - Americas		$	75			$	69			$	73			$	76			$	293			$	73			$	74			$	147
Olefins & Polyolefins - Europe, Asia, International			77				76				78				56				287				70				67				137
Intermediates & Derivatives			48				50				50				56				204				55				56				111
Refining			36				37				45				42				160				42				42				84
Technology			17				20				16				22				75				16				15				31
Other			—				2				—				—				2				—				—				—
Continuing Operations		$	253			$	254			$	262			$	252			$	1,021			$	256			$	254			$	510
EBITDA: (a)
Olefins & Polyolefins - Americas		$	898			$	951			$	841			$	883			$	3,573			$	736			$	978			$	1,714
Olefins & Polyolefins - Europe, Asia, International			225				295				204				115				839				356				319				675
Intermediates & Derivatives			373				338				427				354				1,492				375				430				805
Refining			20				20				8				134				182				129				137				266
Technology			66				59				52				55				232				76				71				147
Other			3				(11	)			(1	)			2				(7	)			(4	)			6				2
Continuing Operations		$	1,585			$	1,652			$	1,531			$	1,543			$	6,311			$	1,668			$	1,941			$	3,609
Capital, turnarounds and IT deferred spending:
Olefins & Polyolefins - Americas		$	122			$	122			$	218			$	183			$	645			$	231			$	306			$	537
Olefins & Polyolefins - Europe, Asia, International			63				46				44				76				229				33				27				60
Intermediates & Derivatives			106				141				119				77				443				45				52				97
Refining			93				67				36				13				209				32				20				52
Technology			7				6				7				10				30				2				6				8
Other			—				5				(1	)			1				5				—				4				4
Total			391				387				423				360				1,561				343				415				758
Deferred charges included above			—				—				—				—				—				—				—				—
Continuing Operations		$	391			$	387			$	423			$	360			$	1,561			$	343			$	415			$	758

 

(a)	See Table 8 for EBITDA calculation.

 

LyondellBasell Industries		10
www.lyondellbasell.com

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Table 8 - EBITDA Calculation

 

		2013																				2014
(Millions of U.S. dollars)		Q1				Q2				Q3				Q4				Total				Q1				Q2				YTD
Net income attributable to the Company shareholders		$	901			$	929			$	853			$	1,174			$	3,857			$	945			$	1,178			$	2,123
Net income (loss) attributable to non-controlling interests			(1	)			(2	)			(2	)			1				(4	)			(1	)			(2	)			(3	)
(Income) loss from discontinued operations, net of tax			6				(4	)			3				2				7				(1	)			(3	)			(4	)
Income from continuing operations			906				923				854				1,177				3,860				943				1,173				2,116
Provision for income taxes			357				410				339				30				1,136				383				425				808
Depreciation and amortization			253				254				262				252				1,021				256				254				510
Interest expense, net			69				65				76				84				294				86				89				175
EBITDA		$	1,585			$	1,652			$	1,531			$	1,543			$	6,311			$	1,668			$	1,941			$	3,609

 

 

LyondellBasell Industries		11
www.lyondellbasell.com

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Table 9 - Selected Segment Operating Information

 

		2013																				2014
		Q1				Q2				Q3				Q4				Total				Q1				Q2				YTD
Olefins and Polyolefins - Americas
Volumes (million pounds)
Ethylene produced			2,337				2,412				2,111				2,156				9,016				1,979				1,721				3,700
Propylene produced			624				529				652				646				2,451				611				648				1,259
Polyethylene sold			1,396				1,389				1,378				1,409				5,572				1,406				1,451				2,857
Polypropylene sold			565				637				669				642				2,513				614				632				1,246
Benchmark Market Prices
West Texas Intermediate crude oil (USD per barrel)			94.43				94.17				105.80				97.60				98.06				98.61				102.99				100.84
Light Louisiana Sweet (“LLS”) crude oil (USD per barrel)			113.86				104.64				109.94				101.12				107.31				104.36				105.55				104.97
Natural gas (USD per million BTUs)			3.45				4.22				3.68				3.70				3.78				5.01				4.74				4.87
U.S. weighted average cost of ethylene production (cents/pound)			13.8				15.7				16.6				18.6				16.2				20.0				17.1				18.6
U.S. ethylene (cents/pound)			48.0				46.3				45.8				46.5				46.7				48.3				47.2				47.8
U.S. polyethylene [high density] (cents/pound)			66.7				68.7				71.7				75.0				70.5				76.3				77.0				76.7
U.S. propylene (cents/pound)			75.0				63.3				68.3				68.2				68.7				73.3				69.7				71.5
U.S. polypropylene [homopolymer] (cents/pound)			88.0				76.2				82.3				82.2				82.2				88.3				84.7				86.5
Olefins and Polyolefins - Europe, Asia, International
Volumes (million pounds)
Ethylene produced			912				991				984				930				3,817				989				1,024				2,013
Propylene produced			577				610				597				568				2,352				582				617				1,199
Polyethylene sold			1,206				1,314				1,212				1,167				4,899				1,275				1,363				2,638
Polypropylene sold			1,657				1,821				1,612				1,531				6,621				1,509				1,707				3,216
Benchmark Market Prices (€0.01 per pound)
Western Europe weighted average cost of ethylene production			36.2				29.3				34.9				38.5				34.7				32.9				34.3				33.6
Western Europe ethylene			58.6				54.4				55.0				55.1				55.8				54.7				52.8				53.8
Western Europe polyethylene [high density]			61.2				56.8				57.9				57.1				58.2				56.1				54.8				55.5
Western Europe propylene			50.6				47.9				49.6				49.9				49.5				51.3				52.2				51.7
Western Europe polypropylene [homopolymer]			59.1				56.1				58.1				58.2				57.9				59.9				61.3				60.6
Intermediates and Derivatives
Volumes (million pounds)
Propylene oxide and derivatives			683				665				665				729				2,742				772				781				1,553
Ethylene oxide and derivatives			260				277				294				346				1,177				262				319				581
Styrene monomer			703				589				756				832				2,880				683				870				1,553
Acetyls			431				470				506				510				1,917				683				592				1,275
TBA Intermediates			434				357				425				442				1,658				416				391				807
Volumes (million gallons)
MTBE/ETBE			185				235				241				222				883				188				266				454
Benchmark Market Margins (cents per gallon)
MTBE - Northwest Europe			104.9				88.4				86.8				37.8				79.1				63.4				90.7				76.8
Refining
Volumes (thousands of barrels per day)
Heavy crude oil processing rate			173				265				250				239				232				247				257				252
Benchmark Market Margins
Light crude oil - 2-1-1			11.53				14.63				12.63				12.67				12.89				13.18				17.29				15.27
Light crude oil - Maya differential			11.17				6.95				10.59				11.65				10.05				15.08				9.72				12.41

Source: LYB and third party consultants

Note: Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect discounted prices.

 

LyondellBasell Industries		12
www.lyondellbasell.com

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Table 10 - Unaudited Income Statement Information

 

		2013																				2014
(Millions of U.S. dollars)		Q1				Q2				Q3				Q4				Total				Q1				Q2				YTD
Sales and other operating revenues		$	10,669			$	11,103			$	11,152			$	11,138			$	44,062			$	11,135			$	12,117			$	23,252
Cost of sales			9,153				9,496				9,690				9,601				37,940				9,577				10,255				19,832
Selling, general and administrative expenses			213				208				220				229				870				186				215				401
Research and development expenses			36				35				35				44				150				32				34				66
Operating income			1,267				1,364				1,207				1,264				5,102				1,340				1,613				2,953
Income from equity investments			59				43				61				40				203				61				68				129
Interest expense, net			(69	)			(65	)			(76	)			(84	)			(294	)			(86	)			(89	)			(175	)
Other income (expense), net			6				(8	)			1				(13	)			(14	)			11				6				17
Reorganization items			—				(1	)			—				—				(1	)			—				—				—
Income from continuing operations before income taxes			1,263				1,333				1,193				1,207				4,996				1,326				1,598				2,924
Provision for income taxes			357				410				339				30				1,136				383				425				808
Income from continuing operations			906				923				854				1,177				3,860				943				1,173				2,116
Income (loss) from discontinued operations, net of tax			(6	)			4				(3	)			(2	)			(7	)			1				3				4
Net income			900				927				851				1,175				3,853				944				1,176				2,120
Net (income) loss attributable to non-controlling interests			1				2				2				(1	)			4				1				2				3
Net income attributable to the Company shareholders		$	901			$	929			$	853			$	1,174			$	3,857			$	945			$	1,178			$	2,123

 

 

LyondellBasell Industries		13
www.lyondellbasell.com

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Table 11 - Charges (Benefits) Included in Income from Continuing Operations

 

		2013																				2014
Millions of U.S. dollars (except share data)		Q1				Q2				Q3				Q4				Total				Q1				Q2				YTD
Pretax charges (benefits):
Impairments		$	—			$	—			$	—			$	10			$	10			$	—			$	—			$	—
Insurance settlement			—				—				—				(25	)			(25	)			—				—				—
Settlement of environmental indemnification agreement			—				—				—				—				—				(52	)			—				(52	)
Loss on sale of investment			—				—				—				16				16				—				—				—
Total pretax charges (benefits)			—				—				—				1				1				(52	)			—				(52	)
Provision for income tax related to these items			—				—				—				4				4				—				—				—
After-tax effect of net charges (benefits)		$	—			$	—			$	—			$	5			$	5			$	(52	)		$	—			$	(52	)
Effect on diluted earnings per share		$	—			$	—			$	—			$	—			$	—			$	0.09			$	—			$	0.09

 

 

LyondellBasell Industries		14
www.lyondellbasell.com

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Table 12 - Unaudited Cash Flow Information

 

		2013																				2014
(Millions of U.S. dollars)		Q1				Q2				Q3				Q4				Total				Q1				Q2				YTD
Net cash provided by operating activities		$	799			$	1,246			$	1,116			$	1,674			$	4,835			$	801			$	1,797			$	2,598
Net cash used in investing activities			(408	)			(389	)			(438	)			(367	)			(1,602	)			(2,011	)			(246	)			(2,257	)
Net cash provided by (used in) financing activities			(234	)			(508	)			452				(1,299	)			(1,589	)			(550	)			(2,217	)			(2,767	)

 

LyondellBasell Industries		15
www.lyondellbasell.com

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Table 13 - Unaudited Balance Sheet Information

 

		March 31,				June 30,				September 30,				December 31,				March 31,				June 30,
(Millions of U.S. dollars)		2013				2013				2013				2013				2014				2014
Cash and cash equivalents		$	2,879			$	3,233			$	4,414			$	4,450			$	2,702			$	2,030
Restricted cash			6				2				4				10				3				2
Short-term investments			—				—				—				—				1,402				1,299
Accounts receivable, net			3,878				4,023				4,041				4,030				4,141				4,264
Inventories			5,270				5,197				5,382				5,279				5,589				5,326
Prepaid expenses and other current assets			622				577				784				830				1,156				784
Total current assets			12,655				13,032				14,625				14,599				14,993				13,705
Property, plant and equipment, net			7,779				7,979				8,223				8,457				8,556				8,740
Investments and long-term receivables:
Investment in PO joint ventures			401				409				423				421				424				418
Equity investments			1,607				1,622				1,615				1,629				1,693				1,702
Other investments and long-term receivables			421				231				164				64				62				58
Goodwill			582				588				598				605				605				602
Intangible assets, net			999				966				934				904				870				838
Other assets			233				221				229				619				624				593
Total assets		$	24,677			$	25,048			$	26,811			$	27,298			$	27,827			$	26,656
Current maturities of long-term debt		$	1			$	1			$	1			$	1			$	3			$	3
Short-term debt			115				114				114				58				58				55
Accounts payable			3,217				3,324				3,241				3,572				3,642				3,690
Accrued liabilities			1,217				1,047				1,528				1,299				1,477				1,310
Deferred income taxes			557				550				494				580				540				570
Total current liabilities			5,107				5,036				5,378				5,510				5,720				5,628
Long-term debt			4,307				4,306				5,774				5,776				6,766				6,766
Other liabilities			2,306				2,325				2,278				1,839				1,838				1,851
Deferred income taxes			1,277				1,312				1,472				1,659				1,677				1,623
Stockholders’ equity			11,641				12,032				11,874				12,478				11,791				10,753
Non-controlling interests			39				37				35				36				35				35
Total liabilities and stockholders’ equity		$	24,677			$	25,048			$	26,811			$	27,298			$	27,827			$	26,656

 

LyondellBasell Industries		16
www.lyondellbasell.com

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