Form 8-K LyondellBasell Industrie For: Jul 28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2015

 

 

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		Delftseplein 27E 3013 AA 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))

 

 

 

---

Item 2.02 Results of Operations and Financial Conditions.

On July 28, 2015, LyondellBasell Industries N.V. announced earnings results for the quarter ended June 30, 2015. A copy of our earnings release is attached as Exhibit 99.1 and incorporated into this Item 2.02 by reference.

The information in this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits

 

(d)

Exhibits

 

99.1	Press Release dated July 28, 2015

 

---

SIGNATURES

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

 

				LYONDELLBASELL INDUSTRIES N.V.
Date: July 28, 2015				By:		/s/Jeffrey A. Kaplan
						Jeffrey A. Kaplan
						Executive Vice President

---

EXHIBIT INDEX

 

Exhibit		Description
99.1		Press Release dated July 28, 2015

Exhibit 99.1

 

NEWS RELEASE

HOUSTON and LONDON, July 28, 2015

LyondellBasell Reports Record Quarterly Results

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.”

 

LyondellBasell Industries		1
www.lyb.com

---

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.

 

LyondellBasell Industries		2
www.lyb.com

---

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.

 

LyondellBasell Industries		3
www.lyb.com

---

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.

 

LyondellBasell Industries		4
www.lyb.com

---

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.

 

LyondellBasell Industries		5
www.lyb.com

---

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.

 

LyondellBasell Industries		6
www.lyb.com

---

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 2 p.m. ET July 28 until August 28 at 11 p.m. ET. The replay dial-in numbers are 888-568-0061 (U.S.) and +1 203-369-3454 (international). The pass code for each is 62324.

 

LyondellBasell Industries		7
www.lyb.com

---

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

 

LyondellBasell Industries		8
www.lyb.com

---

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.

###

Source:   LyondellBasell Industries

 

Media Contact:		George Smalley +1 713-309-7575
Investor Contact:		Douglas J. Pike +1 713-309-7141

 

LyondellBasell Industries		9
www.lyb.com

---

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.

 

LyondellBasell Industries		10
www.lyb.com

---

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.

 

LyondellBasell Industries		11
www.lyb.com

---

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.

 

LyondellBasell Industries		12
www.lyb.com

---

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.

 

LyondellBasell Industries		13
www.lyb.com

---

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	)

 

LyondellBasell Industries		14
www.lyb.com

---

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	)

 

LyondellBasell Industries		15
www.lyb.com

---

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

 

LyondellBasell Industries		16
www.lyb.com