LyondellBasell Reports Third Quarter 2017 Earnings

October 27, 2017

HOUSTON and LONDON, Oct. 27, 2017 /PRNewswire/ --

Third Quarter 2017 Highlights

  • Income from continuing operations: $1.1 billion
  • EBITDA: $1.8 billion
  • Quarterly diluted earnings per share: $2.67 per share
  • Impacts from Hurricane Harvey partially offset by margin improvements
  • Dividends and share repurchases totaled $652 million; repurchased 3.1 million shares during the third quarter
  • Senior unsecured debt raised to BBB+ by S&P Global Ratings

Comparisons with the prior quarter and third quarter 2016 are available in the following table:

 

Table 1 - Earnings Summary

 

Three Months Ended

Nine Months Ended

 

September 30,

June 30,

September 30,

September 30,

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

2017

2017

2016

2017

2016

Sales and other operating revenues

$8,516

$8,403

$7,365

$25,349

$21,436

Net income(a)

1,056

1,130

953

2,983

3,074

Income from continuing operations(b)

1,058

1,134

955

2,997

3,077

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

         
 

Net income(c)

2.67

2.81

2.30

7.46

7.23

 

Income from continuing operations(b)

2.67

2.82

2.31

7.49

7.24

Diluted share count (millions)

395

402

414

400

424

EBITDA(d)

1,821

1,970

1,606

5,408

5,196

             
   

(a)

Includes net (income) loss 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.

LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the third quarter 2017 of $1.1 billion, or $2.67 per share.  In September, LyondellBasell's interest in the Geosel pipeline and storage system in France was sold for an after-tax gain of $103 million that increased third quarter earnings by $0.26 per share.  Third quarter 2017 EBITDA was $1.8 billion.

"LyondellBasell's portfolio of global businesses demonstrated strong performance in the third quarter with EBITDA in our Intermediates and Derivatives segment improving by more than 30% relative to the third quarter of 2016 and continued strong results from our Olefins and Polyolefins – Europe, Asia and International segment," said Bob Patel, LyondellBasell CEO.

"On the U.S. Gulf Coast, our commitment to hurricane preparedness enabled safe plant operations during Hurricane Harvey.  We are deeply grateful for the selfless dedication and commitment of our employees toward both restoring our businesses and supporting our communities during this unprecedented storm.  We estimate that lost sales volumes valued at third quarter margins and additional related costs due to the storm impacted third quarter results by approximately $200 million.  Margin improvements during September provided a partial offset to the lost production and higher costs," Patel said.

"During the third quarter, LyondellBasell advanced our growth strategy by opening a new polypropylene compounds plant in China and reaching final investment decision for our next propylene oxide (PO) plant while generating approximately $1.5 billion of cash flow from operating activity and returning $652 million to shareholders.  With Standard & Poor's raising our senior unsecured debt to BBB+, the rating on our long-term debt now matches our strong corporate investment-grade credit ratings," said Patel.

OUTLOOK
"Hurricane Harvey reduced inventories across the petrochemical industry and contributed to further delays in the startup of new U.S. ethylene and derivative capacity.  As the industry works to rebuild inventories during the fourth quarter, we expect global markets will remain tight to balanced for the remainder of 2017 and the industry will be better positioned to absorb capacity additions during 2018," 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. 

Olefins and 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

Nine Months Ended

 
   

September 30,

June 30,

September 30,

September 30,

 

Millions of U.S. dollars

2017

2017

2016

2017

2016

 

Operating income

$497

$738

$582

$1,794

$1,935

 

EBITDA

616

859

682

2,198

2,314

 
               

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA decreased $243 million versus the second quarter 2017.  Compared to the prior period, olefin results declined approximately $260 million.  Ethylene margins fell approximately 5 cents per pound primarily due to increasing feedstock prices.  Sales volumes also declined due to production outages related to Hurricane Harvey.  Combined polyolefin results were relatively unchanged.  Improvements in polyethylene volume and polyethylene spreads over ethylene were offset by reduced volumes in polypropylene combined with polypropylene prices lagging propylene price increases.  Joint venture equity income decreased by $3 million

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA decreased $66 million versus the third quarter 2016.  Olefin results declined approximately $130 million primarily due to a decrease in ethylene margin from reduced ethylene price and increased feedstock costs.  Net ethylene production increased 8 percent due to planned maintenance and expansion in the third quarter 2016 at Corpus Christi and planned maintenance at Morris which exceeded the Harvey volume impacts in the third quarter 2017.  Combined polyolefin results increased approximately $40 million primarily due to a polyethylene spread improvement over ethylene of approximately 5 cents per pound.  Joint venture equity income declined by $4 million.   

Olefins and Polyolefins - Europe, Asia, and 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

Nine Months Ended

 
   

September 30,

June 30,

September 30,

September 30,

 

Millions of U.S. dollars

2017

2017

2016

2017

2016

 

Operating income

$460

$549

$447

$1,410

$1,228

 

EBITDA

698

699

584

1,926

1,669

 
               

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA decreased by $1 million versus the second quarter 2017.  The third quarter benefited $108 million from the sale of LyondellBasell's interest in Geosel.  Olefin results decreased approximately $100 million primarily due to declining co-product prices.  Combined polyolefin results decreased approximately $10 million with reduced margins partially offset by increased volume.  Joint venture equity income was relatively unchanged. 

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased by $114 million versus the third quarter 2016.  The third quarter 2017 benefited $108 million from the sale of LyondellBasell's interest in Geosel.  Third quarter 2016 included an $11 million benefit from the restructuring of Asian polypropylene joint ventures and the sale of Australian polypropylene assets.  Olefin results decreased by approximately $15 million as higher feedstock prices led to declining ethylene margins.  Combined polyolefin results increased by approximately $10 million with increased sales volumes partially offset by declining polyethylene spreads.  Joint venture equity income was relatively unchanged.

Intermediates and 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

Nine Months Ended

 
 

September 30,

June 30,

September 30,

September 30,

 

Millions of U.S. dollars

2017

2017

2016

2017

2016

 

Operating income

$329

$270

$240

$868

$822

 

EBITDA

402

339

304

1,080

1,027

 
             

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA increased $63 million versus the second quarter 2017.  PO and derivatives results increased approximately $25 million.  Volumes improved resulting from the completion of planned maintenance at our plant in Botlek, The Netherlands in the second quarter which were partially offset by production losses in the third quarter due to Hurricane Harvey.  Intermediate chemicals results increased approximately $15 million, primarily due to a 2 cent per pound improvement in styrene margins.  Volumes declined for most intermediate chemicals except for an increase in methanol volumes due to the completion of second quarter planned maintenance.  Oxyfuels and related products results increased by approximately $25 million primarily due to increased volumes from the completion of planned maintenance at Botlek.  Joint venture equity income increased by $4 million.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased $98 million versus the third quarter 2016.  PO and derivatives results increased by approximately $35 million as both margins and volumes improved.  Intermediate chemicals results increased by approximately $85 million primarily due to margin improvements in styrene, methanol and ethylene glycol which more than offset volume declines related to Hurricane Harvey.  Oxyfuels and related products results declined by approximately $20 million primarily due to hurricane related production losses.  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

Nine Months Ended

 
 

September 30,

June 30,

September 30,

September 30,

 

Millions of U.S. dollars

2017

2017

2016

2017

2016

 

Operating income (loss)

$10

($21)

($56)

($81)

($139)

 

EBITDA

58

25

(10)

53

(9)

 
             

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA increased $33 million versus the second quarter 2017.  The Houston refinery operated at 240,000 barrels per day, 25,000 barrels per day less than the prior quarter due to reduced rates as a result of Hurricane Harvey.  A $2.27 increase in the Maya 2-1-1 to $21.81 was partially offset by unfavorable heavy to light differentials on by-product margins.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased $68 million versus the third quarter 2016.  Third quarter 2017 throughput increased by 31,000 barrels per day with operational disruptions in the third quarter of 2016 exceeding reduced rates in the third quarter 2017 due to Hurricane Harvey.  A $2.83 increase in the Maya 2-1-1 to $21.81 was partially offset by unfavorable heavy to light differentials on by-product margins.

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

Nine Months Ended

 
   

September 30,

June 30,

September 30,

September 30,

 

Millions of U.S. dollars

2017

2017

2016

2017

2016

 

Operating income

$36

$39

$35

$125

$170

 

EBITDA

47

48

45

155

201

 
               

Three months ended September 30, 2017 versus three months ended June 30, 2017 – EBITDA decreased by $1 million versus the second quarter 2017.

Three months ended September 30, 2017 versus three months ended September 30, 2016 – EBITDA increased by $2 million versus the third quarter 2016.

Capital Spending and Cash Balances

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $318 million during the third quarter 2017.  Our cash and liquid investment balance was $3.1 billion at September 30, 2017.  We repurchased 3.1 million shares during the third quarter 2017, leaving 394 million common shares outstanding as of September 30, 2017.  The company paid dividends of $356 million during the third quarter of 2017.

CONFERENCE CALL
LyondellBasell will host a conference call October 27 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 800-475-8402. 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 www.lyb.com/earnings.

A replay of the call will be available from 2 p.m. EDT October 27 until November 27 at 11:59 p.m. EST.  The replay dial-in numbers are 866-448-2572 (U.S.) and 203-369-1168 (international). The pass code for each is 2526.

ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin and polypropylene technologies. More information about LyondellBasell can be found at www.lyondellbasell.com.

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.lyondellbasell.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.

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.

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

 

Q2

 

Q3

 

YTD

 

Sales and other operating revenues:

                                                   
   

Olefins & Polyolefins - Americas

$

2,115

 

$

2,211

 

$

2,342

 

$

2,409

 

$

9,077

 

$

2,604

 

$

2,547

 

$

2,449

 

$

7,600

   

Olefins & Polyolefins - EAI

 

2,578

   

2,721

   

2,634

   

2,646

   

10,579

   

3,024

   

3,008

   

3,152

   

9,184

   

Intermediates & Derivatives

 

1,702

   

1,769

   

1,805

   

1,950

   

7,226

   

2,150

   

2,014

   

2,077

   

6,241

   

Refining

 

955

   

1,289

   

1,330

   

1,561

   

5,135

   

1,353

   

1,713

   

1,670

   

4,736

   

Technology

 

132

   

129

   

102

   

116

   

479

   

120

   

107

   

98

   

325

   

Other/elims

 

(739)

   

(791)

   

(848)

   

(935)

   

(3,313)

   

(821)

   

(986)

   

(930)

   

(2,737)

     

Continuing Operations

 

$

6,743

 

$

7,328

 

$

7,365

 

$

7,747

 

$

29,183

 

$

8,430

 

$

8,403

 

$

8,516

 

$

25,349

 

Operating income (loss):

                                                   
   

Olefins & Polyolefins - Americas

$

707

 

$

646

 

$

582

 

$

458

 

$

2,393

 

$

559

 

$

738

 

$

497

 

$

1,794

   

Olefins & Polyolefins - EAI

 

358

   

423

   

447

   

266

   

1,494

   

401

   

549

   

460

   

1,410

   

Intermediates & Derivatives

 

255

   

327

   

240

   

236

   

1,058

   

269

   

270

   

329

   

868

   

Refining

 

(30)

   

(53)

   

(56)

   

40

   

(99)

   

(70)

   

(21)

   

10

   

(81)

   

Technology

 

73

   

62

   

35

   

51

   

221

   

50

   

39

   

36

   

125

   

Other

 

(3)

   

(2)

   

1

   

(3)

   

(7)

   

1

   

2

   

- -

   

3

     

Continuing Operations

$

1,360

 

$

1,403

 

$

1,249

 

$

1,048

 

$

5,060

 

$

1,210

 

$

1,577

 

$

1,332

 

$

4,119

 

Depreciation and amortization:

                                                   
   

Olefins & Polyolefins - Americas

$

90

 

$

88

 

$

87

 

$

97

 

$

362

 

$

118

 

$

107

 

$

105

 

$

330

   

Olefins & Polyolefins - EAI

 

55

   

58

   

58

   

58

   

229

   

59

   

58

   

60

   

177

   

Intermediates & Derivatives

 

70

   

69

   

62

   

68

   

269

   

69

   

68

   

69

   

206

   

Refining

 

43

   

40

   

40

   

40

   

163

   

40

   

44

   

49

   

133

   

Technology

 

10

   

11

   

10

   

10

   

41

   

10

   

9

   

11

   

30

     

Continuing Operations

$

268

 

$

266

 

$

257

 

$

273

 

$

1,064

 

$

296

 

$

286

 

$

294

 

$

876

 

EBITDA: (b)

                                                   
   

Olefins & Polyolefins - Americas

$

878

 

$

754

 

$

682

 

$

563

 

$

2,877

 

$

723

 

$

859

 

$

616

 

$

2,198

   

Olefins & Polyolefins - EAI

 

509

   

576

   

584

   

398

   

2,067

   

529

   

699

   

698

   

1,926

   

Intermediates & Derivatives

 

326

   

397

   

304

   

306

   

1,333

   

339

   

339

   

402

   

1,080

   

Refining

 

14

   

(13)

   

(10)

   

81

   

72

   

(30)

   

25

   

58

   

53

   

Technology

 

83

   

73

   

45

   

61

   

262

   

60

   

48

   

47

   

155

   

Other

 

(3)

   

(4)

   

1

   

(3)

   

(9)

   

(4)

   

- -

   

- -

   

(4)

     

Continuing Operations

$

1,807

 

$

1,783

 

$

1,606

 

$

1,406

 

$

6,602

 

$

1,617

 

$

1,970

 

$

1,821

 

$

5,408

 

Capital, turnarounds and IT deferred spending:

                                                   
   

Olefins & Polyolefins - Americas

$

303

 

$

339

 

$

384

 

$

350

 

$

1,376

 

$

202

 

$

179

 

$

165

 

$

546

   

Olefins & Polyolefins - EAI

 

81

   

60

   

48

   

72

   

261

   

47

   

32

   

44

   

123

   

Intermediates & Derivatives

 

76

   

80

   

90

   

87

   

333

   

77

   

107

   

79

   

263

   

Refining

 

57

   

71

   

51

   

45

   

224

   

84

   

79

   

21

   

184

   

Technology

 

6

   

9

   

9

   

12

   

36

   

7

   

6

   

8

   

21

   

Other

 

4

   

4

   

4

   

1

   

13

   

4

   

4

   

1

   

9

     

Continuing Operations

$

527

 

$

563

 

$

586

 

$

567

 

$

2,243

 

$

421

 

$

407

 

$

318

 

$

1,146

                                                             
                                                             

 

(a)

EBITDA for the first quarter of 2016 includes a pre-tax lower of cost or market inventory valuation ("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.

(b) 

See Table 8 for EBITDA calculation. 

 

Table 8 - EBITDA Calculation

 
                                                       
   

2016

 

2017

 

(Millions of U.S. dollars)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

Q3

 

YTD

                                                       
 

Net income(a)

$

1,030

 

$

1,091

 

$

953

 

$

763

 

$

3,837

 

$

797

 

$

1,130

 

$

1,056

 

$

2,983

 

Loss from discontinued operations, net of tax

 

- -

   

1

   

2

   

7

   

10

   

8

   

4

   

2

   

14

 

Income from continuing operations(a)

 

1,030

   

1,092

   

955

   

770

   

3,847

   

805

   

1,134

   

1,058

   

2,997

   

Provision for income taxes

 

432

   

346

   

326

   

282

   

1,386

   

315

   

459

   

380

   

1,154

   

Depreciation and amortization

 

268

   

266

   

257

   

273

   

1,064

   

296

   

286

   

294

   

876

   

Interest expense, net(b)

 

77

   

79

   

68

   

81

   

305

   

201

   

91

   

89

   

381

 

EBITDA(c)

$

1,807

 

$

1,783

 

$

1,606

 

$

1,406

 

$

6,602

 

$

1,617

 

$

1,970

 

$

1,821

 

$

5,408

                                                       
                                                       

 

(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. The third quarter of 2017 includes an after-tax gain of $103 million on the sale of our interest in Geosel.

(b)

Includes pre-tax charges totaling $113 million in the first quarter of 2017 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. Third quarter 2017 EBITDA includes a pre-tax gain of $108 million on the sale of our interest in Geosel.

 

Table 9 - Selected Segment Operating Information

 
                                           
         

2016

 

2017

         

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

 

Q2

 

Q3

 

YTD

Olefins and Polyolefins - Americas

                                   
 

Volumes (million pounds)

                                   
   

Ethylene produced

 

2,392

 

1,899

 

1,939

 

2,173

 

8,403

 

2,486

 

2,606

 

2,088

 

7,180

   

Propylene produced

 

832

 

748

 

575

 

660

 

2,815

 

597

 

821

 

671

 

2,089

   

Polyethylene sold

 

1,554

 

1,426

 

1,517

 

1,485

 

5,982

 

1,533

 

1,404

 

1,454

 

4,391

   

Polypropylene sold

 

612

 

582

 

659

 

623

 

2,476

 

644

 

634

 

624

 

1,902

 

Benchmark Market Prices

                                   
   

West Texas Intermediate crude oil (USD per barrel)

 

33.63

 

46.01

 

44.94

 

49.29

 

43.56

 

51.78

 

48.15

 

48.20

 

49.36

   

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

 

35.34

 

47.39

 

46.52

 

50.60

 

45.03

 

53.39

 

50.17

 

51.67

 

51.73

   

Houston Ship Channel natural gas (USD per million BTUs)

 

1.93

 

2.06

 

2.79

 

3.01

 

2.45

 

2.96

 

3.14

 

2.92

 

3.01

   

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

 

9.8

 

12.0

 

10.6

 

14.3

 

11.7

 

11.8

 

12.5

 

16.1

 

13.5

   

U.S. ethylene (cents/pound)

 

26.7

 

30.3

 

33.0

 

32.7

 

30.7

 

33.1

 

31.9

 

31.9

 

32.3

   

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

 

52.3

 

59.0

 

60.7

 

58.3

 

57.6

 

57.3

 

59.0

 

60.7

 

59.0

   

U.S. propylene (cents/pound)

 

31.0

 

32.7

 

37.8

 

36.2

 

34.4

 

47.2

 

41.0

 

41.7

 

43.3

   

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

 

67.8

 

61.7

 

60.2

 

55.8

 

61.4

 

66.2

 

59.0

 

60.2

 

61.8

                                           

Olefins and Polyolefins - Europe, Asia, International

                                   
 

Volumes (million pounds)

                                   
   

Ethylene produced

 

950

 

941

 

1,066

 

946

 

3,903

 

1,022

 

1,069

 

1,046

 

3,137

   

Propylene produced

 

555

 

577

 

649

 

563

 

2,344

 

598

 

632

 

620

 

1,850

   

Polyethylene sold

 

1,434

 

1,386

 

1,315

 

1,330

 

5,465

 

1,421

 

1,370

 

1,525

 

4,316

   

Polypropylene sold

 

1,773

 

1,617

 

1,509

 

1,582

 

6,481

 

1,714

 

1,530

 

1,738

 

4,982

 

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

 

17.6

 

18.9

 

19.7

   

Western Europe ethylene

 

38.4

 

41.1

 

42.3

 

43.1

 

41.2

 

46.2

 

47.1

 

44.2

 

45.8

   

Western Europe polyethylene [high density]

 

55.4

 

57.6

 

55.7

 

55.2

 

56.0

 

58.2

 

59.5

 

56.6

 

58.1

   

Western Europe propylene

 

26.3

 

28.8

 

30.7

 

33.3

 

29.8

 

37.0

 

39.3

 

36.4

 

37.6

   

Western Europe polypropylene [homopolymer]

 

46.5

 

49.5

 

49.5

 

51.7

 

49.3

 

56.3

 

60.1

 

57.4

 

58.0

                                         

Intermediates and Derivatives

                                   
 

Volumes (million pounds unless otherwise indicated)

                                   
   

Propylene oxide and derivatives

 

793

 

743

 

752

 

749

 

3,037

 

786

 

748

 

793

 

2,327

   

Intermediate Chemicals:

                                   
     

Ethylene oxide and derivatives

 

301

 

233

 

224

 

329

 

1,087

 

292

 

297

 

275

 

864

     

Styrene monomer

 

917

 

933

 

911

 

933

 

3,694

 

992

 

924

 

845

 

2,761

     

Acetyls

 

702

 

821

 

751

 

776

 

3,050

 

825

 

672

 

715

 

2,212

   

Oxyfuels and Related Products:

                                   
     

TBA Intermediates

 

415

 

391

 

410

 

361

 

1,577

 

383

 

332

 

359

 

1,074

     

MTBE/ETBE (million gallons)

 

270

 

278

 

298

 

264

 

1,110

 

239

 

263

 

289

 

791

 

Benchmark Market Margins  (cents per gallon)

                                   
   

MTBE - Northwest Europe

 

44.4

 

78.7

 

55.3

 

50.6

 

57.2

 

49.5

 

67.3

 

59.8

 

58.6

                                       

Refining

                                   
 

Volumes (thousands of barrels per day)

                                   
   

Heavy crude oil processing rate

 

186

 

183

 

209

 

228

 

201

 

193

 

265

 

240

 

233

 

Benchmark Market Margins

                                   
   

Light crude oil - 2-1-1

 

8.67

 

11.52

 

11.46

 

11.20

 

10.73

 

11.86

 

13.26

 

16.71

 

13.94

   

Light crude oil - Maya differential

 

9.19

 

9.55

 

7.52

 

7.80

 

8.51

 

8.78

 

6.28

 

5.10

 

6.71

                                         

 

   

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

 

Q2

 

Q3

 

YTD

                                                       
 

Sales and other operating revenues

$

6,743

 

$

7,328

 

$

7,365

 

$

7,747

 

$

29,183

 

$

8,430

 

$

8,403

 

$

8,516

 

$

25,349

 

Cost of sales(a)

 

5,166

   

5,702

   

5,903

   

6,420

   

23,191

   

6,991

   

6,601

   

6,939

   

20,531

 

Selling, general and administrative expenses

 

193

   

199

   

188

   

253

   

833

   

204

   

200

   

218

   

622

 

Research and development expenses

 

24

   

24

   

25

   

26

   

99

   

25

   

25

   

27

   

77

   

Operating income(a)

 

1,360

   

1,403

   

1,249

   

1,048

   

5,060

   

1,210

   

1,577

   

1,332

   

4,119

 

Income from equity investments

 

91

   

117

   

81

   

78

   

367

   

81

   

78

   

81

   

240

 

Interest expense, net(b)

 

(77)

   

(79)

   

(68)

   

(81)

   

(305)

   

(201)

   

(91)

   

(89)

   

(381)

 

Other income (expense), net(c)

 

88

   

(3)

   

19

   

7

   

111

   

30

   

29

   

114

   

173

   

Income from continuing operations before income taxes(a) (b) (c)

 

1,462

   

1,438

   

1,281

   

1,052

   

5,233

   

1,120

   

1,593

   

1,438

   

4,151

 

Provision for income taxes

 

432

   

346

   

326

   

282

   

1,386

   

315

   

459

   

380

   

1,154

   

Income from continuing operations(d)

 

1,030

   

1,092

   

955

   

770

   

3,847

   

805

   

1,134

   

1,058

   

2,997

 

Loss from discontinued operations, net of tax

 

- -

   

(1)

   

(2)

   

(7)

   

(10)

   

(8)

   

(4)

   

(2)

   

(14)

     

Net income(d)

 

1,030

   

1,091

   

953

   

763

   

3,837

   

797

   

1,130

   

1,056

   

2,983

 

Net (income) loss attributable to non-controlling interests

 

- -

   

- -

   

(1)

   

- -

   

(1)

   

- -

   

1

   

1

   

2

     

Net income attributable to the Company shareholders(d)

$

1,030

 

$

1,091

 

$

952

 

$

763

 

$

3,836

 

$

797

 

$

1,131

 

$

1,057

 

$

2,985

 

 

   

(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 totaling $113 million in the first quarter of 2017 related to the repayment of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019.

(c)

Includes a $78 million gain in the first quarter of 2016 on the sale of our wholly owned Argentine subsidiary; 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 pre-tax gain of $108 million in the third quarter of 2017 on the sale of our interest in Geosel.

(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 totaling $106 million related to the repayment of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019. The third quarter of 2017 includes a $103 million after-tax gain for sale of our interest in Geosel.

 

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

 

Q2

 

Q3

 

YTD

Pretax charges (benefits):

                                                   
 

Charges and premiums related to repayment of debt

$

- -

 

$

- -

 

$

- -

 

$

- -

 

$

- -

 

$

113

 

$

- -

 

$

- -

 

$

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

   

- -

   

- -

   

- -

   

- -

 

Gain on sale of Geosel

 

- -

   

- -

   

- -

   

- -

   

- -

   

- -

   

- -

   

(108)

   

(108)

Total pretax charges (benefits)

 

(10)

   

(68)

   

- -

   

148

   

83

   

113

   

- -

   

(108)

   

5

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

 

(21)

   

21

   

- -

   

(32)

   

(32)

   

(7)

   

- -

   

5

   

(2)

After-tax effect of net charges (benefits)

$

(31)

 

$

(47)

 

$

- -

 

$

116

 

$

51

 

$

106

 

$

- -

 

$

(103)

 

$

3

Effect on diluted earnings per share

$

0.07

 

$

0.11

 

$

- -

 

$

(0.29)

 

$

(0.12)

 

$

(0.26)

 

$

- -

 

$

0.26

 

$

(0.01)

                 

 

Table 12 - Unaudited Cash Flow Information

 
                                                             
         

2016

 

2017

 

(Millions of U.S. dollars)

Q1

 

Q2

 

Q3

 

Q4

 

Total

 

Q1

   

Q2

   

Q3

   

YTD

                                                             
 

Net cash provided by operating activities(a)

$

1,300

 

$

1,261

 

$

1,332

 

$

1,713

 

$

5,606

 

$

678

 

$

1,560

 

$

1,486

 

$

3,724

                                                             
 

Net cash used in investing activities(b)

 

(600)

   

(471)

   

(459)

   

(771)

   

(2,301)

   

(541)

   

(513)

   

(200)

   

(1,254)

                                                         
 

Net cash used in financing activities (a)

 

(333)

   

(1,039)

   

(1,195)

   

(782)

   

(3,349)

   

(537)

   

(822)

   

(832)

   

(2,191)

                                                             
                                                             

 

(a)

In the second quarter of 2017, the early adoption of ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments resulted in the reclassification of cash flows related to debt extinguishment costs incurred in the first quarter of 2017 from operating to financing activities cash flows.

(b)

Also in the second quarter of 2017, the early retrospective adoption of ASU 2016-18, Statement of Cash Flows: Restricted Cash requires the inclusion of restricted cash and restricted cash equivalents in the cash and cash equivalents balances in our Statements of Cash Flows.

 

Table 13 - Unaudited Balance Sheet Information

 
                                           
   

March 31,

 

June 30,

 

September 30,

 

December 31,

 

March 31,

 

June 30,

 

September 30,

 

(Millions of U.S. dollars)

2016

 

2016

 

2016

 

2016

 

2017

 

2017

 

2017

                                           
 

Cash and cash equivalents

$

1,318

 

$

1,060

 

$

740

 

$

875

 

$

485

 

$

734

 

$

1,204

 

Restricted cash

 

4

   

4

   

4

   

3

   

1

   

6

   

7

 

Short-term investments

 

1,332

   

1,023

   

1,090

   

1,147

   

1,176

   

1,278

   

1,295

 

Accounts receivable, net

 

2,683

   

2,806

   

2,852

   

2,842

   

3,292

   

3,086

   

3,275

 

Inventories

 

3,978

   

4,009

   

4,015

   

3,809

   

3,875

   

4,007

   

4,177

 

Prepaid expenses and other current assets

 

1,009

   

1,081

   

852

   

923

   

852

   

964

   

1,104

   

Total current assets

 

10,324

   

9,983

   

9,553

   

9,599

   

9,681

   

10,075

   

11,062

 

Property, plant and equipment, net

 

9,373

   

9,681

   

10,057

   

10,137

   

10,361

   

10,551

   

10,737

 

Investments and long-term receivables:

                                       
   

Investment in PO joint ventures

 

398

   

390

   

399

   

415

   

409

   

423

   

428

   

Equity investments

 

1,734

   

1,610

   

1,681

   

1,575

   

1,672

   

1,595

   

1,644

   

Other investments and long-term receivables

 

18

   

18

   

17

   

20

   

20

   

18

   

19

 

Goodwill

 

548

   

542

   

543

   

528

   

531

   

559

   

570

 

Intangible assets, net

 

618

   

588

   

562

   

550

   

517

   

499

   

480

 

Other assets

 

559

   

623

   

607

   

618

   

577

   

398

   

303

   

Total assets

$

23,572

 

$

23,435

 

$

23,419

 

$

23,442

 

$

23,768

 

$

24,118

 

$

25,243

                                   
 

Current maturities of long-term debt

$

4

 

$

4

 

$

3

 

$

2

 

$

2

 

$

2

 

$

3

 

Short-term debt

 

594

   

616

   

621

   

594

   

611

   

561

   

381

 

Accounts payable

 

2,243

   

2,357

   

2,329

   

2,529

   

2,627

   

2,317

   

2,735

 

Accrued liabilities

 

1,600

   

1,374

   

1,357

   

1,415

   

1,139

   

1,251

   

1,493

   

Total current liabilities

 

4,441

   

4,351

   

4,310

   

4,540

   

4,379

   

4,131

   

4,612

 

Long-term debt

 

8,504

   

8,485

   

8,464

   

8,385

   

8,419

   

8,496

   

8,531

 

Other liabilities

 

2,125

   

2,143

   

2,151

   

2,113

   

2,130

   

2,253

   

2,326

 

Deferred income taxes

 

2,134

   

2,149

   

2,387

   

2,331

   

2,353

   

2,370

   

2,447

 

Stockholders' equity

 

6,344

   

6,283

   

6,082

   

6,048

   

6,462

   

6,866

   

7,326

 

Non-controlling interests

 

24

   

24

   

25

   

25

   

25

   

2

   

1

   

Total liabilities and stockholders' equity

$

23,572

 

$

23,435

 

$

23,419

 

$

23,442

 

$

23,768

 

$

24,118

 

$

25,243

                                   
                                             

 

LyondellBasell (PRNewsfoto/LyondellBasell Industries)

 

SOURCE LyondellBasell Industries