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): October 24, 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, October 24, 2014, announcing its earnings for the quarter ended September 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 third quarter 2014 results on October 24, 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 October 24, 2014

99.2 Presentation – LyondellBasell Industries N.V. Third 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: October 24, 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 October 24, 2014
99.2		Presentation – LyondellBasell Industries N.V. Third Quarter 2014 Earnings

Exhibit 99.1

 

NEWS RELEASE   HOUSTON and LONDON, October 24, 2014

LyondellBasell Reports Record Third-Quarter 2014 Results

Third-Quarter 2014 Highlights

 

•

Second consecutive quarter of record earnings

 

•

Diluted earnings per share of $2.46

 

•

Income from continuing operations of $1.3 billion

 

•

EBITDA of $2.0 billion

 

•

O&P Americas segment achieved EBITDA exceeding $1.1 billion

 

•

Announced the development of two new growth projects during the quarter

 

•

$5.4 billion of share repurchases and dividends year to date

 

•

Repurchased approximately 12 million shares during the third quarter

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the third quarter 2014 of $1.3 billion, or $2.46 diluted earnings per share. Third quarter 2014 EBITDA was $2.0 billion. The quarter includes a $45 million non-cash charge for the impact of a lower of cost or market (LCM) inventory adjustment. The increase from the second quarter 2014 was primarily due to increased earnings in our Olefins and Polyolefins – Americas segment.

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

Table 1 - Earnings Summary

 

		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
Millions of U.S. dollars (except share data)		2014				2014				2013				2014				2013
Sales and other operating revenues		$	12,066			$	12,117			$	11,152			$	35,318			$	32,924
Net income(a)			1,257				1,176				851				3,377				2,678
Income from continuing operations(b)			1,260				1,173				854				3,376				2,683
Diluted earnings per share (U.S. dollars):
Net income(c)			2.45				2.23				1.50				6.38				4.66
Income from continuing operations(b)			2.46				2.22				1.51				6.38				4.67
Diluted share count (millions)			512				527				567				529				575
EBITDA(d)			2,035				1,941				1,531				5,644				4,768

 

(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 net income and income from continuing operations.

 

LyondellBasell Industries		1
www.lyondellbasell.com

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“We are pleased to deliver a second consecutive quarter of record earnings, and our best quarter ever. During the third quarter we achieved diluted earnings per share from continuing operations of $2.46 and, for the first time, EBITDA exceeded $2 billion. Our Olefins and Polyolefins- Americas segment generated EBITDA in excess of $1.1 billion during the quarter. A tight U.S. ethylene market helped drive the record earnings,” said Jim Gallogly, LyondellBasell Chief Executive Officer.

“In addition to our strong earnings, we continue to return cash to our shareholders. During the quarter, dividends and share repurchases totaled $1.6 billion. We repurchased approximately 12 million shares during the third quarter, and approximately 46 million shares year to date. Since the first share repurchase program was started in May 2013, we have repurchased approximately 73 million shares, or approximately 13 percent of the shares outstanding,” continued Gallogly.

“Industry fundamentals remained strong during the quarter, and we continue to make progress on our investment program. Late in the quarter we initiated production from the 800 million pound per year La Porte ethylene expansion. This is the first of multiple ethylene expansions by the company, putting us well ahead of new greenfield plants pursued by others in the industry. In addition, we announced the development of two new growth projects, a further expansion of our Channelview olefins complex and a new U.S. Gulf Coast PO/TBA plant. Both projects take advantage of the favorable environment for North American raw materials, and the PO/TBA plant leverages our proprietary technology. These projects demonstrate that LyondellBasell has continued organic growth opportunities,” Gallogly added.

OUTLOOK

“Despite declines in crude oil prices, U.S. industry fundamentals remained favorable through the first weeks of October. Domestic ethylene and polyolefins pricing remained strong, and we continued to benefit from favorable NGL pricing. Our fourth quarter results should be favorably impacted by the new La Porte ethylene capacity. Additionally, our refinery should begin receiving shipments of Canadian crude from the Flanagan South pipeline. However, we historically experience margin compression in products such as oxyfuels in winter months and slower polyolefin demand around the holiday season. Recent crude oil price declines are expected to ultimately impact domestic margins but today’s tight market conditions may delay the timing of potential declines. We are watching to see how this develops. Given favorable NGL prices, our domestic assets remain significantly advantaged,” 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; 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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	1,068			$	898			$	759			$	2,622			$	2,452
EBITDA			1,157				978				841				2,871				2,690

Three months ended September 30, 2014 versus three months ended June 30, 2014 – The segment achieved record EBITDA results in the third quarter of 2014. EBITDA increased $179 million versus the second quarter 2014. Third quarter results include a $45 million non-cash LCM charge generated from a decline in inventory valuation. Compared to the prior period, olefins results increased approximately $220 million. This increase was largely driven by an increase in the average ethylene price of approximately eight cents per pound during the period. Third quarter ethylene sales volumes increased despite being negatively impacted by the delayed restart of the La Porte olefins plant. Combined polyolefin results decreased by approximately $40 million from the second quarter 2014. Strong demand was offset by a decrease in the ethylene to polyethylene price spread of seven cents per pound. Joint venture equity income was stable quarter on quarter.

Three months ended September 30, 2014 versus three months ended September 30, 2013 – EBITDA increased $316 million versus the third quarter 2013. The third quarter 2014 included a $45 million non-cash LCM charge. Olefins results increased approximately $260 million compared to the prior year period. Margins benefited from lower NGL costs and an approximately nine cents per pound higher average price of ethylene compared to the prior year period. Ethylene demand improved primarily from increased internal polyethylene production. Polyethylene results increased by approximately $35 million as volume improved by approximately 15 percent. Polypropylene results increased by approximately $10 million primarily from higher margins. Joint venture equity income decreased by $1 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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	223			$	190			$	78			$	638			$	360
EBITDA			343				319				204				1,018				724

Three months ended September 30, 2014 versus three months ended June 30, 2014 – EBITDA increased $24 million versus the second quarter 2014. Olefins results increased by approximately $35 million primarily due to lower production costs. Approximately 55 percent of our ethylene production was sourced from advantaged raw materials. Ethylene operating rates were 95 percent during the third quarter. Combined polyolefin results increased by approximately $15 million. Combined polypropylene compounds and polybutene-1 results declined approximately $15 million as volume declined approximately 6 percent from lower seasonal demand. Equity income from joint ventures decreased by $7 million from the second quarter 2014 primarily as a result of planned and unplanned maintenance.

Three months ended September 30, 2014 versus three months ended September 30, 2013 – EBITDA increased $139 million versus the third quarter 2013. Olefins results increased by approximately $85 million primarily as a result of higher margins from processing advantaged feedstocks, lower naphtha, higher operating rates, and improved co-product values. Combined polyolefin results increased approximately $50 million primarily as a result of higher margins. Polypropylene compounds and polybutene-1 results decreased by approximately $10 million from the prior year period. Equity income from joint ventures increased $8 million from the third 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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	321			$	375			$	371			$	1,012			$	979
EBITDA			383				430				427				1,188				1,138

Three months ended September 30, 2014 versus three months ended June 30, 2014 – EBITDA decreased $47 million versus the second quarter 2014. Results for PO and PO derivatives increased by approximately $25 million. Increased PO volumes and higher PO derivative margins drove the increase. Intermediate chemicals results decreased by approximately $50 million. Lower styrene results and unplanned outages at our ethylene oxide and methanol plants were responsible for the decline. Oxyfuels results declined by approximately $20 million due to lower sales volumes. Equity income from joint ventures increased by $3 million.

Three months ended September 30, 2014 versus three months ended September 30, 2013 – EBITDA decreased $44 million compared to the third quarter 2013. Results for PO and PO derivatives increased by approximately $30 million as a result of higher volumes and better pricing as a result of tight PO supply. Intermediate chemicals results were lower by approximately $55 million despite higher methanol volume. Styrene raw material margins declined approximately 13 cents per pound from strong third quarter 2013 margins. Oxyfuels results decreased by approximately $30 million. Equity income from joint ventures decreased $4 million from the third quarter 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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income (loss)		$	67			$	95			($	37	)		$	248			($	70	)
EBITDA			110				137				8				376				48

Three months ended September 30, 2014 versus three months ended June 30, 2014 – EBITDA decreased $27 million versus the second quarter 2014. The refinery processed 264,000 barrels per day, up 7,000 barrels per day from the prior quarter. Compared to the prior quarter, the Maya 2-1-1 benchmark crack spread declined by $2.66 per barrel, averaging $24.35 per barrel. The corresponding Houston refinery spread experienced a smaller decline due primarily to favorable crude purchases relative to Maya. Hydrodesulfurization unit maintenance lowered finished product yields resulting in lower margins. The cost of Renewable Identification Numbers (RINs) to meet U.S. renewable fuel standards was relatively unchanged versus the second quarter 2014.

Three months ended September 30, 2014 versus three months ended September 30, 2013 – EBITDA increased $102 million versus the third quarter 2013. The refinery processed 14,000 barrels per day more than the prior year period. Compared to the third quarter 2013, the Maya 2-1-1 benchmark spread increased $1.13 per barrel. The refinery also benefited from better margins on secondary products, such as propylene, naphtha, and NGLs. The cost of RINs decreased by approximately $10 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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
Millions of U.S. dollars		2014				2014				2013				2014				2013
Operating income		$	26			$	56			$	35			$	142			$	124
EBITDA			41				71				52				188			$	177

Three months ended September 30, 2014 versus three months ended June 30, 2014 – EBITDA decreased by $30 million from lower licensing results.

Three months ended September 30, 2014 versus three months ended September 30, 2013 – EBITDA decreased by $11 million from lower licensing results.

Capital spending and cash balances

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $338 million in the third quarter 2014. Our cash and short-term securities balance was $2.9 billion at September 30, 2014. We repurchased approximately 12 million of our outstanding ordinary shares and paid $358 million in dividends during the third quarter of 2014. There were 504 million common shares outstanding as of September 30^th.

CONFERENCE CALL

LyondellBasell will host a conference call October 24 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.lyb.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 October 24 until November 24 at 11 p.m. ET. The replay dial-in numbers are 800-947-6627 (U.S.) and +1 203-369-3974 (international). The pass code for each is 3675.

The slides that accompany the call will be available at http://www.lyb.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.lyb.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.lyb.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:		George Smalley +1 713-309-7575
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				Q3				YTD
Sales and other operating revenues:
Olefins & Polyolefins - Americas		$	3,244			$	3,251			$	3,315			$	3,279			$	13,089			$	3,357			$	3,462			$	3,750			$	10,569
Olefins & Polyolefins - Europe, Asia, International			3,800				3,708				3,594				3,583				14,685				3,778				4,069				3,995				11,842
Intermediates & Derivatives			2,282				2,217				2,452				2,521				9,472				2,429				2,706				2,691				7,826
Refining			2,468				3,077				3,177				2,976				11,698				2,756				3,250				3,146				9,152
Technology			134				132				124				142				532				136				144				107				387
Other			(1,259	)			(1,282	)			(1,510	)			(1,363	)			(5,414	)			(1,321	)			(1,514	)			(1,623	)			(4,458	)
Continuing Operations		$	10,669			$	11,103			$	11,152			$	11,138			$	44,062			$	11,135			$	12,117			$	12,066			$	35,318
Operating income (loss):
Olefins & Polyolefins - Americas		$	821			$	872			$	759			$	801			$	3,253			$	656			$	898			$	1,068			$	2,622
Olefins & Polyolefins - Europe, Asia, International			93				189				78				17				377				225				190				223				638
Intermediates & Derivatives			323				285				371				321				1,300				316				375				321				1,012
Refining			(17	)			(16	)			(37	)			92				22				86				95				67				248
Technology			50				39				35				33				157				60				56				26				142
Other			(3	)			(5	)			1				—				(7	)			(3	)			(1	)			1				(3	)
Continuing Operations		$	1,267			$	1,364			$	1,207			$	1,264			$	5,102			$	1,340			$	1,613			$	1,706			$	4,659
Depreciation and amortization:
Olefins & Polyolefins - Americas		$	75			$	69			$	73			$	76			$	293			$	73			$	74			$	84			$	231
Olefins & Polyolefins - Europe, Asia, International			77				76				78				56				287				70				67				65				202
Intermediates & Derivatives			48				50				50				56				204				55				56				55				166
Refining			36				37				45				42				160				42				42				42				126
Technology			17				20				16				22				75				16				15				16				47
Other			—				2				—				—				2				—				—				—				—
Continuing Operations		$	253			$	254			$	262			$	252			$	1,021			$	256			$	254			$	262			$	772
EBITDA: (a)
Olefins & Polyolefins - Americas		$	898			$	951			$	841			$	883			$	3,573			$	736			$	978			$	1,157			$	2,871
Olefins & Polyolefins - Europe, Asia, International			225				295				204				115				839				356				319				343				1,018
Intermediates & Derivatives			373				338				427				354				1,492				375				430				383				1,188
Refining			20				20				8				134				182				129				137				110				376
Technology			66				59				52				55				232				76				71				41				188
Other			3				(11	)			(1	)			2				(7	)			(4	)			6				1				3
Continuing Operations		$	1,585			$	1,652			$	1,531			$	1,543			$	6,311			$	1,668			$	1,941			$	2,035			$	5,644
Capital, turnarounds and IT deferred spending:
Olefins & Polyolefins - Americas		$	122			$	122			$	218			$	183			$	645			$	231			$	306			$	208			$	745
Olefins & Polyolefins - Europe, Asia, International			63				46				44				76				229				33				27				45				105
Intermediates & Derivatives			106				141				119				77				443				45				52				50				147
Refining			93				67				36				13				209				32				20				27				79
Technology			7				6				7				10				30				2				6				6				14
Other			—				5				(1	)			1				5				—				4				2				6
Total			391				387				423				360				1,561				343				415				338				1,096
Deferred charges included above			—				—				—				—				—				—				—				—				—
Continuing Operations		$	391			$	387			$	423			$	360			$	1,561			$	343			$	415			$	338			$	1,096

 

(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				Q3				YTD
Net income attributable to the Company shareholders		$	901			$	929			$	853			$	1,174			$	3,857			$	945			$	1,178			$	1,258			$	3,381
Net income (loss) attributable to non-controlling interests			(1	)			(2	)			(2	)			1				(4	)			(1	)			(2	)			(1	)			(4	)
(Income) loss from discontinued operations, net of tax			6				(4	)			3				2				7				(1	)			(3	)			3				(1	)
Income from continuing operations			906				923				854				1,177				3,860				943				1,173				1,260				3,376
Provision for income taxes			357				410				339				30				1,136				383				425				434				1,242
Depreciation and amortization			253				254				262				252				1,021				256				254				262				772
Interest expense, net			69				65				76				84				294				86				89				79				254
EBITDA		$	1,585			$	1,652			$	1,531			$	1,543			$	6,311			$	1,668			$	1,941			$	2,035			$	5,644

 

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				Q3				YTD
Olefins and Polyolefins - Americas
Volumes (million pounds)
Ethylene produced			2,337				2,412				2,111				2,156				9,016				1,979				1,721				2,301				6,001
Propylene produced			624				529				652				646				2,451				611				648				559				1,818
Polyethylene sold			1,396				1,389				1,378				1,409				5,572				1,406				1,451				1,577				4,434
Polypropylene sold			565				637				669				642				2,513				614				632				681				1,927
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				97.25				99.62
Light Louisiana Sweet (“LLS”) crude oil (USD per barrel)			113.86				104.64				109.94				101.12				107.31				104.36				105.55				101.03				103.63
Natural gas (USD per million BTUs)			3.45				4.22				3.68				3.70				3.78				5.01				4.74				4.19				4.65
U.S. weighted average cost of ethylene production (cents/pound)			13.8				15.7				16.6				18.6				16.2				20.0				17.1				14.5				17.1
U.S. ethylene (cents/pound)			48.0				46.3				45.8				46.5				46.7				48.3				47.2				51.8				49.1
U.S. polyethylene [high density] (cents/pound)			66.7				68.7				71.7				75.0				70.5				76.3				77.0				78.0				77.1
U.S. propylene (cents/pound)			75.0				63.3				68.3				68.2				68.7				73.3				69.7				70.8				71.3
U.S. polypropylene [homopolymer] (cents/pound)			88.0				76.2				82.3				82.2				82.2				88.3				84.7				86.3				86.4
Olefins and Polyolefins - Europe, Asia, International
Volumes (million pounds)
Ethylene produced			912				991				984				930				3,817				989				1,024				1,039				3,052
Propylene produced			577				610				597				568				2,352				582				617				629				1,828
Polyethylene sold			1,206				1,314				1,212				1,167				4,899				1,275				1,363				1,284				3,922
Polypropylene sold			1,657				1,821				1,612				1,531				6,621				1,509				1,707				1,633				4,849
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				31.5				32.9
Western Europe ethylene			58.6				54.4				55.0				55.1				55.8				54.7				52.8				54.1				53.9
Western Europe polyethylene [high density]			61.2				56.8				57.9				57.1				58.2				56.1				54.8				55.4				55.5
Western Europe propylene			50.6				47.9				49.6				49.9				49.5				51.3				52.2				51.9				51.8
Western Europe polypropylene [homopolymer]			59.1				56.1				58.1				58.2				57.9				59.9				61.3				61.4				60.9
Intermediates and Derivatives
Volumes (million pounds)
Propylene oxide and derivatives			683				665				665				729				2,742				772				726				768				2,266
Ethylene oxide and derivatives			260				277				294				346				1,177				262				319				211				792
Styrene monomer			703				589				756				832				2,880				683				870				933				2,486
Acetyls			431				470				506				510				1,917				683				592				613				1,888
TBA Intermediates			434				357				425				442				1,658				416				391				461				1,268
Volumes (million gallons)
MTBE/ETBE			185				235				241				222				883				188				266				245				699
Benchmark Market Margins (cents per gallon)
MTBE - Northwest Europe			104.9				88.4				86.8				37.8				79.1				63.4				90.7				111.8				86.4
Refining
Volumes (thousands of barrels per day)
Heavy crude oil processing rate			173				265				250				239				232				247				257				264				256
Benchmark Market Margins
Light crude oil - 2-1-1			11.53				14.63				12.63				12.67				12.89				13.18				17.29				14.20				14.90
Light crude oil - Maya differential			11.17				6.95				10.59				11.65				10.05				15.08				9.72				10.15				11.64

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				Q3				YTD
Sales and other operating revenues		$	10,669			$	11,103			$	11,152			$	11,138			$	44,062			$	11,135			$	12,117			$	12,066			$	35,318
Cost of sales			9,153				9,496				9,690				9,601				37,940				9,577				10,255				10,118				29,950
Selling, general and administrative expenses			213				208				220				229				870				186				215				211				612
Research and development expenses			36				35				35				44				150				32				34				31				97
Operating income			1,267				1,364				1,207				1,264				5,102				1,340				1,613				1,706				4,659
Income from equity investments			59				43				61				40				203				61				68				64				193
Interest expense, net			(69	)			(65	)			(76	)			(84	)			(294	)			(86	)			(89	)			(79	)			(254	)
Other income (expense), net			6				(9	)			1				(13	)			(15	)			11				6				3				20
Income from continuing operations before income taxes			1,263				1,333				1,193				1,207				4,996				1,326				1,598				1,694				4,618
Provision for income taxes			357				410				339				30				1,136				383				425				434				1,242
Income from continuing operations			906				923				854				1,177				3,860				943				1,173				1,260				3,376
Income (loss) from discontinued operations, net of tax			(6	)			4				(3	)			(2	)			(7	)			1				3				(3	)			1
Net income			900				927				851				1,175				3,853				944				1,176				1,257				3,377
Net (income) loss attributable to non-controlling interests			1				2				2				(1	)			4				1				2				1				4
Net income attributable to the Company shareholders		$	901			$	929			$	853			$	1,174			$	3,857			$	945			$	1,178			$	1,258			$	3,381

 

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				Q3				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				—				—				—				—
Lower of cost or market inventory adjustment			—				—				—				—				—				—				—				45				45
Total pretax charges (benefits)			—				—				—				1				1				(52	)			—				45				(7	)
Provision for (benefit from) income tax related to these items			—				—				—				4				4				—				—				(17	)			(17	)
After-tax effect of net charges (benefits)		$	—			$	—			$	—			$	5			$	5			$	(52	)		$	—			$	28			$	(24	)
Effect on diluted earnings per share		$	—			$	—			$	—			$	—			$	—			$	0.09			$	—			$	(0.05	)		$	0.04

 

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				Q3				YTD
Net cash provided by operating activities		$	799			$	1,246			$	1,116			$	1,674			$	4,835			$	801			$	1,797			$	1,434			$	4,032
Net cash used in investing activities			(408	)			(389	)			(438	)			(367	)			(1,602	)			(2,011	)			(246	)			(638	)			(2,895	)
Net cash provided by (used in) financing activities			(234	)			(508	)			452				(1,299	)			(1,589	)			(550	)			(2,217	)			(1,621	)			(4,388	)

 

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,				September 30,
(Millions of U.S. dollars)		2013				2013				2013				2013				2014				2014				2014
Cash and cash equivalents		$	2,879			$	3,233			$	4,414			$	4,450			$	2,702			$	2,030			$	1,185
Restricted cash			6				2				4				10				3				2				—
Short-term investments			—				—				—				—				1,402				1,299				1,544
Accounts receivable, net			3,878				4,023				4,041				4,030				4,141				4,264				4,105
Inventories			5,270				5,197				5,382				5,279				5,589				5,326				5,359
Prepaid expenses and other current assets			622				577				784				830				1,156				784				739
Total current assets			12,655				13,032				14,625				14,599				14,993				13,705				12,932
Property, plant and equipment, net			7,779				7,979				8,223				8,457				8,556				8,740				8,600
Investments and long-term receivables:
Investment in PO joint ventures			401				409				423				421				424				418				397
Equity investments			1,607				1,622				1,615				1,629				1,693				1,702				1,690
Other investments and long-term receivables			421				231				164				64				62				58				54
Goodwill			582				588				598				605				605				602				576
Intangible assets, net			999				966				934				904				870				838				799
Other assets			233				221				229				619				624				593				583
Total assets		$	24,677			$	25,048			$	26,811			$	27,298			$	27,827			$	26,656			$	25,631
Current maturities of long-term debt		$	1			$	1			$	1			$	1			$	3			$	3			$	2
Short-term debt			115				114				114				58				58				55				56
Accounts payable			3,217				3,324				3,241				3,572				3,642				3,690				3,431
Accrued liabilities			1,217				1,047				1,528				1,299				1,477				1,310				1,460
Deferred income taxes			557				550				494				580				540				570				685
Total current liabilities			5,107				5,036				5,378				5,510				5,720				5,628				5,634
Long-term debt			4,307				4,306				5,774				5,776				6,766				6,766				6,753
Other liabilities			2,306				2,325				2,278				1,839				1,838				1,851				1,795
Deferred income taxes			1,277				1,312				1,472				1,659				1,677				1,623				1,574
Stockholders’ equity			11,641				12,032				11,874				12,478				11,791				10,753				9,843
Non-controlling interests			39				37				35				36				35				35				32
Total liabilities and stockholders’ equity		$	24,677			$	25,048			$	26,811			$	27,298			$	27,827			$	26,656			$	25,631

 

LyondellBasell Industries		16
www.lyondellbasell.com

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