HOUSTON and LONDON, April 28,
2017 /PRNewswire/ --
First Quarter 2017 Highlights
- Income from continuing operations: $0.8
billion
- EBITDA: $1.6 billion
- Diluted earnings per share: $2.00
per share
- Issued $1 billion of 10-year
bonds with a coupon rate of 3.5% due 2027; redeemed $1 billion of outstanding 5.0% bonds due in 2019;
refinancing costs reduced earnings by $0.26 per share
- Share repurchases and dividends totalled $0.5 billion; repurchased 1.5 million shares
during the first quarter
Comparisons with the prior quarter and first quarter
2016 are available in the following table:
Table 1 - Earnings
Summary
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
December
31,
|
March
31,
|
|
Millions of
U.S. dollars (except share data)
|
2017
|
2016
|
2016
|
|
Sales and other
operating revenues
|
$8,430
|
$7,747
|
$6,743
|
|
Net
income(a)
|
797
|
763
|
1,030
|
|
Income from
continuing operations(b)
|
805
|
770
|
1,030
|
|
Diluted earnings per
share (U.S. dollars):
|
|
|
|
|
|
Net
income(c)
|
1.98
|
1.87
|
2.37
|
|
|
Income from
continuing operations(b)
|
2.00
|
1.89
|
2.37
|
|
Diluted share count
(millions)
|
403
|
407
|
434
|
|
EBITDA(d)
|
1,617
|
1,406
|
1,807
|
|
|
|
|
|
|
|
Excluding LCM
Impact:
|
|
|
|
|
LCM,
pre-tax(e)
|
- -
|
29
|
68
|
|
Income from
continuing operations(b)
|
805
|
788
|
1,077
|
|
Diluted earnings per
share (U.S. dollars):
|
|
|
|
|
|
Income from
continuing operations(b)
|
2.00
|
1.94
|
2.48
|
|
EBITDA(d)
|
1,617
|
1,435
|
1,875
|
|
|
|
(a)
|
Includes net income
attributable to non-controlling interests and loss from
discontinued operations, net of tax. See Table 10.
|
(b)
|
See Table 11 for
charges and benefits to income from continuing
operations.
|
(c)
|
Includes diluted
earnings (loss) 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.
|
(e)
|
LCM stands for lower
of cost or market. An explanation of LCM and why we have excluded
it from our financial information in this press release can be
found at the end of this press release under "Information Related
to Financial Measures."
|
LyondellBasell Industries (NYSE: LYB) today announced earnings
from continuing operations for the first quarter 2017 of
$0.8 billion, or $2.00 per share. First quarter 2017 EBITDA
was $1.6 billion. During the
quarter, the company redeemed $1
billion of outstanding 5.0% bonds that were due in 2019 with
a new $1 billion ten-year bond issue
at an after-tax cost of $106 million
that reduced earnings by $0.26 per
share.
"We began the year with improved results in our three largest
segments. Olefins and polyolefins demand continued to be
solid across all regions and we increased volumes from our
Corpus Christi ethylene
expansion. The Intermediates and Derivatives segment
benefitted from improved first quarter profitability for styrene
and methanol," said Bob Patel,
LyondellBasell CEO and chairman of the management board.
"The first quarter marks the completion of several quarters of
significant maintenance activity across our system. Scheduled
maintenance on our U.S. butadiene recovery plant reduced our
capture of high margins during the first quarter. Our
refinery performed planned maintenance on the fluid unit, completed
repairs on one of our two crude distillation units and successfully
commissioned our investment for the production of Tier 3 low-sulfur
gasoline. We look forward to the refinery returning to more
consistent operations," said Patel.
OUTLOOK
"During April, global olefin and polyolefin
industry conditions continue to remain favorable. While first
quarter maintenance was relatively light for the U.S. ethylene
industry, industry schedules show higher planned downtime in
Europe and Asia during the second quarter. With a
lighter maintenance schedule ahead for LyondellBasell, we look
forward to benefitting from the full availability of our global
assets," Patel said.
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.
The following comments and analysis represent underlying
business activity and are exclusive of LCM inventory
adjustments.
Olefins & Polyolefins - Americas (O&P-Americas) –
Our O&P–Americas segment produces and markets olefins and
co-products, polyethylene and polypropylene.
Table 2 -
O&P–Americas Financial Overview
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
December
31,
|
March
31,
|
|
Millions of
U.S. dollars
|
2017
|
2016
|
2016
|
|
Operating
income
|
$559
|
$458
|
$707
|
|
EBITDA
|
723
|
563
|
878
|
|
LCM,
pre-tax
|
- -
|
29
|
- -
|
|
EBITDA excluding
LCM
|
723
|
592
|
878
|
|
Three months ended March 31,
2017 versus three months ended December 31, 2016 – EBITDA increased
$131 million versus the fourth
quarter 2016, excluding a favorable $29
million quarter to quarter variance as a result of a 2016
LCM inventory adjustment. First quarter 2017 included a
$31 million gain on the sale of
property in Lake Charles, Louisiana. Fourth quarter 2016
results reflected a pension settlement charge of $23 million and a last-in, first-out (LIFO)
inventory charge of $20
million. Compared to the prior period, olefin results
increased approximately $95
million. Ethylene sales increased 5 percent following
the completion of planned maintenance and higher rates following
our expansion at Corpus Christi.
Ethylene margins improved by approximately 3 cents per pound with rising prices for ethylene
and co-products. Combined polyolefin results declined by
approximately $45 million.
Ethylene and propylene feedstock price increases outpaced higher
polyolefin prices, resulting in a decline in polyethylene and
polypropylene spreads of approximately 2
cents per pound and 4 cents
per pound respectively, which were partially offset by small volume
improvements. Joint venture equity income increased by
$9 million.
Three months ended March 31,
2017 versus three months ended March
31, 2016 – EBITDA decreased $155
million versus the first quarter 2016. First quarter
2017 included a $31 million gain on
the sale of property in Lake Charles, Louisiana. The first
quarter of 2016 included a $57
million gain on the sale of the Petroken polypropylene
business. Olefin results increased by approximately
$50 million primarily due to an
increase in ethylene margin of 3
cents per pound. Combined polyolefin results declined
approximately $165 million from very
strong levels in the prior year period. Polyethylene and
polypropylene spreads declined approximately 3 cents per pound and 14
cents per pound respectively. Joint venture equity income
declined by $8
million.
Olefins & Polyolefins - Europe, Asia,
International (O&P-EAI) – Our O&P–EAI segment
produces and markets olefins and co-products, polyethylene and
polypropylene, including polypropylene compounds.
Table 3 -
O&P–EAI Financial Overview
|
|
|
Three Months
Ended
|
|
|
March
31,
|
December
31,
|
March
31,
|
Millions of
U.S. dollars
|
2017
|
2016
|
2016
|
Operating
income
|
$401
|
$266
|
$358
|
EBITDA
|
529
|
398
|
509
|
LCM,
pre-tax
|
- -
|
- -
|
40
|
EBITDA excluding
LCM
|
529
|
398
|
549
|
Three months ended March 31,
2017 versus three months ended December 31, 2016 – EBITDA increased by
$131 million versus the fourth
quarter 2016. Fourth quarter 2016 results reflected a LIFO
inventory charge of $17 million and a
pension settlement charge of $8
million. Olefin results increased approximately
$60 million as ethylene prices
increased nearly 3 cents per pound
and higher co-products value offset higher naphtha costs. Olefins
also benefitted from increased volume due to the absence of fourth
quarter maintenance. Combined polyolefin results increased
approximately $50 million primarily
due to increased sales volumes. Joint venture equity income
declined by $4 million.
Three months ended March 31,
2017 versus three months ended March
31, 2016 – EBITDA decreased by $20 million versus the first quarter 2016,
excluding a favorable $40 million
quarter to quarter variance as a result of a 2016 LCM inventory
adjustment. The first quarter of 2016 benefitted from a
$21 million gain on the sale of the
Petroken polypropylene compounding business. Olefin results
increased by approximately $20
million as a result of increased sales volumes due to the
planned maintenance which occurred in the first quarter of 2016 and
improved ethylene prices. Combined polyolefin results
declined by approximately $20 million
as polyethylene spreads declined. Joint venture equity income
was relatively unchanged.
Intermediates & Derivatives (I&D) – Our
I&D segment produces and markets propylene oxide (PO) and its
derivatives, oxyfuels and related products and intermediate
chemicals, such as styrene monomer, acetyls, ethylene oxide and
ethylene glycol.
Table 4 - I&D
Financial Overview
|
|
Three Months
Ended
|
|
|
March
31,
|
December
31,
|
March
31,
|
|
Millions of
U.S. dollars
|
2017
|
2016
|
2016
|
|
Operating
income
|
$269
|
$236
|
$255
|
|
EBITDA
|
339
|
306
|
326
|
|
LCM,
pre-tax
|
- -
|
- -
|
28
|
|
EBITDA excluding
LCM
|
339
|
306
|
354
|
|
Three months ended March 31,
2017 versus three months ended December 31, 2016 – EBITDA increased
$33 million versus the fourth quarter
2016. Fourth quarter 2016 results reflected a LIFO inventory
charge of $16 million and a pension
settlement charge of $16
million. PO and derivatives results improved by
approximately $15 million. In
intermediate chemicals, styrene and methanol were the primary
drivers behind approximately $65
million of margin improvement over the fourth quarter.
These gains in the PO and derivatives and intermediate chemicals
businesses were offset by approximately $40
million of charges in the first quarter and $30 million of gains in the fourth quarter
related to recovery of precious metals after catalyst
changes. Oxyfuels and related products results declined
approximately $10 million on lower
sales volumes. Joint venture equity income was relatively
unchanged.
Three months ended March 31,
2017 versus three months ended March
31, 2016 – EBITDA decreased $15
million versus the first quarter 2016, excluding a favorable
$28 million quarter to quarter
variance as a result of an LCM inventory adjustment. PO and
derivatives results declined by approximately $15 million. In intermediate chemicals,
strong margins in styrene and methanol drove approximately
$35 million of improvement over the
first quarter of 2016. The PO and derivatives and
intermediate chemicals businesses incurred approximately
$30 million of increased charges
related to recovery of precious metals after catalyst
changes. Oxyfuels and related products results were
relatively unchanged. Joint venture equity income was
relatively unchanged.
Refining – The primary products of this segment
include gasoline and distillates, including diesel fuel, heating
oil and jet fuel.
Table 5 - Refining
Financial Overview
|
|
Three Months
Ended
|
|
|
March
31,
|
December
31,
|
March
31,
|
|
Millions of
U.S. dollars
|
2017
|
2016
|
2016
|
|
Operating income
(loss)
|
($70)
|
$40
|
($30)
|
|
EBITDA
|
(30)
|
81
|
14
|
|
EBITDA excluding
LCM
|
(30)
|
81
|
14
|
|
Three months ended March 31,
2017 versus three months ended December 31, 2016 – EBITDA decreased
$111 million versus the fourth
quarter 2016. Fourth quarter 2016 results reflected a LIFO
benefit of $46 million primarily from
low-priced crude inventory consumption, and a pension settlement
charge of $8 million.
Underlying operational performance accounted for approximately
$60 million of the decline. The
Houston refinery operated at
202,000 barrels per day, 26,000 barrels per day less than the prior
quarter due to planned maintenance. Planned maintenance on the
fluid catalytic cracker reduced product yields and gasoline
production.
Three months ended March 31,
2017 versus three months ended March
31, 2016 – EBITDA decreased $44
million versus the first quarter 2016. First quarter
2017 throughput increased by 16,000 barrels per day with planned
maintenance impacting both periods. Planned maintenance on the
fluid catalytic cracker reduced product yields and gasoline
production to outweigh the benefits of the higher throughput.
Technology Segment – Our Technology segment develops and
licenses chemical and polyolefin process technologies and
manufactures and sells polyolefin catalysts.
Table 6 -
Technology Financial Overview
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
December
31,
|
March
31,
|
|
Millions of
U.S. dollars
|
2017
|
2016
|
2016
|
|
Operating
income
|
$50
|
$51
|
$73
|
|
EBITDA
|
60
|
61
|
83
|
|
Three months ended March 31,
2017 versus three months ended December 31, 2016 – EBITDA decreased by
$1 million.
Three months ended March 31,
2017 versus three months ended March
31, 2016 – EBITDA decreased by $23 million due to the timing of licensing
revenue.
Capital Spending and Cash Balances
Capital
expenditures, including growth projects, maintenance turnarounds,
catalyst and information technology-related expenditures, were
$421 million during the first quarter
2017. Our cash and liquid investment balance was $2.2 billion at March 31,
2017. We repurchased 1.5 million ordinary shares
during the first quarter 2017. There were 403 million common shares
outstanding as of March 31,
2017. The company paid dividends of $343 million during the first quarter of
2017.
CONFERENCE CALL
LyondellBasell will host a conference
call April 28 at 11 a.m. EDT. Participants on the call will
include Chief Executive Officer Bob
Patel, Executive Vice President and Chief Financial Officer
Thomas Aebischer and Director of
Investor Relations David Kinney.
The toll-free dial-in number in the U.S. is 888-677-1826. A
complete listing of toll-free numbers by country is available at
www.lyb.com/teleconference for international callers. The pass code
for all numbers is 6934553.
The slides and webcast that accompany the call will be available
at http://www.lyb.com/earnings.
A replay of the call will be available from 2 p.m. EDT April 28
until May 28 at 11:59 p.m. EDT. The replay dial-in numbers
are 800-839-9140 (U.S.) and +1 203-369-3624 (international). The
pass code for each is 2526.
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)
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, 2016, 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.
INFORMATION RELATED TO FINANCIAL MEASURES
This release
makes reference to certain non-GAAP financial measures as defined
in Regulation G of the U.S. Securities Exchange Act of 1934, as
amended. The non-GAAP measures we have presented include
income from continuing operations excluding LCM, diluted earnings
per share excluding LCM, EBITDA and EBITDA excluding LCM. LCM
stands for lower of cost or market, which is an accounting rule
consistent with GAAP related to the valuation of inventory.
Our inventories are stated at the lower of cost or market.
Cost is determined using the LIFO inventory valuation methodology,
which means that the most recently incurred costs are charged to
cost of sales and inventories are valued at the earliest
acquisition costs. Market is determined based on an
assessment of the current estimated replacement cost and selling
price of the inventory. In periods where the market price of
our inventory declines substantially, cost values of inventory may
be higher than the market value, which results in us writing down
the value of inventory to market value in accordance with the LCM
rule, consistent with GAAP. This adjustment is related to our use
of LIFO accounting and the recent decline in pricing for many of
our raw material and finished goods inventories. 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 and earnings and EBITDA excluding LCM,
provide useful supplemental information to investors regarding the
underlying business trends and performance of the company's ongoing
operations and are useful for period-over-period comparisons of
such operations. 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 an alternative to operating
cash flows as a measure of our liquidity. We have also
presented financial information herein exclusive of adjustments for
LCM.
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.
Table 7 -
Reconciliation of Segment Information to Consolidated Financial
Information (a)
|
|
|
|
|
|
|
2016
|
|
2017
|
|
(Millions of U.S.
dollars)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
|
Q1
|
|
|
Sales and other
operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olefins &
Polyolefins - Americas
|
$
|
2,115
|
|
$
|
2,211
|
|
$
|
2,342
|
|
$
|
2,409
|
|
$
|
9,077
|
|
$
|
2,604
|
|
|
|
Olefins &
Polyolefins - EAI
|
|
2,578
|
|
|
2,721
|
|
|
2,634
|
|
|
2,646
|
|
|
10,579
|
|
|
3,024
|
|
|
|
Intermediates &
Derivatives
|
|
1,702
|
|
|
1,769
|
|
|
1,805
|
|
|
1,950
|
|
|
7,226
|
|
|
2,150
|
|
|
|
Refining
|
|
955
|
|
|
1,289
|
|
|
1,330
|
|
|
1,561
|
|
|
5,135
|
|
|
1,353
|
|
|
|
Technology
|
|
132
|
|
|
129
|
|
|
102
|
|
|
116
|
|
|
479
|
|
|
120
|
|
|
|
Other/elims
|
|
(739)
|
|
|
(791)
|
|
|
(848)
|
|
|
(935)
|
|
|
(3,313)
|
|
|
(821)
|
|
|
|
Continuing
Operations
|
$
|
6,743
|
|
$
|
7,328
|
|
$
|
7,365
|
|
$
|
7,747
|
|
$
|
29,183
|
|
$
|
8,430
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olefins &
Polyolefins - Americas
|
$
|
707
|
|
$
|
646
|
|
$
|
582
|
|
$
|
458
|
|
$
|
2,393
|
|
$
|
559
|
|
|
|
Olefins &
Polyolefins - EAI
|
|
358
|
|
|
423
|
|
|
447
|
|
|
266
|
|
|
1,494
|
|
|
401
|
|
|
|
Intermediates &
Derivatives
|
|
255
|
|
|
327
|
|
|
240
|
|
|
236
|
|
|
1,058
|
|
|
269
|
|
|
|
Refining
|
|
(30)
|
|
|
(53)
|
|
|
(56)
|
|
|
40
|
|
|
(99)
|
|
|
(70)
|
|
|
|
Technology
|
|
73
|
|
|
62
|
|
|
35
|
|
|
51
|
|
|
221
|
|
|
50
|
|
|
|
Other
|
|
(3)
|
|
|
(2)
|
|
|
1
|
|
|
(3)
|
|
|
(7)
|
|
|
1
|
|
|
|
Continuing
Operations
|
$
|
1,360
|
|
$
|
1,403
|
|
$
|
1,249
|
|
$
|
1,048
|
|
$
|
5,060
|
|
$
|
1,210
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olefins &
Polyolefins - Americas
|
$
|
90
|
|
$
|
88
|
|
$
|
87
|
|
$
|
97
|
|
$
|
362
|
|
$
|
118
|
|
|
|
Olefins &
Polyolefins - EAI
|
|
55
|
|
|
58
|
|
|
58
|
|
|
58
|
|
|
229
|
|
|
59
|
|
|
|
Intermediates &
Derivatives
|
|
70
|
|
|
69
|
|
|
62
|
|
|
68
|
|
|
269
|
|
|
69
|
|
|
|
Refining
|
|
43
|
|
|
40
|
|
|
40
|
|
|
40
|
|
|
163
|
|
|
40
|
|
|
|
Technology
|
|
10
|
|
|
11
|
|
|
10
|
|
|
10
|
|
|
41
|
|
|
10
|
|
|
|
Continuing
Operations
|
$
|
268
|
|
$
|
266
|
|
$
|
257
|
|
$
|
273
|
|
$
|
1,064
|
|
$
|
296
|
|
|
EBITDA:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olefins &
Polyolefins - Americas
|
$
|
878
|
|
$
|
754
|
|
$
|
682
|
|
$
|
563
|
|
$
|
2,877
|
|
$
|
723
|
|
|
|
Olefins &
Polyolefins - EAI
|
|
509
|
|
|
576
|
|
|
584
|
|
|
398
|
|
|
2,067
|
|
|
529
|
|
|
|
Intermediates &
Derivatives
|
|
326
|
|
|
397
|
|
|
304
|
|
|
306
|
|
|
1,333
|
|
|
339
|
|
|
|
Refining
|
|
14
|
|
|
(13)
|
|
|
(10)
|
|
|
81
|
|
|
72
|
|
|
(30)
|
|
|
|
Technology
|
|
83
|
|
|
73
|
|
|
45
|
|
|
61
|
|
|
262
|
|
|
60
|
|
|
|
Other
|
|
(3)
|
|
|
(4)
|
|
|
1
|
|
|
(3)
|
|
|
(9)
|
|
|
(4)
|
|
|
|
Continuing
Operations
|
$
|
1,807
|
|
$
|
1,783
|
|
$
|
1,606
|
|
$
|
1,406
|
|
$
|
6,602
|
|
$
|
1,617
|
|
|
Capital,
turnarounds and IT deferred spending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olefins &
Polyolefins - Americas
|
$
|
303
|
|
$
|
339
|
|
$
|
384
|
|
$
|
350
|
|
$
|
1,376
|
|
$
|
202
|
|
|
|
Olefins &
Polyolefins - EAI
|
|
81
|
|
|
60
|
|
|
48
|
|
|
72
|
|
|
261
|
|
|
47
|
|
|
|
Intermediates &
Derivatives
|
|
76
|
|
|
80
|
|
|
90
|
|
|
87
|
|
|
333
|
|
|
77
|
|
|
|
Refining
|
|
57
|
|
|
71
|
|
|
51
|
|
|
45
|
|
|
224
|
|
|
84
|
|
|
|
Technology
|
|
6
|
|
|
9
|
|
|
9
|
|
|
12
|
|
|
36
|
|
|
7
|
|
|
|
Other
|
|
4
|
|
|
4
|
|
|
4
|
|
|
1
|
|
|
13
|
|
|
4
|
|
|
|
Continuing
Operations
|
$
|
527
|
|
$
|
563
|
|
$
|
586
|
|
$
|
567
|
|
$
|
2,243
|
|
$
|
421
|
|
|
|
|
(a)
|
EBITDA for the first
quarter of 2016 includes a pre-tax LCM charge of $68 million and a
$78 million pre-tax gain on the sale of our wholly owned
Argentine subsidiary. Second quarter 2016 EBITDA includes a
pre-tax LCM benefit of $68 million for the reversal of the first
quarter 2016 LCM adjustment due to price recoveries during the
period. Fourth quarter 2016 EBITDA also includes a pre-tax LCM
charge of $29 million. See Tables 2 through 6 for LCM
adjustments recorded for each segment.
|
(b)
|
See Table 8 for
EBITDA calculation.
|
Table 8 - EBITDA
Calculation
|
|
|
|
|
|
|
2016
|
|
2017
|
|
(Millions of U.S.
dollars)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income(a)
|
$
|
1,030
|
|
$
|
1,091
|
|
$
|
953
|
|
$
|
763
|
|
$
|
3,837
|
|
$
|
797
|
|
|
Loss from
discontinued operations, net of tax
|
|
- -
|
|
|
1
|
|
|
2
|
|
|
7
|
|
|
10
|
|
|
8
|
|
|
Income from
continuing operations(a)
|
|
1,030
|
|
|
1,092
|
|
|
955
|
|
|
770
|
|
|
3,847
|
|
|
805
|
|
|
Provision
for income taxes
|
|
432
|
|
|
346
|
|
|
326
|
|
|
282
|
|
|
1,386
|
|
|
315
|
|
|
Depreciation and amortization
|
|
268
|
|
|
266
|
|
|
257
|
|
|
273
|
|
|
1,064
|
|
|
296
|
|
|
Interest
expense, net(b)
|
|
77
|
|
|
79
|
|
|
68
|
|
|
81
|
|
|
305
|
|
|
201
|
|
|
EBITDA(c)
|
$
|
1,807
|
|
$
|
1,783
|
|
$
|
1,606
|
|
$
|
1,406
|
|
$
|
6,602
|
|
$
|
1,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The first quarter of
2016 includes an after-tax LCM charge of $47 million and a $78
million after-tax gain related to the sale of our wholly owned
Argentine subsidiary. The
second quarter of 2016 includes an after-tax benefit of $47 million
for the reversal of the first quarter 2016 LCM adjustment due to
price recoveries during the
period. Fourth quarter 2016 also includes an $18 million after-tax
LCM charge.
|
(b)
|
Includes pre-tax
charges totalling $113 million related to the repayment of $1,000
million aggregate principal amount of our outstanding 5% senior
notes due 2019.
|
(c)
|
The first quarter of
2016 includes a pre-tax LCM charge of $68 million and a pre-tax
gain of $78 million on the sale of our wholly owned Argentine
subsidiary. Second quarter 2016
EBITDA includes a pre-tax LCM benefit of $68 million for the
reversal of the first quarter 2016 LCM adjustment. Fourth quarter
2016 also includes a pre-tax LCM
charge of $29 million.
|
Table 9 - Selected
Segment Operating Information
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
|
Q1
|
|
|
Olefins and
Polyolefins - Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (million
pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ethylene
produced
|
|
2,392
|
|
1,899
|
|
1,939
|
|
2,173
|
|
8,403
|
|
2,486
|
|
|
|
|
Propylene
produced
|
|
832
|
|
748
|
|
575
|
|
660
|
|
2,815
|
|
597
|
|
|
|
|
Polyethylene
sold
|
|
1,554
|
|
1,426
|
|
1,517
|
|
1,485
|
|
5,982
|
|
1,533
|
|
|
|
|
Polypropylene
sold
|
|
612
|
|
582
|
|
659
|
|
623
|
|
2,476
|
|
644
|
|
|
|
Benchmark Market
Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Texas
Intermediate crude oil (USD per barrel)
|
|
33.63
|
|
46.01
|
|
44.94
|
|
49.29
|
|
43.56
|
|
51.78
|
|
|
|
|
Light Louisiana Sweet
("LLS") crude oil (USD per barrel)
|
|
35.34
|
|
47.39
|
|
46.52
|
|
50.60
|
|
45.03
|
|
53.39
|
|
|
|
|
Houston Ship Channel
natural gas (USD per million BTUs)
|
|
1.93
|
|
2.06
|
|
2.79
|
|
3.01
|
|
2.45
|
|
2.96
|
|
|
|
|
U.S. weighted average
cost of ethylene production (cents/pound)
|
|
9.8
|
|
12.0
|
|
10.6
|
|
14.3
|
|
11.7
|
|
11.8
|
|
|
|
|
U.S. ethylene
(cents/pound)
|
|
26.7
|
|
30.3
|
|
33.0
|
|
32.7
|
|
30.7
|
|
33.1
|
|
|
|
|
U.S. polyethylene
[high density] (cents/pound)
|
|
52.3
|
|
59.0
|
|
60.7
|
|
58.3
|
|
57.6
|
|
57.3
|
|
|
|
|
U.S. propylene
(cents/pound)
|
|
31.0
|
|
32.7
|
|
37.8
|
|
36.2
|
|
34.4
|
|
47.2
|
|
|
|
|
U.S. polypropylene
[homopolymer] (cents/pound)
|
|
67.8
|
|
61.7
|
|
60.2
|
|
55.8
|
|
61.4
|
|
66.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olefins and
Polyolefins - Europe, Asia, International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (million
pounds)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ethylene
produced
|
|
950
|
|
941
|
|
1,066
|
|
946
|
|
3,903
|
|
1,022
|
|
|
|
|
Propylene
produced
|
|
555
|
|
577
|
|
649
|
|
563
|
|
2,344
|
|
598
|
|
|
|
|
Polyethylene
sold
|
|
1,434
|
|
1,386
|
|
1,315
|
|
1,330
|
|
5,465
|
|
1,421
|
|
|
|
|
Polypropylene
sold
|
|
1,773
|
|
1,617
|
|
1,509
|
|
1,582
|
|
6,481
|
|
1,714
|
|
|
|
Benchmark Market
Prices (€0.01 per pound)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Europe
weighted average cost of ethylene production
|
|
16.3
|
|
21.2
|
|
17.9
|
|
23.8
|
|
19.8
|
|
22.7
|
|
|
|
|
Western Europe
ethylene
|
|
38.4
|
|
41.1
|
|
42.3
|
|
43.1
|
|
41.2
|
|
46.2
|
|
|
|
|
Western Europe
polyethylene [high density]
|
|
55.4
|
|
57.6
|
|
55.7
|
|
55.2
|
|
56.0
|
|
58.2
|
|
|
|
|
Western Europe
propylene
|
|
26.3
|
|
28.8
|
|
30.7
|
|
33.3
|
|
29.8
|
|
37.0
|
|
|
|
|
Western Europe
polypropylene [homopolymer]
|
|
46.5
|
|
49.5
|
|
49.5
|
|
51.7
|
|
49.3
|
|
56.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intermediates and
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (million
pounds unless otherwise indicated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Propylene oxide and
derivatives
|
|
793
|
|
743
|
|
752
|
|
749
|
|
3,037
|
|
786
|
|
|
|
|
Intermediate
Chemicals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ethylene oxide and
derivatives
|
|
301
|
|
233
|
|
224
|
|
329
|
|
1,087
|
|
292
|
|
|
|
|
|
Styrene
monomer
|
|
917
|
|
933
|
|
911
|
|
933
|
|
3,694
|
|
992
|
|
|
|
|
|
Acetyls
|
|
702
|
|
821
|
|
751
|
|
776
|
|
3,050
|
|
825
|
|
|
|
|
Oxyfuels and Related
Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TBA
Intermediates
|
|
415
|
|
391
|
|
410
|
|
361
|
|
1,577
|
|
383
|
|
|
|
|
|
MTBE/ETBE (million
gallons)
|
|
270
|
|
278
|
|
298
|
|
264
|
|
1,110
|
|
239
|
|
|
|
Benchmark Market
Margins (cents per gallon)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MTBE - Northwest
Europe
|
|
44.4
|
|
78.7
|
|
55.3
|
|
50.6
|
|
57.2
|
|
49.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volumes (thousands
of barrels per day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heavy crude oil
processing rate
|
|
186
|
|
183
|
|
209
|
|
228
|
|
201
|
|
202
|
|
|
|
Benchmark Market
Margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Light crude oil -
2-1-1
|
|
8.67
|
|
11.52
|
|
11.46
|
|
11.20
|
|
10.73
|
|
11.86
|
|
|
|
|
Light crude oil -
Maya differential
|
|
9.19
|
|
9.55
|
|
7.52
|
|
7.80
|
|
8.51
|
|
8.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: LYB and
third party consultants
|
Note: Benchmark
market prices for U.S. and Western Europe polyethylene and
polypropylene reflect discounted prices. Volumes presented
represent third party sales of selected key products.
|
Table 10 -
Unaudited Income Statement Information
|
|
|
|
|
|
|
2016
|
|
2017
|
|
(Millions of U.S.
dollars)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other
operating revenues
|
$
|
6,743
|
|
$
|
7,328
|
|
$
|
7,365
|
|
$
|
7,747
|
|
$
|
29,183
|
|
$
|
8,430
|
|
|
Cost of
sales(a)
|
|
5,166
|
|
|
5,702
|
|
|
5,903
|
|
|
6,420
|
|
|
23,191
|
|
|
6,991
|
|
|
Selling, general and
administrative expenses
|
|
193
|
|
|
199
|
|
|
188
|
|
|
253
|
|
|
833
|
|
|
204
|
|
|
Research and
development expenses
|
|
24
|
|
|
24
|
|
|
25
|
|
|
26
|
|
|
99
|
|
|
25
|
|
|
Operating
income(a)
|
|
1,360
|
|
|
1,403
|
|
|
1,249
|
|
|
1,048
|
|
|
5,060
|
|
|
1,210
|
|
|
Income from equity
investments
|
|
91
|
|
|
117
|
|
|
81
|
|
|
78
|
|
|
367
|
|
|
81
|
|
|
Interest expense,
net(b)
|
|
(77)
|
|
|
(79)
|
|
|
(68)
|
|
|
(81)
|
|
|
(305)
|
|
|
(201)
|
|
|
Other income
(expense), net(c)
|
|
88
|
|
|
(3)
|
|
|
19
|
|
|
7
|
|
|
111
|
|
|
30
|
|
|
Income from continuing
operations before income taxes(a) (b)
(c)
|
|
1,462
|
|
|
1,438
|
|
|
1,281
|
|
|
1,052
|
|
|
5,233
|
|
|
1,120
|
|
|
Provision for income
taxes
|
|
432
|
|
|
346
|
|
|
326
|
|
|
282
|
|
|
1,386
|
|
|
315
|
|
|
Income from continuing
operations(d)
|
|
1,030
|
|
|
1,092
|
|
|
955
|
|
|
770
|
|
|
3,847
|
|
|
805
|
|
|
Loss from
discontinued operations, net of tax
|
|
- -
|
|
|
(1)
|
|
|
(2)
|
|
|
(7)
|
|
|
(10)
|
|
|
(8)
|
|
|
Net
income(d)
|
|
1,030
|
|
|
1,091
|
|
|
953
|
|
|
763
|
|
|
3,837
|
|
|
797
|
|
|
Income attributable
to non-controlling interests
|
|
- -
|
|
|
- -
|
|
|
(1)
|
|
|
- -
|
|
|
(1)
|
|
|
- -
|
|
|
Net
income attributable to the Company
shareholders(d)
|
$
|
1,030
|
|
$
|
1,091
|
|
$
|
952
|
|
$
|
763
|
|
$
|
3,836
|
|
$
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Amounts presented
herein include pre-tax LCM charges of $68 million and $29 million
in the first and fourth quarters of 2016, respectively. A pre-tax
benefit of $68 million in the second quarter of 2016 reflects the
reversal of the first quarter 2016 LCM adjustment due to price
recoveries during the period.
|
(b)
|
Includes pre-tax
charges totalling $113 million related to the repayment of $1,000
million aggregate principal amount of our outstanding 5% senior
notes due 2019.
|
(c)
|
Includes a pre-tax
gain of $31 million in the first quarter of 2017 on the sale of our
Lake Charles, Louisiana site currently used as a logistics terminal
and a $78 million gain in the first quarter of 2016 on the sale of
our wholly owned Argentine subsidiary.
|
(d)
|
Amounts presented
herein include after-tax LCM charges of $47 million and $18 million
in the first and fourth quarters of 2016, respectively. The second
quarter of 2016 includes an after
tax benefit of $47 million for the partial reversal of the first
quarter 2016 LCM adjustment resulting from price recoveries during
the period. The first quarter of
2016 also includes a $78 million gain on the sale of our wholly
owned Argentine subsidiary. The first quarter of 2017 includes
after-tax charges totalling $106
million related to the repayment of $1,000 million aggregate
principal amount of our outstanding 5% senior notes due
2019.
|
Table 11 - Charges
(Benefits) Included in Income from Continuing
Operations
|
|
|
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual
|
|
|
|
|
Millions of U.S.
dollars (except share data)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Impact
|
|
Q1
|
|
Pretax charges
(benefits):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charges and premiums
related to repayment of debt
|
$
|
- -
|
|
$
|
- -
|
|
$
|
- -
|
|
$
|
- -
|
|
$
|
- -
|
|
$
|
113
|
|
Out of period tax
adjustment
|
|
- -
|
|
|
- -
|
|
|
- -
|
|
|
61
|
|
|
74
|
|
|
- -
|
|
Gain on sale of wholly
owned subsidiary
|
|
(78)
|
|
|
- -
|
|
|
- -
|
|
|
- -
|
|
|
(78)
|
|
|
- -
|
|
Lower of cost or market
inventory adjustment
|
|
68
|
|
|
(68)
|
|
|
- -
|
|
|
29
|
|
|
29
|
|
|
- -
|
|
Pension settlement
charge
|
|
- -
|
|
|
- -
|
|
|
- -
|
|
|
58
|
|
|
58
|
|
|
- -
|
|
Total pretax charges
(benefits)
|
|
(10)
|
|
|
(68)
|
|
|
- -
|
|
|
148
|
|
|
83
|
|
|
113
|
|
Provision for
(benefit from) income tax related to these items
|
|
(21)
|
|
|
21
|
|
|
- -
|
|
|
(32)
|
|
|
(32)
|
|
|
(7)
|
|
After-tax effect of
net charges (benefits)
|
$
|
(31)
|
|
$
|
(47)
|
|
$
|
- -
|
|
$
|
116
|
|
$
|
51
|
|
$
|
106
|
|
Effect on diluted
earnings per share
|
$
|
0.07
|
|
$
|
0.11
|
|
$
|
- -
|
|
$
|
(0.29)
|
|
$
|
(0.12)
|
|
$
|
(0.26)
|
|
|
|
Table 12 -
Unaudited Cash Flow Information
|
|
|
|
|
|
|
2016
|
|
2017
|
|
(Millions of U.S.
dollars)
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
|
Q1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
1,300
|
|
$
|
1,261
|
|
$
|
1,332
|
|
$
|
1,713
|
|
$
|
5,606
|
|
$
|
613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(597)
|
|
|
(471)
|
|
|
(459)
|
|
|
(770)
|
|
|
(2,297)
|
|
|
(539)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(333)
|
|
|
(1,039)
|
|
|
(1,195)
|
|
|
(782)
|
|
|
(3,349)
|
|
|
(472)
|
|
|
Table 13 -
Unaudited Balance Sheet Information
|
|
|
|
|
|
|
|
|
March
31,
|
|
June
30,
|
|
September
30,
|
|
December
31,
|
|
March
31,
|
|
|
(Millions of U.S.
dollars)
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,318
|
|
$
|
1,060
|
|
$
|
740
|
|
$
|
875
|
|
$
|
485
|
|
|
Restricted
cash
|
|
4
|
|
|
4
|
|
|
4
|
|
|
3
|
|
|
1
|
|
|
Short-term
investments
|
|
1,332
|
|
|
1,023
|
|
|
1,090
|
|
|
1,147
|
|
|
1,176
|
|
|
Accounts receivable,
net
|
|
2,683
|
|
|
2,806
|
|
|
2,852
|
|
|
2,842
|
|
|
3,292
|
|
|
Inventories
|
|
3,978
|
|
|
4,009
|
|
|
4,015
|
|
|
3,809
|
|
|
3,875
|
|
|
Prepaid expenses and
other current assets
|
|
1,009
|
|
|
1,081
|
|
|
852
|
|
|
923
|
|
|
852
|
|
|
|
Total current
assets
|
|
10,324
|
|
|
9,983
|
|
|
9,553
|
|
|
9,599
|
|
|
9,681
|
|
|
Property, plant and
equipment, net
|
|
9,373
|
|
|
9,681
|
|
|
10,057
|
|
|
10,137
|
|
|
10,361
|
|
|
Investments and
long-term receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in PO
joint ventures
|
|
398
|
|
|
390
|
|
|
399
|
|
|
415
|
|
|
409
|
|
|
|
Equity
investments
|
|
1,734
|
|
|
1,610
|
|
|
1,681
|
|
|
1,575
|
|
|
1,672
|
|
|
|
Other investments and
long-term receivables
|
|
18
|
|
|
18
|
|
|
17
|
|
|
20
|
|
|
20
|
|
|
Goodwill
|
|
548
|
|
|
542
|
|
|
543
|
|
|
528
|
|
|
531
|
|
|
Intangible assets,
net
|
|
618
|
|
|
588
|
|
|
562
|
|
|
550
|
|
|
517
|
|
|
Other
assets
|
|
559
|
|
|
623
|
|
|
607
|
|
|
618
|
|
|
577
|
|
|
|
Total
assets
|
$
|
23,572
|
|
$
|
23,435
|
|
$
|
23,419
|
|
$
|
23,442
|
|
$
|
23,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of
long-term debt
|
$
|
4
|
|
$
|
4
|
|
$
|
3
|
|
$
|
2
|
|
$
|
2
|
|
|
Short-term
debt
|
|
594
|
|
|
616
|
|
|
621
|
|
|
594
|
|
|
611
|
|
|
Accounts
payable
|
|
2,243
|
|
|
2,357
|
|
|
2,329
|
|
|
2,529
|
|
|
2,627
|
|
|
Accrued
liabilities
|
|
1,600
|
|
|
1,374
|
|
|
1,357
|
|
|
1,415
|
|
|
1,139
|
|
|
|
Total current
liabilities
|
|
4,441
|
|
|
4,351
|
|
|
4,310
|
|
|
4,540
|
|
|
4,379
|
|
|
Long-term
debt
|
|
8,504
|
|
|
8,485
|
|
|
8,464
|
|
|
8,385
|
|
|
8,419
|
|
|
Other
liabilities
|
|
2,125
|
|
|
2,143
|
|
|
2,151
|
|
|
2,113
|
|
|
2,130
|
|
|
Deferred income
taxes
|
|
2,134
|
|
|
2,149
|
|
|
2,387
|
|
|
2,331
|
|
|
2,353
|
|
|
Stockholders'
equity
|
|
6,344
|
|
|
6,283
|
|
|
6,082
|
|
|
6,048
|
|
|
6,462
|
|
|
Non-controlling
interests
|
|
24
|
|
|
24
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
23,572
|
|
$
|
23,435
|
|
$
|
23,419
|
|
$
|
23,442
|
|
$
|
23,768
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lyondellbasell-reports-first-quarter-2017-earnings-300447925.html
SOURCE LyondellBasell Industries