LyondellBasell Reports Record 2015 Earnings

Feb 02, 2016, 07:00 ET from LyondellBasell Industries

HOUSTON and LONDON, Feb. 2, 2016 /PRNewswire/ --

2015 Full Year Highlights

  • Record Earnings

–    Income from continuing operations: $4.5 billion ($4.8 billion excluding LCM1)
–    Diluted earnings per share: $9.60 per share ($10.35 per share excluding LCM)
–    EBITDA: $7.5 billion ($8.1 billion excluding LCM)

  • Advanced the Growth Program

–    Completed a 250 million pound ethylene expansion at Channelview, Texas, the third in a series of planned expansions targeted to increase our U.S. ethylene capacity by approximately 25%
–    Added over 120 million pounds of polypropylene compounds capacity

  • Strong Cash Flow and Share Repurchases

–    Full year cash generation from operations totaled $5.8 billion
–    Share repurchases and dividends totaled $6.1 billion
–    Repurchased 52 million shares or approximately 11% of the shares outstanding on January 1, 2015

Fourth Quarter 2015 Highlights

  • Income from continuing operations: $797 million ($982 million excluding LCM)
  • Diluted Earnings per share: $1.78 per share ($2.20 per share excluding LCM)
  • EBITDA: $1.4 billion ($1.7 billion excluding LCM)
  • Share repurchases and dividends totaled $1.6 billion;  repurchased 12.7 million shares during the fourth quarter or approximately 3% of the shares outstanding on October 1, 2015

Comparisons with the prior quarter, fourth quarter 2014 and full year 2014 are available in the following table:

Table 1 - Earnings Summary









Three Months Ended

Year Ended


Millions of U.S. dollars

December 31,

September 30,

December 31,

December 31,

December 31,


(except share data)

2015

2015

2014

2015

2014


Sales and other operating revenues

$7,071

$8,334

$10,290

$32,735

$45,608


Net income(a)

795

1,186

791

4,474

4,168


Income from continuing operations(b)

797

1,189

796

4,479

4,172


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








Net income(c)

1.78

2.54

1.54

9.59

7.99



Income from continuing operations(b)

1.78

2.55

1.57

9.60

8.00


Diluted share count (millions)

446

463

499

466

521


EBITDA(d)

1,394

2,001

1,406

7,533

7,050










Excluding LCM Impact:







LCM charges, pre-tax

284

181

715

548

760


Income from continuing operations

982

1,303

1,251

4,830

4,655


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








Income from continuing operations

2.20

2.80

2.48

10.35

8.92


EBITDA

1,678

2,182

2,121

8,081

7,810


(a) 

Includes net loss attributable to non-controlling interests and income (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 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 (NYSE: LYB) today announced earnings from continuing operations for the fourth quarter 2015 of $797 million, or $1.78 per share. Fourth quarter 2014 EBITDA was $1.4 billion.  The quarter included a $284 million non-cash, pre-tax charge for the impact of a lower of cost or market (LCM) inventory adjustment ($185 million after-tax).  Excluding the LCM adjustment, earnings from continuing operations during the fourth quarter totaled $982 million, or $2.20 per share and EBITDA was $1.7 billion.  Full year 2015 income from continuing operations was $4.5 billion, or $9.60 per share, and EBITDA was $7.5 billion. The full year included a non-cash, pre-tax LCM inventory adjustment of $548 million ($351 million after tax).  Excluding the LCM adjustment, earnings from continuing operations for the full year totaled $4.8 billion, or $10.35 per share, and EBITDA was $8.1 billion.

"During 2015, LyondellBasell generated record earnings, advanced our growth program, and continued returning cash to shareholders at an industry-leading rate.  Our company posted strong results, with record performance from our Olefins and Polyolefins - Europe, Asia and International, Intermediates and Derivatives, and Technology segments.  Despite the challenging oil and gas environment, LyondellBasell's performance remained focused and steady.  We continue to prove that we are capable of delivering strong results under a wide range of market conditions," said Bob Patel, LyondellBasell chief executive officer. 

"During 2015 we continued to implement and expand our strategic programs.  We completed a 250 million pound per year ethylene expansion and increased our polypropylene compounds capacity by 120 million pounds.  We also advanced additional value-enhancing projects including a propylene oxide and tertiary butyl alcohol facility, an ethylene expansion at our Corpus Christi plant and U.S. polyethylene capacity," continued Patel.

"Our cash generation continued to be very strong in 2015 and we returned cash to shareholders through share repurchases and dividends totaling approximately $6.1 billion.  Since initiating our dividend and share repurchases, we have paid approximately $9.2 billion in dividends and acquired approximately 25% of the then outstanding shares," Patel said.

OUTLOOK

"We are confident that our industry position and our continued focus on cost and operating discipline will serve us well under a variety of market conditions.  While near-term industry performance will partially hinge on the direction of raw material costs and subsequent price responses, our growth positions remain advantaged, product demand continues to be good and our expansions are generating incremental earnings.  During 2016 we plan to complete an 800 million pound ethylene expansion project, complete engineering for our one billion pound propylene oxide plant and finalize our polyethylene expansion plans.  LyondellBasell will continue to prudently pursue value-creating expansions while maintaining focus on operational performance, earnings growth and shareholder value," 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. 

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

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$662

$740

$950

$3,256

$3,572

EBITDA

775

841

1,040

3,661

3,911

LCM charges, pre-tax

59

79

234

160

279

EBITDA excluding LCM adjustments

834

920

1,274

3,821

4,190

Three months ended December 31, 2015 versus three months ended September 30, 2015 –EBITDA decreased $86 million for the fourth quarter 2015 versus the third quarter 2015, excluding a favorable $20 million quarter to quarter variance as a result of LCM inventory adjustments. Compared to the prior period, underlying olefins results decreased approximately $130 million.  This decrease was driven by lower ethylene and coproduct prices.  Lower feedstock costs resulted in ethylene margins that were approximately 6 cents per pound lower than the third quarter 2015.  Our ethylene plants operated at 95% of capacity.  Combined polyolefin results increased by approximately $40 million.  Polyethylene volumes remained strong while spreads were relatively unchanged.  Polypropylene volumes declined due to operating issues while spreads over monomer improved by approximately 4 cents per pound.  Joint venture equity income improved by $3 million.

Three months ended December 31, 2015 versus three months ended December 31, 2014 – EBITDA decreased $440 million versus the fourth quarter 2014, excluding a favorable $175 million quarter to quarter variance as a result of the LCM inventory adjustments.  Olefin results accounted for the majority of the decline as quarterly EBITDA decreased approximately $660 million versus the prior year.  Ethylene margins declined by approximately 28 cents per pound.  Combined polyolefin results increased approximately $210 million versus the prior year period.  Polyethylene volume improved by approximately 9 percent and spreads improved by approximately 6 cents per pound.  Polypropylene spreads improved by approximately 12 cents per pound.  Joint venture equity income improved by $10 million.

Full year ended December 31, 2015 versus full year ended December 31, 2014 – Segment EBITDA decreased $369 million versus 2014, excluding a favorable $119 million year to year variance as a result of the LCM inventory adjustments.  Olefin results declined by approximately $970 million from the prior year.  Ethylene margins declined by approximately 17 cents per pound versus 2014.  Lower ethylene sales prices in 2015 were partially offset by lower feedstock costs.  Production volume was approximately 14% higher as a result of the 2014 La Porte expansion and the absence of the 2014 La Porte turnaround.  Combined polyolefin results increased approximately $570 million versus the prior year.  Polyethylene spreads over ethylene improved approximately 5 cents per pound and volume increased approximately 5 percent following the 2014 Matagorda expansion.  Polypropylene spreads improved by approximately 8 cents per pound.  Equity income improved by $21 million versus the prior year due to stronger volumes and margins at our joint venture in Mexico.

Olefins and Polyolefins - Europe, Asia, International (O&P-EAI) – The primary products of this segment include ethylene and its co-products (propylene and butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and Polybutene-1 resins.

Table 3 - O&P–EAI Financial Overview

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$302

$412

$246

$1,309

$884

EBITDA

427

549

348

1,825

1,366

LCM charges, pre-tax

24

6

44

30

44

EBITDA excluding LCM adjustments

451

555

392

1,855

1,410

 

Three months ended December 31, 2015 versus three months ended September 30, 2015 – EBITDA decreased $104 million versus the record third quarter 2015, excluding an unfavorable $18 million quarter to quarter variance as a result of LCM inventory adjustments.  Olefin results decreased approximately $130 million due to lower margins while ethylene volumes improved by approximately 4 percent.  Combined polyolefin results improved by approximately $15 million and largely continued to maintain high spreads.  Polypropylene compounds and polybutene-1 results improved by approximately $20 million.  Equity income from joint ventures declined by $11 million.

Three months ended December 31, 2015 versus three months ended December 31, 2014 – EBITDA increased by $59 million versus the fourth quarter 2014, excluding a favorable $20 million quarter to quarter variance as a result of LCM inventory adjustments.  Olefin results decreased by approximately $120 million primarily as a result of lower margins.  Ethylene volume decreased by approximately 8 percent due to the turnaround at our Münchsmünster cracker in 2015.  Combined polyolefin results increased approximately $150 million due to improved margins and higher volumes for both polyethylene and polypropylene.  Polypropylene compounds and polybutene-1 results improved by approximately $20 million.  Equity income from joint ventures increased by $12 million.

Full year ended December 31, 2015 versus full year ended December 31, 2014 – The segment achieved record EBITDA for the year.  EBITDA increased $445 million versus 2014, excluding a favorable $14 million year to year variance as a result of LCM inventory adjustments.  2014 benefited from a $52 million environmental settlement that was recognized in the first quarter of 2014.  Underlying olefin results increased approximately $25 million, as average feedstock price declines outweighed lower average product prices.  Combined polyolefin results increased approximately $420 million compared to the prior year driven by strong demand leading to 7% higher volume and improving margins. Polypropylene compounds and polybutene-1 were relatively unchanged.  Equity income from joint ventures increased by $54 million, driven by strong results from joint ventures in Poland and South Korea.

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), ethylene oxide and its derivatives, and oxyfuels.

Table 4 - I&D Financial Overview

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$145

$403

$208

$1,224

$1,220

EBITDA

212

460

271

1,475

1,459

LCM charges, pre-tax

74

46

93

181

93

EBITDA excluding LCM adjustments

286

506

364

1,656

1,552

 

Three months ended December 31, 2015 versus three months ended September 30, 2015 – EBITDA decreased $220 million versus the record third quarter 2015, excluding an unfavorable $28 million quarter to quarter variance as a result of LCM inventory adjustments.  Results for PO and PO derivatives decreased approximately $10 million.  Intermediate chemicals results decreased by approximately $160 million, primarily due to declines in styrene and methanol margins and decreased acetyl volumes due to our extended La Porte turnaround.  Oxyfuels results decreased approximately $60 million with typical seasonal margin declines.  Equity income from joint ventures improved by $2 million.

Three months ended December 31, 2015 versus three months ended December 31, 2014 – EBITDA decreased $78 million versus the fourth quarter 2014, excluding a favorable $19 million quarter to quarter variance as a result of LCM inventory adjustments.  Results for PO and PO derivatives improved by approximately $35 million.  Intermediate chemicals results decreased by approximately $60 million driven by lower acetyls results from lower methanol margins and lower acetyl volumes as a result of our 2015 La Porte turnaround.  Oxyfuels decreased approximately $55 million primarily as a result of unseasonably high margins during the fourth quarter of 2014.  Equity income from joint ventures increased by $1 million.

Full year ended December 31, 2015 versus full year ended December 31, 2014 – The segment achieved record EBITDA for 2015.  EBITDA increased $104 million versus 2014, excluding an unfavorable $88 million year to year variance as a result of LCM inventory adjustments.  PO and PO derivatives results increased approximately $40 million due to slightly higher volumes.  Intermediate chemicals results improved by approximately $120 million due to improved styrene margins that were partially offset by lower methanol and vinyl acetate margins.  Oxyfuels results declined by approximately $60 million compared to the prior year as strong octane spreads over butane and 15% higher volumes partially offset a decline in gasoline prices.  Equity income from joint ventures increased by $7 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

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income (loss)

($101)

$52

($354)

$144

($106)

EBITDA

(59)

93

(311)

342

65

LCM charges, pre-tax

127

50

344

177

344

EBITDA excluding LCM adjustments

68

143

33

519

409

 

Three months ended December 31, 2015 versus three months ended September 30, 2015 – EBITDA decreased $75 million versus the third quarter 2014, excluding an unfavorable $77 million quarter to quarter variance as a result of LCM inventory adjustments.  The Houston refinery operated at 206,000 barrels per day, down 43,000 barrels per day from the prior quarter due to unplanned repairs on several major units.  The Maya 2-1-1 industry benchmark crack spread decreased by $4.22 per barrel, averaging $18.55 per barrel. The cost of Renewable Identification Numbers (RINs) to meet U.S. renewable fuel standards increased by approximately $10 million versus the third quarter 2015.

Three months ended December 31, 2015 versus three months ended December 31, 2014 – EBITDA increased $35 million versus the fourth quarter 2014, excluding a favorable $217 million quarter to quarter variance as a result of LCM inventory adjustments.  Fourth quarter 2015 throughput was down by 60,000 barrels per day from the prior year period. The Maya 2-1-1 industry benchmark crack spread increased by $0.83 per barrel, averaging $18.55 per barrel.  Compared to the 2014 period, refinery margins decreased.  The cost of RINs was relatively unchanged relative to the fourth quarter 2014.

Full year ended December 31, 2015 versus full year ended December 31, 2014 – EBITDA increased $110 million versus 2014, excluding a favorable $167 million year to year variance as a result of LCM inventory adjustments.  Throughput at the Houston Refinery averaged 238,000 barrels per day, down 21,000 barrels per day. The Maya 2-1-1 industry benchmark crack spread decreased by $2.13 per barrel, averaging $22.30 per barrel. The refinery benefited from improved secondary product margins and higher Canadian crude volumes.  The cost of RINs was relatively unchanged in 2015 relative to 2014.

Technology Segment – 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

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$54

$34

$29

$197

$171

EBITDA

65

45

44

243

232

 

Three months ended December 31, 2015 versus three months ended September 30, 2015 – EBITDA increased by $20 million driven by the timing of licensing revenue in the fourth quarter and favorable catalyst volumes.

Three months ended December 31, 2015 versus three months ended December 31, 2014 – EBITDA increased by $21 million due to higher catalyst volumes.

Full year ended December 31, 2015 versus full year ended December 31, 2014 – EBITDA exceeded 2014 by $11 million, improving to a record level.

Capital Spending and Cash Balances

Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $483 million during the fourth quarter 2015 and $1.4 billion for the full year 2015. Our cash and liquid investment balance was $2.4 billion at December 31, 2015. We repurchased 12.7 million ordinary shares during the fourth quarter 2015 and 51.8 million shares during 2015. There were 440 million common shares outstanding as of December 31, 2015.  The company paid dividends of $1.4 billion during 2015.

CONFERENCE CALL

LyondellBasell will host a conference call February 2 at 11 a.m. ET.  Participants on the call will include Chief Executive Officer Bob Patel, Executive Vice President and Chief Financial Officer Thomas Aebischer, 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 February 2 until March 2 at 11:59 p.m. ET.  The replay dial-in numbers are 866-465-1311 (U.S.) and +1 203-369-1427 (international). The pass code for each is 22160.

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 56 sites in 19 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 related to our use of LIFO accounting and the recent decline in pricing for many of our raw material and finished goods inventories. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA and earnings and EBITDA excluding LCM, provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization.  EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a measure of our liquidity.  We have also presented financial information herein exclusive of adjustments for LCM. 

Quantitative reconciliations of EBITDA to net income, the most comparable GAAP measure, are provided in Table 8 at the end of this release.

OTHER FINANCIAL MEASURE PRESENTATION NOTES

This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.

Table 7 - Reconciliation of Segment Information to Consolidated Financial Information (a)

2014

2015

(Millions of U.S. dollars)

Q1

Q2

Q3

Q4

Total

Q1

Q2

Q3

Q4

YTD

Sales and other operating revenues:

Olefins & Polyolefins - Americas

$

3,357

$

3,462

$

3,750

$

3,379

$

13,948

$

2,551

$

2,679

$

2,516

$

2,218

$

9,964

Olefins & Polyolefins - EAI

3,778

4,069

3,995

3,361

15,203

2,911

3,061

2,932

2,672

11,576

Intermediates & Derivatives

2,429

2,706

2,691

2,304

10,130

1,918

2,159

2,039

1,656

7,772

Refining

2,756

3,250

3,146

2,558

11,710

1,607

2,102

1,693

1,155

6,557

Technology

136

144

107

110

497

136

107

100

122

465

Other/elims

(1,321)

(1,514)

(1,623)

(1,422)

(5,880)

(938)

(963)

(946)

(752)

(3,599)

Continuing Operations

$

11,135

$

12,117

$

12,066

$

10,290

$

45,608

$

8,185

$

9,145

$

8,334

$

7,071

$

32,735

Operating income (loss):

Olefins & Polyolefins - Americas

$

656

$

898

$

1,068

$

950

$

3,572

$

934

$

920

$

740

$

662

$

3,256

Olefins & Polyolefins - EAI

225

190

223

246

884

236

359

412

302

1,309

Intermediates & Derivatives

316

375

321

208

1,220

271

405

403

145

1,224

Refining

86

95

67

(354)

(106)

74

119

52

(101)

144

Technology

60

56

26

29

171

64

45

34

54

197

Other

(3)

(1)

1

(2)

(5)

(4)

(3)

9

(10)

(8)

Continuing Operations

$

1,340

$

1,613

$

1,706

$

1,077

$

5,736

$

1,575

$

1,845

$

1,650

$

1,052

$

6,122

Depreciation and amortization:

Olefins & Polyolefins - Americas

$

73

$

74

$

84

$

85

$

316

$

86

$

85

$

87

$

95

$

353

Olefins & Polyolefins - EAI

70

67

65

46

248

55

54

54

56

219

Intermediates & Derivatives

55

56

55

59

225

60

56

55

62

233

Refining

42

42

42

43

169

74

40

41

41

196

Technology

16

15

16

14

61

12

12

11

11

46

Continuing Operations

$

256

$

254

$

262

$

247

$

1,019

$

287

$

247

$

248

$

265

$

1,047

EBITDA: (b)

Olefins & Polyolefins - Americas

$

736

$

978

$

1,157

$

1,040

$

3,911

$

1,031

$

1,014

$

841

$

775

$

3,661

Olefins & Polyolefins - EAI

356

319

343

348

1,366

357

492

549

427

1,825

Intermediates & Derivatives

375

430

383

271

1,459

337

466

460

212

1,475

Refining

129

137

110

(311)

65

149

159

93

(59)

342

Technology

76

71

41

44

232

76

57

45

65

243

Other

(4)

6

1

14

17

2

(2)

13

(26)

(13)

Continuing Operations

$

1,668

$

1,941

$

2,035

$

1,406

$

7,050

$

1,952

$

2,186

$

2,001

$

1,394

$

7,533

Capital, turnarounds and IT deferred spending:

Olefins & Polyolefins - Americas

$

231

$

306

$

208

$

167

$

912

$

149

$

140

$

159

$

220

$

668

Olefins & Polyolefins - EAI

33

27

45

86

191

38

27

49

72

186

Intermediates & Derivatives

45

52

50

94

241

76

76

135

154

441

Refining

32

20

27

44

123

33

28

23

24

108

Technology

2

6

6

11

25

6

3

7

8

24

Other

- -

4

2

1

7

4

4

- -

5

13

Continuing Operations

$

343

$

415

$

338

$

403

$

1,499

$

306

$

278

$

373

$

483

$

1,440

(a) 

EBITDA as presented herein includes the impacts of pre-tax LCM charges of $45 million and $715 million in the third and fourth quarters of 2014, respectively. EBITDA includes pre-tax LCM charges of $92 million, $181 million and $284 million for the first, third and fourth quarters of 2015, respectively. 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

Q3

Q4

YTD

Net income (a)

$

944

$

1,176

$

1,257

$

791

$

4,168

$

1,164

$

1,329

$

1,186

$

795

$

4,474

(Income) loss from discontinued operations, net of tax

(1)

(3)

3

5

4

3

(3)

3

2

5

Income from continuing operations(a)

943

1,173

1,260

796

4,172

1,167

1,326

1,189

797

4,479

Provision for income taxes

383

425

434

298

1,540

440

541

487

262

1,730

Depreciation and amortization

256

254

262

247

1,019

287

247

248

265

1,047

Interest expense, net

86

89

79

65

319

58

72

77

70

277

EBITDA(b)

$

1,668

$

1,941

$

2,035

$

1,406

$

7,050

$

1,952

$

2,186

$

2,001

$

1,394

$

7,533

(a)

Amounts presented herein include after-tax LCM charges of $28 million and $455 million in the third and fourth quarters of 2014, respectively. The impacts of after-tax LCM charges were $58 million, $114 million and $185 million in the first, third and fourth quarters of 2015, respectively. 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 and $715 million in the third and fourth quarters of 2014, respectively. EBITDA includes impacts of pre-tax LCM charges of $92 million, $181 million and $284 million in the first, third and fourth quarters of 2015, respectively. 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

Q3

Q4

YTD

Olefins and Polyolefins - Americas

Volumes (million pounds)

Ethylene produced

1,979

1,721

2,301

2,458

8,459

2,364

2,415

2,514

2,391

9,684

Propylene produced

611

648

559

719

2,537

805

740

697

798

3,040

Polyethylene sold

1,517

1,363

1,603

1,451

5,934

1,473

1,575

1,577

1,578

6,203

Polypropylene sold

627

605

681

592

2,505

627

698

662

606

2,593

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

45.36

42.16

48.71

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

104.36

105.55

101.03

76.58

96.92

52.84

62.93

50.20

43.53

52.36

Natural gas (USD per million BTUs)

5.01

4.74

4.19

4.09

4.51

2.76

2.76

2.72

2.11

2.57

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

20.0

17.1

14.5

10.5

15.4

10.2

9.7

9.6

10.9

10.1

U.S. ethylene (cents/pound)

48.3

47.2

51.8

44.8

48.0

34.8

34.2

30.3

27.5

31.7

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

76.3

77.0

78.0

76.7

77.0

65.7

67.3

64.3

57.0

63.6

U.S. propylene (cents/pound)

73.3

69.7

70.8

69.8

70.9

49.7

41.7

33.2

31.3

39.0

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

88.3

84.7

86.3

85.8

86.3

67.7

61.7

59.3

62.7

62.8

Olefins and Polyolefins - Europe, Asia, International

Volumes (million pounds)

Ethylene produced

989

1,024

1,039

1,059

4,111

1,007

1,047

944

978

3,976

Propylene produced

582

617

629

618

2,446

600

632

575

575

2,382

Polyethylene sold

1,275

1,363

1,284

1,254

5,176

1,533

1,360

1,304

1,379

5,576

Polypropylene sold

1,509

1,707

1,633

1,561

6,410

1,817

1,529

1,673

1,757

6,776

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

14.4

22.5

20.8

Western Europe ethylene

54.7

52.8

54.1

48.7

52.6

39.3

47.1

46.6

41.4

43.6

Western Europe polyethylene [high density]

56.1

54.8

55.4

51.5

54.5

45.2

60.6

61.2

56.9

56.0

Western Europe propylene

51.3

52.2

51.9

46.5

50.5

37.1

44.4

41.7

31.0

38.5

Western Europe polypropylene [homopolymer]

59.9

61.3

61.4

57.0

59.9

49.8

62.5

59.3

47.4

54.7

Intermediates and Derivatives

Volumes (million pounds)

Propylene oxide and derivatives

772

726

768

781

3,047

870

751

697

682

3,000

Ethylene oxide and derivatives

262

319

211

226

1,018

268

312

282

237

1,099

Styrene monomer

683

870

933

870

3,356

903

735

904

889

3,431

Acetyls

683

592

613

619

2,507

547

810

733

623

2,713

TBA Intermediates

416

391

461

384

1,652

433

321

421

371

1,546

Volumes (million gallons)

MTBE/ETBE

188

266

245

216

915

229

299

268

258

1,054

Benchmark Market Margins  (cents per gallon)

MTBE - Northwest Europe

63.4

90.7

111.8

109.1

94.0

64.0

106.0

119.0

49.8

85.1

Refining

Volumes (thousands of barrels per day)

Heavy crude oil processing rate

247

257

264

266

259

241

255

249

206

238

Benchmark Market Margins

Light crude oil - 2-1-1

13.18

17.29

14.20

8.50

13.32

15.02

16.42

15.29

9.44

14.04

Light crude oil - Maya differential

15.08

9.72

10.15

9.22

11.11

8.72

7.56

7.48

9.11

8.26

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

Q3

Q4

YTD

Sales and other operating revenues

$

11,135

$

12,117

$

12,066

$

10,290

$

45,608

$

8,185

$

9,145

$

8,334

$

7,071

$

32,735

Cost of sales(a)

9,577

10,255

10,118

8,989

38,939

6,379

7,047

6,465

5,792

25,683

Selling, general and administrative expenses

186

215

211

194

806

205

228

194

201

828

Research and development expenses

32

34

31

30

127

26

25

25

26

102

Operating income(a)

1,340

1,613

1,706

1,077

5,736

1,575

1,845

1,650

1,052

6,122

Income from equity investments

61

68

64

64

257

69

90

93

87

339

Interest expense, net

(86)

(89)

(79)

(65)

(319)

(58)

(72)

(77)

(70)

(277)

Other income, net

11

6

3

18

38

21

4

10

(10)

25

Income from continuing operations before income taxes(a)

1,326

1,598

1,694

1,094

5,712

1,607

1,867

1,676

1,059

6,209

Provision for income taxes

383

425

434

298

1,540

440

541

487

262

1,730

Income from continuing operations(b)

943

1,173

1,260

796

4,172

1,167

1,326

1,189

797

4,479

Income (loss) from discontinued operations, net of tax

1

3

(3)

(5)

(4)

(3)

3

(3)

(2)

(5)

Net income(b)

944

1,176

1,257

791

4,168

1,164

1,329

1,186

795

4,474

Net (income) loss attributable to non-controlling interests

1

2

1

2

6

2

1

(1)

- -

2

Net income attributable to the Company shareholders(b)

$

945

$

1,178

$

1,258

$

793

$

4,174

$

1,166

$

1,330

$

1,185

$

795

$

4,476

(a)

Amounts presented herein include pre-tax LCM charges of $45 million and $715 million in the third and fourth quarters of 2014, respectively. The impacts of pre-tax LCM charges were $92 million, $181 million and $284 million in the first, third and fourth quarters of 2015, respectively. 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 and $455 million in the third and fourth quarters of 2014, respectively. The impacts of after tax LCM were $58 million, $114 million and $185 million in the first, third and fourth quarters of 2015, respectively.  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

Q3

Q4

YTD

Pretax charges (benefits):

Settlement of environmental indemnification agreement

$

(52)

$

- -

$

- -

$

- -

$

(52)

$

- -

$

- -

$

- -

$

- -

$

- -

Lower of cost or market inventory adjustment

- -

- -

45

715

760

92

(9)

181

284

548

Emission allowance credits, amortization

- -

- -

- -

- -

- -

35

- -

- -

- -

35

Total pretax charges (benefits)

(52)

- -

45

715

708

127

(9)

181

284

583

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

- -

- -

(17)

(260)

(277)

(47)

3

(67)

(99)

(210)

After-tax effect of net charges (benefits)

$

(52)

$

- -

$

28

$

455

$

431

$

80

$

(6)

$

114

$

185

$

373

Effect on diluted earnings per share

$

0.09

$

- -

$

(0.05)

$

(0.91)

$

(0.82)

$

(0.17)

$

0.02

$

(0.25)

$

(0.42)

$

(0.80)

 

Table 12 - Unaudited Cash Flow Information

2014

2015

(Millions of U.S. dollars)

Q1

Q2

Q3

Q4

Total

Q1

Q2

Q3

Q4

YTD

Net cash provided by operating activities

$

801

$

1,797

$

1,434

$

2,016

$

6,048

$

1,468

$

1,446

$

1,768

$

1,160

$

5,842

Net cash provided by (used in) investing activities

(2,011)

(246)

(638)

(636)

(3,531)

(443)

(727)

67

52

(1,051)

Net cash used in financing activities

(550)

(2,217)

(1,621)

(1,519)

(5,907)

(401)

(1,021)

(1,684)

(1,744)

(4,850)

 

Table 13 - Unaudited Balance Sheet Information

 

(Millions of U.S. dollars)

March 31,

June 30,

September 30,

December 31,

March 31,

June 30,

September 30,

December 31,

2014

2014

2014

2014

2015

2015

2015

2015

Cash and cash equivalents

$

2,702

$

2,030

$

1,185

$

1,031

$

1,616

$

1,325

$

1,474

$

924

Restricted cash

3

2

- -

2

2

3

1

7

Short-term investments

1,402

1,299

1,544

1,593

1,478

1,989

1,602

1,064

Accounts receivable, net

4,141

4,264

4,105

3,448

3,089

3,373

2,924

2,517

Inventories

5,589

5,326

5,359

4,517

4,267

4,179

4,138

4,051

Prepaid expenses and other current assets(a)

1,156

784

739

1,054

1,195

1,121

1,059

1,226

Total current assets

14,993

13,705

12,932

11,645

11,647

11,990

11,198

9,789

Property, plant and equipment, net

8,556

8,740

8,600

8,758

8,430

8,636

8,793

8,991

Investments and long-term receivables:

Investment in PO joint ventures

424

418

397

384

373

357

357

397

Equity investments

1,693

1,702

1,690

1,636

1,581

1,612

1,602

1,608

Other investments and long-term receivables

62

58

54

44

38

126

125

122

Goodwill

605

602

576

566

533

543

543

536

Intangible assets, net

870

838

799

769

695

671

644

640

Other assets (a)(b)

556

528

520

419

637

600

605

674

Total assets

$

27,759

$

26,591

$

25,568

$

24,221

$

23,934

$

24,535

$

23,867

$

22,757

Current maturities of long-term debt

$

3

$

3

$

2

$

4

$

4

$

3

$

3

$

4

Short-term debt

58

55

56

346

514

582

573

353

Accounts payable

3,642

3,690

3,431

3,064

2,631

2,755

2,450

2,182

Accrued liabilities

1,477

1,310

1,460

1,554

1,482

1,455

1,784

1,810

Deferred income taxes(a)

540

570

685

469

429

434

383

- -

Total current liabilities

5,720

5,628

5,634

5,437

5,060

5,229

5,193

4,349

Long-term debt (b)

6,698

6,701

6,690

6,695

7,677

7,658

7,674

7,671

Other liabilities

1,838

1,851

1,795

2,122

2,038

2,063

2,044

2,036

Deferred income taxes(a)

1,677

1,623

1,574

1,623

1,653

1,635

1,604

2,127

Stockholders' equity

11,791

10,753

9,843

8,314

7,478

7,927

7,328

6,550

Non-controlling interests

35

35

32

30

28

23

24

24

Total liabilities and stockholders' equity

$

27,759

$

26,591

$

25,568

$

24,221

$

23,934

$

24,535

$

23,867

$

22,757

(a)

Our prospective adoption of ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, in December 2015 resulted in the classification of our deferred taxes as of December 2015 as noncurrent.

(b)

In December 2015, we adopted ASU 2015-03, Interest–Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires the presentation of deferred issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of the debt liability. In December 2015, we also adopted, ASU 2015-15, Interest–Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which allows the classification of debt issuance costs related to line-of-credit arrangements as an asset to be amortized over the term of the agreement.  Accordingly, we have revised our presentation of long term debt for each period presented.

 

 

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SOURCE LyondellBasell Industries



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