LyondellBasell Reports Record Quarterly Results

Jul 28, 2015

HOUSTON and LONDON, July 28, 2015 /PRNewswire/ --

Second Quarter 2015 Highlights

  • Record income from continuing operations: $1.33 billion ($1.32 billion excluding LCM1)
  • Record diluted earnings per share: $2.81 per share ($2.79 per share excluding LCM)
  • Record EBITDA: $2.19 billion ($2.18 billion excluding LCM)
  • Fourth consecutive quarter of EBITDA in excess of $2 billion
  • Completed share repurchases under our prior authorization and received approval for a third 10 percent authorization. Repurchased 7.9 million shares, or approximately 1.7 percent of the shares outstanding during the quarter.
  • Increased the interim quarterly dividend by 11 percent to 78 cents per share

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the second quarter 2015 of $1.33  billion, or $2.81 diluted earnings per share.  Second quarter 2015 EBITDA was approximately $2.19 billion.   

Comparisons with the prior quarter and second quarter 2014 are available in the following table:

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)

2015

2015

2014

2015

2014

 

Sales and other operating revenues

$9,145

$8,185

$12,117

$17,330

$23,252

 

Net income(a)

1,329

1,164

1,176

2,493

2,120

 

Income from continuing operations(b)

1,326

1,167

1,173

2,493

2,116

 

Diluted earnings per share (U.S. dollars):

           
 

Net income(c)

2.82

2.41

2.23

5.22

3.94

 
 

Income from continuing operations(b)

2.81

2.42

2.22

5.22

3.93

 

Diluted share count (millions)

472

481

527

477

537

 

EBITDA(d)

2,186

1,952

1,941

4,138

3,609

 
               

Excluding LCM Impact:

           

LCM charges (benefits), pre-tax

(9)

92

- -

83

- -

 

Income from continuing operations(b)

1,320

1,225

1,173

2,545

2,116

 

Diluted earnings per share (U.S. dollars):

           
 

Income from continuing operations(b)

2.79

2.54

2.22

5.33

3.93

 

EBITDA(d)

2,177

2,044

1,941

4,221

3,609

 

(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.

 

_______________________________

1

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."  

The second quarter included a $9 million non-cash, pre-tax credit for the impact of a lower of cost or market (LCM) inventory adjustment ($6 million after tax), which for certain segments represented a reversal of some or all of the LCM adjustment charged in the first quarter of 2015.  Excluding the LCM adjustment, earnings from continuing operations during the first quarter totaled $1.3 billion, or $2.79 per share, and EBITDA was $2.2 billion.

"Continued high operating reliability allowed us to take advantage of a favorable second quarter environment.  We again delivered strong results across all segments, achieving record quarterly diluted earnings per share and EBITDA.  Earnings per share during the last 12 months exceeded $10 per share.  Abundant natural gas and NGL supply coupled with strong pricing during the quarter continued to benefit our margins in the Olefins and Polyolefins and Intermediates and Derivatives segments.  Planned and unplanned industry downtime created favorable global conditions, demonstrating that the industry is operating with a fundamentally tight supply and demand balance," said Bob Patel, LyondellBasell Chief Executive Officer.   

OUTLOOK
"The outlook for the third quarter remains positive for our portfolio.  Natural gas and NGL remain well supplied and favorably priced.  Significant global olefin and polyolefin supply shortages are starting to rebalance as supply returns to the market, but balances have remained favorable through July.  Late in the third quarter, we will begin planned outages at two of our Intermediate and Derivatives production sites and at one European olefins plant," 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, International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

Comments and analysis represent underlying business activity and are exclusive of LCM inventory adjustments.

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

2015

2015

2014

2015

2014

 

Operating income

$920

$934

$898

$1,854

$1,554

 

EBITDA

1,014

1,031

978

2,045

1,714

 

LCM charges (benefits), pre-tax

(21)

43

- -

22

- -

 

EBITDA excluding LCM adjustments

993

1,074

978

2,067

1,714

 
               

Three months ended June 30, 2015 versus three months ended March 31, 2015 – EBITDA decreased versus the first quarter of 2015 by $81 million, excluding a $64 million quarter to quarter variance as a result of the LCM inventory adjustments.  Olefins results decreased by approximately $105 million primarily due to a higher cost of ethylene production from reduced co-product contribution and increased heavy liquid raw material costs.  Polyolefin results improved by approximately $25 million principally due to higher sales volume.  Joint venture equity income increased by $1 million.

Three months ended June 30, 2015 versus three months ended June 30, 2014 – EBITDA increased by $15 million versus the second quarter 2014, excluding a $21 million quarter to quarter variance as a result of the LCM inventory adjustment credit. Olefins results decreased by $75 million primarily due to lower margins as a result of lower product prices.  The price of ethylene decreased by approximately 13 cents per pound.  This negative impact was partially offset by higher volume as 2014 results were impacted by the La Porte ethylene plant turnaround.   Polyolefin results improved by approximately $85 million due to volume that was higher by 8 percent and from higher polyethylene and polypropylene margins.  The polypropylene spread over propylene improved by approximately 5 cents per pound.  Joint venture equity income increased by $2 million.

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, polypropylene compounds (global), 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

2015

2015

2014

2015

2014

 

Operating income

$359

$236

$190

$595

$415

 

EBITDA

492

357

319

849

675

 

LCM charges (benefits), pre-tax

- -

- -

- -

- -

- -

 

EBITDA excluding LCM adjustments

492

357

319

849

675

 
               

Three months ended June 30, 2015 versus three months ended March 31, 2015 – EBITDA increased by $135 million versus the first quarter 2015.  Olefins results increased by $80 million primarily due to a higher ethylene price which improved by approximately 7 cents per pound.   Combined polyolefin results increased by approximately $65 million.  Tight supply in polyethylene and polypropylene drove higher spreads.  Polyethylene volume decreased by approximately 11 percent and polypropylene volume decreased by approximately 16 percent.  Combined polypropylene compounds and polybutene-1 results decreased by approximately $15 million primarily as a result of higher polypropylene raw material costs.  Equity income increased by $22 million, as margins in several of the polyolefins joint ventures had similar improvement as our European businesses.

Three months ended June 30, 2015 versus three months ended June 30, 2014 – EBITDA increased by $173 million versus the second quarter 2014.  Olefin results increased by approximately $70 million primarily due to higher ethylene margins.  Combined polyolefin results increased by approximately $105 million.  Spreads in polyethylene and polypropylene increased by approximately 6 and 2 cents per pound, respectively.  Combined polypropylene compounds and polybutene-1 results decreased by approximately $10 million as a result of higher polypropylene raw material costs.  Equity income increased by $16 million.

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 (including methanol), ethanol, oxyfuels, and ethylene oxide and its derivatives. 

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

2015

2015

2014

2015

2014

 

Operating income

$405

$271

$375

$676

$691

 

EBITDA

466

337

430

803

805

 

LCM charges, pre-tax

17

44

- -

61

- -

 

EBITDA excluding LCM adjustments

483

381

430

864

805

 
             

Three months ended June 30, 2015 versus three months ended March 31, 2015 – EBITDA increased by $102 million versus the first quarter 2015, excluding a $27 million quarter to quarter variance as a result of the LCM inventory adjustments.  Propylene oxide and derivative results decreased by approximately $20 million primarily due to lower volumes.  The first quarter benefitted from industry outages and seasonally strong aircraft deicer demand.  Intermediate chemical results increased by $55 million due to strength in styrene margins and higher methanol volume following first quarter maintenance at the Channelview plant.  Oxyfuels results improved by approximately $65 million due to higher seasonal margins and volume.  Equity income decreased by $2 million.

Three months ended June 30, 2015 versus three months ended June 30, 2014 – EBITDA increased by $53 million versus the second quarter 2014, excluding a $17 million quarter to quarter variance as a result of the LCM inventory adjustment.  Propylene oxide and derivative results were relatively unchanged.  Intermediate chemical results improved by approximately $45 million primarily from the strength in styrene margins.  Oxyfuels results were relatively unchanged.  Equity income increased by $4 million.

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

2015

2015

2014

2015

2014

 

Operating income

$119

$74

$95

$193

$181

 

EBITDA

159

149

137

308

266

 

LCM charges (benefits), pre-tax

(5)

5

- -

- -

- -

 

EBITDA excluding LCM adjustments

154

154

137

308

266

 
             

Three months ended June 30, 2015 versus three months ended March 31, 2015 – EBITDA was unchanged versus the first quarter 2015, excluding a $10 million quarter to quarter variance as a result of the LCM inventory adjustments. Crude oil throughput increased by 14,000 barrels per day.  The Maya 2-1-1 industry benchmark spread increased by approximately $0.25 per barrel, averaging $23.98 per barrel.  Secondary product price spreads offset some of this improvement as they decreased with higher crude oil prices.  The cost of RIN's was lower by $4 million.

Three months ended June 30, 2015 versus three months ended June 30, 2014 – Versus the second quarter of 2014, EBITDA increased by $17 million, excluding a $5 million quarter to quarter variance as a result of the LCM inventory adjustment credit.  Crude oil throughput decreased by 2,000 barrels per day to 255,000 barrels per day.  The Maya 2-1-1 spread decreased by approximately $3.00 per barrel.  The corresponding Houston refinery spread was relatively unchanged.  During the second quarter of 2015, secondary product margins improved due to the decline in crude oil. The cost of RIN's was relatively unchanged.

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

2015

2015

2014

2015

2014

 

Operating income

$45

$64

$56

$109

$116

 

EBITDA

57

76

71

133

147

 
               

Three months ended June 30, 2015 versus three months ended March 31, 2015 – EBITDA decreased by $19 million on lower catalyst volume and reduced licensing income.   

Three months ended June 30, 2015 versus three months ended June 30, 2014 – EBITDA decreased by $14 million due to lower catalyst and licensing results.

Capital Spending and Cash Balances
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $278 million during the second quarter 2015. Our cash and liquid investments balance was $3.8 billion at June 30, 2015. We repurchased 7.9 million of our shares outstanding during the second quarter of 2015.  There were 468 million common shares outstanding as of June 30, 2015. The company paid dividends of $368 million during the second quarter of 2015.

CONFERENCE CALL
LyondellBasell will host a conference call July 28 at 11 a.m. ET.  Participants on the call will include Chief Executive Officer Bob Patel, 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. 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 4843334.

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 1 p.m. ET July 28, until 1 p.m. EST August 28, 2015. The replay dial-in numbers are 888-568-0061 (U.S.) and +1 203-369-3454 (international). The pass code for each is 62324.

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, 2014, 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 last-in, first-out ("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 somewhat unique to our 2010 company formation when all assets and liabilities were measured at fair value, our use of LIFO accounting, and the recent volatility 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)

                                                       
         

2014

 

2015

 

(Millions of U.S. dollars)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

YTD

 

Sales and other operating revenues:

                                             
   

Olefins & Polyolefins - Americas

$

3,357

 

$

3,462

 

$

3,750

 

$

3,379

 

$

13,948

 

$

2,551

 

$

2,679

 

$

5,230

   

Olefins & Polyolefins - EAI

 

3,778

   

4,069

   

3,995

   

3,361

   

15,203

   

2,911

   

3,061

   

5,972

   

Intermediates & Derivatives

 

2,429

   

2,706

   

2,691

   

2,304

   

10,130

   

1,918

   

2,159

   

4,077

   

Refining

 

2,756

   

3,250

   

3,146

   

2,558

   

11,710

   

1,607

   

2,102

   

3,709

   

Technology

 

136

   

144

   

107

   

110

   

497

   

136

   

107

   

243

   

Other/elims

 

(1,321)

   

(1,514)

   

(1,623)

   

(1,422)

   

(5,880)

   

(938)

   

(963)

   

(1,901)

     

Continuing Operations

$

11,135

 

$

12,117

 

$

12,066

 

$

10,290

 

$

45,608

 

$

8,185

 

$

9,145

 

$

17,330

 

Operating income (loss):

                                             
   

Olefins & Polyolefins - Americas

$

656

 

$

898

 

$

1,068

 

$

950

 

$

3,572

 

$

934

 

$

920

 

$

1,854

   

Olefins & Polyolefins - EAI

 

225

   

190

   

223

   

246

   

884

   

236

   

359

   

595

   

Intermediates & Derivatives

 

316

   

375

   

321

   

208

   

1,220

   

271

   

405

   

676

   

Refining

 

86

   

95

   

67

   

(354)

   

(106)

   

74

   

119

   

193

   

Technology

 

60

   

56

   

26

   

29

   

171

   

64

   

45

   

109

   

Other

 

(3)

   

(1)

   

1

   

(2)

   

(5)

   

(4)

   

(3)

   

(7)

     

Continuing Operations

$

1,340

 

$

1,613

 

$

1,706

 

$

1,077

 

$

5,736

 

$

1,575

 

$

1,845

 

$

3,420

 

Depreciation and amortization:

                                             
   

Olefins & Polyolefins - Americas

$

73

 

$

74

 

$

84

 

$

85

 

$

316

 

$

86

 

$

85

 

$

171

   

Olefins & Polyolefins - EAI

 

70

   

67

   

65

   

46

   

248

   

55

   

54

   

109

   

Intermediates & Derivatives

 

55

   

56

   

55

   

59

   

225

   

60

   

56

   

116

   

Refining

 

42

   

42

   

42

   

43

   

169

   

74

   

40

   

114

   

Technology

 

16

   

15

   

16

   

14

   

61

   

12

   

12

   

24

     

Continuing Operations

$

256

 

$

254

 

$

262

 

$

247

 

$

1,019

 

$

287

 

$

247

 

$

534

 

EBITDA: (b)

                                             
   

Olefins & Polyolefins - Americas

$

736

 

$

978

 

$

1,157

 

$

1,040

 

$

3,911

 

$

1,031

 

$

1,014

 

$

2,045

   

Olefins & Polyolefins - EAI

 

356

   

319

   

343

   

348

   

1,366

   

357

   

492

   

849

   

Intermediates & Derivatives

 

375

   

430

   

383

   

271

   

1,459

   

337

   

466

   

803

   

Refining

 

129

   

137

   

110

   

(311)

   

65

   

149

   

159

   

308

   

Technology

 

76

   

71

   

41

   

44

   

232

   

76

   

57

   

133

   

Other

 

(4)

   

6

   

1

   

14

   

17

   

2

   

(2)

   

- -

     

Continuing Operations

$

1,668

 

$

1,941

 

$

2,035

 

$

1,406

 

$

7,050

 

$

1,952

 

$

2,186

 

$

4,138

 

Capital, turnarounds and IT deferred spending:

                                             
   

Olefins & Polyolefins - Americas

$

231

 

$

306

 

$

208

 

$

167

 

$

912

 

$

149

 

$

140

 

$

289

   

Olefins & Polyolefins - EAI

 

33

   

27

   

45

   

86

   

191

   

38

   

27

   

65

   

Intermediates & Derivatives

 

45

   

52

   

50

   

94

   

241

   

76

   

76

   

152

   

Refining

 

32

   

20

   

27

   

44

   

123

   

33

   

28

   

61

   

Technology

 

2

   

6

   

6

   

11

   

25

   

6

   

3

   

9

   

Other

 

- -

   

4

   

2

   

1

   

7

   

4

   

4

   

8

     

Continuing Operations

$

343

 

$

415

 

$

338

 

$

403

 

$

1,499

 

$

306

 

$

278

 

$

584

                                                       
   

(a)

EBITDA as presented herein includes the impacts of pre-tax LCM charges of $45 million in the third quarter of 2014, $715 million in the fourth quarter of 2014 and $92 million in the first quarter of 2015. EBITDA for the second quarter of 2015 includes a pre-tax LCM benefit of $9 million for the partial reversal of the first quarter 2015 LCM adjustment. See Tables 2 through 6 for LCM adjustments recorded for each segment.

(b)

See Table 8 for EBITDA calculation.

 

 

Table 8 - EBITDA Calculation

                                                 
   

2014

 

2015

 

(Millions of U.S. dollars)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

YTD

                                                 
 

Net income attributable to the Company shareholders(a)

$

945

 

$

1,178

 

$

1,258

 

$

793

 

$

4,174

 

$

1,166

 

$

1,330

 

$

2,496

 

Net loss attributable to non-controlling interests

 

(1)

   

(2)

   

(1)

   

(2)

   

(6)

   

(2)

   

(1)

   

(3)

 

(Income) loss from discontinued operations, net of tax

 

(1)

   

(3)

   

3

   

5

   

4

   

3

   

(3)

   

- -

 

Income from continuing operations(a)

 

943

   

1,173

   

1,260

   

796

   

4,172

   

1,167

   

1,326

   

2,493

 

       Provision for income taxes

 

383

   

425

   

434

   

298

   

1,540

   

440

   

541

   

981

 

       Depreciation and amortization

 

256

   

254

   

262

   

247

   

1,019

   

287

   

247

   

534

 

       Interest expense, net

 

86

   

89

   

79

   

65

   

319

   

58

   

72

   

130

 

EBITDA(b)

$

1,668

 

$

1,941

 

$

2,035

 

$

1,406

 

$

7,050

 

$

1,952

 

$

2,186

 

$

4,138

                                                 
   

(a) 

Amounts presented herein include after-tax LCM charges of $28 million in the third quarter of 2014, $455 million in the fourth quarter of 2014 and $58 million in the first quarter of 2015. The second quarter of 2015 includes an after-tax benefit of $6 million for the partial reversal of the first quarter 2015 LCM adjustment resulting from price recoveries during the period.

(b)

EBITDA as presented herein includes the impacts of pre-tax LCM charges of $45 million in the third quarter of 2014, $715 million in the fourth quarter of 2014, and $92 million in the first quarter of 2015. The second quarter of 2015 includes a pre-tax LCM benefit of $9 million for the partial reversal of the first quarter 2015 LCM adjustment.

   

 

 

Table 9 - Selected Segment Operating Information

                                         
           

2014

 

2015

           

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

YTD

 

Olefins and Polyolefins - Americas

                               
   

Volumes (million pounds)

                               
     

Ethylene produced

 

1,979

 

1,721

 

2,301

 

2,458

 

8,459

 

2,364

 

2,415

 

4,779

     

Propylene produced

 

611

 

648

 

559

 

719

 

2,537

 

805

 

740

 

1,545

     

Polyethylene sold

 

1,377

 

1,334

 

1,486

 

1,360

 

5,557

 

1,347

 

1,425

 

2,772

     

Polypropylene sold

 

601

 

592

 

642

 

552

 

2,387

 

583

 

648

 

1,231

   

Benchmark Market Prices

                               
     

West Texas Intermediate crude oil (USD per barrel)

 

98.61

 

102.99

 

97.25

 

73.20

 

92.91

 

48.57

 

57.95

 

53.34

     

Light Louisiana Sweet ("LLS") crude oil (USD per barrel)

 

104.36

 

105.55

 

101.03

 

76.58

 

96.92

 

52.84

 

62.93

 

57.97

     

Natural gas (USD per million BTUs)

 

5.01

 

4.74

 

4.19

 

4.09

 

4.51

 

2.76

 

2.76

 

2.76

     

U.S. weighted average cost of ethylene production (cents/pound)

 

20.0

 

17.1

 

14.5

 

10.5

 

15.4

 

10.2

 

9.7

 

10.0

     

U.S. ethylene (cents/pound)

 

48.3

 

47.2

 

51.8

 

44.8

 

48.0

 

34.8

 

34.2

 

34.5

     

U.S. polyethylene [high density] (cents/pound)

 

76.3

 

77.0

 

78.0

 

76.7

 

77.0

 

65.7

 

67.3

 

66.5

     

U.S. propylene (cents/pound)

 

73.3

 

69.7

 

70.8

 

69.8

 

70.9

 

49.7

 

41.7

 

45.7

     

U.S. polypropylene [homopolymer] (cents/pound)

 

88.3

 

84.7

 

86.3

 

85.8

 

86.3

 

67.7

 

61.7

 

64.7

                                         
 

Olefins and Polyolefins - Europe, Asia, International

                               
   

Volumes (million pounds)

                               
     

Ethylene produced

 

989

 

1,024

 

1,039

 

1,059

 

4,111

 

1,007

 

1,047

 

2,054

     

Propylene produced

 

582

 

617

 

629

 

618

 

2,446

 

600

 

632

 

1,232

     

Polyethylene sold

 

1,275

 

1,363

 

1,284

 

1,254

 

5,176

 

1,533

 

1,360

 

2,893

     

Polypropylene sold

 

1,509

 

1,707

 

1,633

 

1,561

 

6,410

 

1,817

 

1,529

 

3,346

   

Benchmark Market Prices (€0.01 per pound)

                               
     

Western Europe weighted average cost of ethylene production

 

32.9

 

34.3

 

31.5

 

18.2

 

29.2

 

22.9

 

23.2

 

23.0

     

Western Europe ethylene

 

54.7

 

52.8

 

54.1

 

48.7

 

52.6

 

39.3

 

47.1

 

43.2

     

Western Europe polyethylene [high density]

 

56.1

 

54.8

 

55.4

 

51.5

 

54.5

 

45.2

 

60.6

 

52.9

     

Western Europe propylene

 

51.3

 

52.2

 

51.9

 

46.5

 

50.5

 

37.1

 

44.4

 

40.7

     

Western Europe polypropylene [homopolymer]

 

59.9

 

61.3

 

61.4

 

57.0

 

59.9

 

49.8

 

62.5

 

56.1

                                       
 

Intermediates and Derivatives

                               
   

Volumes (million pounds)

                               
     

Propylene oxide and derivatives

 

772

 

726

 

768

 

781

 

3,047

 

870

 

751

 

1,621

     

Ethylene oxide and derivatives

 

262

 

319

 

211

 

226

 

1,018

 

268

 

312

 

580

     

Styrene monomer

 

683

 

870

 

933

 

870

 

3,356

 

903

 

735

 

1,638

     

Acetyls

 

683

 

592

 

613

 

619

 

2,507

 

547

 

810

 

1,357

     

TBA Intermediates

 

416

 

391

 

461

 

384

 

1,652

 

433

 

321

 

754

   

Volumes (million gallons)

                               
     

MTBE/ETBE

 

188

 

266

 

245

 

216

 

915

 

229

 

299

 

528

   

Benchmark Market Margins  (cents per gallon)

                               
     

MTBE - Northwest Europe

 

63.4

 

90.7

 

111.8

 

109.1

 

94.0

 

64.0

 

106.0

 

85.3

                                     
 

Refining

                               
   

Volumes (thousands of barrels per day)

                               
     

Heavy crude oil processing rate

 

247

 

257

 

264

 

266

 

259

 

241

 

255

 

248

   

Benchmark Market Margins

                               
     

Light crude oil - 2-1-1

 

13.18

 

17.29

 

14.20

 

8.50

 

13.32

 

15.02

 

16.42

 

15.74

     

Light crude oil - Maya differential

 

15.08

 

9.72

 

10.15

 

9.22

 

11.11

 

8.72

 

7.56

 

8.22

 
 

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

                                                 
   

2014

 

2015

 

(Millions of U.S. dollars)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

YTD

                                                 
 

Sales and other operating revenues

$

11,135

 

$

12,117

 

$

12,066

 

$

10,290

 

$

45,608

 

$

8,185

 

$

9,145

 

$

17,330

 

Cost of sales(a)

 

9,577

   

10,255

   

10,118

   

8,989

   

38,939

   

6,379

   

7,047

   

13,426

 

Selling, general and administrative expenses

 

186

   

215

   

211

   

194

   

806

   

205

   

228

   

433

 

Research and development expenses

 

32

   

34

   

31

   

30

   

127

   

26

   

25

   

51

 

    Operating income(a)

 

1,340

   

1,613

   

1,706

   

1,077

   

5,736

   

1,575

   

1,845

   

3,420

 

Income from equity investments

 

61

   

68

   

64

   

64

   

257

   

69

   

90

   

159

 

Interest expense, net

 

(86)

   

(89)

   

(79)

   

(65)

   

(319)

   

(58)

   

(72)

   

(130)

 

Other income, net

 

11

   

6

   

3

   

18

   

38

   

21

   

4

   

25

 

    Income from continuing operations before income taxes(a)

 

1,326

   

1,598

   

1,694

   

1,094

   

5,712

   

1,607

   

1,867

   

3,474

 

Provision for income taxes

 

383

   

425

   

434

   

298

   

1,540

   

440

   

541

   

981

 

    Income from continuing operations(b)

 

943

   

1,173

   

1,260

   

796

   

4,172

   

1,167

   

1,326

   

2,493

 

Income (loss) from discontinued operations, net of tax

 

1

   

3

   

(3)

   

(5)

   

(4)

   

(3)

   

3

   

- -

   

  Net income(b)

   

944

   

1,176

   

1,257

   

791

   

4,168

   

1,164

   

1,329

   

2,493

 

Net loss attributable to non-controlling interest

 

1

   

2

   

1

   

2

   

6

   

2

   

1

   

3

   

  Net income attributable to the Company shareholders(b)

 

$

945

 

$

1,178

 

$

1,258

 

$

793

 

$

4,174

 

$

1,166

 

$

1,330

 

$

2,496

                                                 
   

(a)

Amounts presented herein include pre-tax LCM charges of $45 million in the third quarter of 2014, $715 million in the fourth quarter of 2014 and $92 million in the first quarter of 2015. The second quarter of 2015 includes a pre-tax benefit of $9 million for the partial reversal of the first quarter 2015 LCM adjustment resulting from price recoveries during the period.

(b)

Amounts presented herein include after tax LCM charges of $28 million in the third quarter of 2014, $455 million in the fourth quarter of 2014 and $58 million in the first quarter of 2015. The second quarter of 2015 includes an after tax benefit of $6 million for the partial reversal of the first quarter 2015 LCM adjustment discussed above.

 

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

           
                                               
 

2014

 

2015

Millions of U.S. dollars (except share data)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

YTD

Pretax charges (benefits):

                                             

       Settlement of environmental indemnification agreement

$

(52)

 

$

- -

 

$

- -

 

$

- -

 

$

(52)

 

$

- -

 

$

- -

 

$

- -

       Lower of cost or market inventory adjustment

 

- -

   

- -

   

45

   

715

   

760

   

92

   

(9)

   

83

       Emission allowance credits, amortization

 

- -

   

- -

   

- -

   

- -

   

- -

   

35

   

- -

   

35

Total pretax charges (benefits)

 

(52)

   

- -

   

45

   

715

   

708

   

127

   

(9)

   

118

Provision for (benefit from) income tax related to these items

 

- -

   

- -

   

(17)

   

(260)

   

(277)

   

(47)

   

3

   

(44)

After-tax effect of net charges (benefits)

$

(52)

 

$

- -

 

$

28

 

$

455

 

$

431

 

$

80

 

$

(6)

 

$

74

Effect on diluted earnings per share

$

0.09

 

$

- -

 

$

(0.05)

 

$

(0.91)

 

$

(0.82)

 

$

(0.17)

 

$

0.02

 

$

(0.16)

             

 

Table 12 - Unaudited Cash Flow Information

                                                       
         

2014

 

2015

 

(Millions of U.S. dollars)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

   

Q2

   

YTD

                                                       
 

Net cash provided by operating activities

$

801

 

$

1,797

 

$

1,434

 

$

2,016

 

$

6,048

 

$

1,468

 

$

1,446

 

$

2,914

                                                       
 

Net cash used in investing activities

 

(2,011)

   

(246)

   

(638)

   

(636)

   

(3,531)

   

(443)

   

(727)

   

(1,170)

                                                   
 

Net cash used in financing activities

 

(550)

   

(2,217)

   

(1,621)

   

(1,519)

   

(5,907)

   

(401)

   

(1,021)

   

(1,422)

                                                       
                                                       
                                                       

 

Table 13 - Unaudited Balance Sheet Information

                                               
             

March 31,

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

June 30,

 

(Millions of U.S. dollars)

2014

 

2014

 

2014

 

2014

 

2015

 

2015

                                               
 

Cash and cash equivalents

$

2,702

 

$

2,030

 

$

1,185

 

$

1,031

 

$

1,616

 

$

1,325

 

Restricted cash

 

3

   

2

   

- -

   

2

   

2

   

3

 

Short-term investments

 

1,402

   

1,299

   

1,544

   

1,593

   

1,478

   

1,989

 

Accounts receivable, net

 

4,141

   

4,264

   

4,105

   

3,448

   

3,089

   

3,373

 

Inventories

 

5,589

   

5,326

   

5,359

   

4,517

   

4,267

   

4,179

 

Prepaid expenses and other current assets

 

1,156

   

784

   

739

   

1,054

   

1,195

   

1,121

   

Total current assets

 

14,993

   

13,705

   

12,932

   

11,645

   

11,647

   

11,990

 

Property, plant and equipment, net

 

8,556

   

8,740

   

8,600

   

8,758

   

8,430

   

8,636

 

Investments and long-term receivables:

                                 
   

Investment in PO joint ventures

 

424

   

418

   

397

   

384

   

373

   

357

   

Equity investments

 

1,693

   

1,702

   

1,690

   

1,636

   

1,581

   

1,612

   

Other investments and long-term receivables

 

62

   

58

   

54

   

44

   

38

   

126

 

Goodwill

 

605

   

602

   

576

   

566

   

533

   

543

 

Intangible assets, net

 

870

   

838

   

799

   

769

   

695

   

671

 

Other assets

 

624

   

593

   

583

   

481

   

709

   

670

   

Total assets

$

27,827

 

$

26,656

 

$

25,631

 

$

24,283

 

$

24,006

 

$

24,605

                                     
 

Current maturities of long-term debt

$

3

 

$

3

 

$

2

 

$

4

 

$

4

 

$

3

 

Short-term debt

 

58

   

55

   

56

   

346

   

514

   

582

 

Accounts payable

 

3,642

   

3,690

   

3,431

   

3,064

   

2,631

   

2,755

 

Accrued liabilities

 

1,477

   

1,310

   

1,460

   

1,554

   

1,482

   

1,455

 

Deferred income taxes

 

540

   

570

   

685

   

469

   

429

   

434

   

Total current liabilities

 

5,720

   

5,628

   

5,634

   

5,437

   

5,060

   

5,229

 

Long-term debt

 

6,766

   

6,766

   

6,753

   

6,757

   

7,749

   

7,728

 

Other liabilities

 

1,838

   

1,851

   

1,795

   

2,122

   

2,038

   

2,063

 

Deferred income taxes

 

1,677

   

1,623

   

1,574

   

1,623

   

1,653

   

1,635

 

Stockholders' equity

 

11,791

   

10,753

   

9,843

   

8,314

   

7,478

   

7,927

 

Non-controlling interests

 

35

   

35

   

32

   

30

   

28

   

23

   

Total liabilities and stockholders' equity

$

27,827

 

$

26,656

 

$

25,631

 

$

24,283

 

$

24,006

 

$

24,605

                                     
                                     

 

Amazing Chemistry

Logo - http://photos.prnewswire.com/prnh/20140416/75605

 

SOURCE LyondellBasell Industries

For further information: Media Contact: George Smalley, +1 713-309-7575; Investor Contact: Douglas J. Pike, +1 713-309-7141


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