LyondellBasell Reports Record Quarterly Results

Jul 28, 2015, 07:00 ET from LyondellBasell Industries

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

Second Quarter 2015 Highlights

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

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

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

Table 1 - Earnings Summary

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

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

2015

2015

2014

2015

2014

Sales and other operating revenues

$9,145

$8,185

$12,117

$17,330

$23,252

Net income(a)

1,329

1,164

1,176

2,493

2,120

Income from continuing operations(b)

1,326

1,167

1,173

2,493

2,116

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

Net income(c)

2.82

2.41

2.23

5.22

3.94

Income from continuing operations(b)

2.81

2.42

2.22

5.22

3.93

Diluted share count (millions)

472

481

527

477

537

EBITDA(d)

2,186

1,952

1,941

4,138

3,609

Excluding LCM Impact:

LCM charges (benefits), pre-tax

(9)

92

- -

83

- -

Income from continuing operations(b)

1,320

1,225

1,173

2,545

2,116

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

Income from continuing operations(b)

2.79

2.54

2.22

5.33

3.93

EBITDA(d)

2,177

2,044

1,941

4,221

3,609

(a)

Includes net loss attributable to non-controlling interests and income (loss) from discontinued operations, net of tax. See Table 10.

(b)

Please see Table 11 for charges and benefits to income from continuing operations.

(c)

Includes diluted earnings per share attributable to discontinued operations.

(d)

See the end of this release for an explanation of the Company's use of EBITDA and Table 8 for reconciliations of EBITDA to net income and income from continuing operations.

_______________________________

1

LCM stands for "lower of cost or market." An explanation of LCM and why we have excluded it from our financial information in this press release can be found at the end of this press release under "Information Related to Financial Measures."

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

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

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

LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT LyondellBasell manages operations through five operating segments: 1) Olefins and Polyolefins – Americas; 2) Olefins and Polyolefins – Europe, Asia, International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.

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

Olefins and Polyolefins - Americas (O&P-Americas) – The primary products of this segment include ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins.

Table 2 - O&P–Americas Financial Overview

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$920

$934

$898

$1,854

$1,554

EBITDA

1,014

1,031

978

2,045

1,714

LCM charges (benefits), pre-tax

(21)

43

- -

22

- -

EBITDA excluding LCM adjustments

993

1,074

978

2,067

1,714

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

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

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

Table 3 - O&P–EAI Financial Overview

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$359

$236

$190

$595

$415

EBITDA

492

357

319

849

675

LCM charges (benefits), pre-tax

- -

- -

- -

- -

- -

EBITDA excluding LCM adjustments

492

357

319

849

675

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

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

Intermediates and Derivatives (I&D) – The primary products of this segment include propylene oxide (PO) and its co-products (styrene monomer, tertiary butyl alcohol (TBA), isobutylene and tertiary butyl hydroperoxide), and derivatives (propylene glycol, propylene glycol ethers and butanediol), acetyls (including methanol), ethanol, oxyfuels, and ethylene oxide and its derivatives.

Table 4 - I&D Financial Overview

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$405

$271

$375

$676

$691

EBITDA

466

337

430

803

805

LCM charges, pre-tax

17

44

- -

61

- -

EBITDA excluding LCM adjustments

483

381

430

864

805

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

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

Refining – The primary products of this segment include gasoline, diesel fuel, heating oil, jet fuel, and petrochemical raw materials.

Table 5 - Refining Financial Overview

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$119

$74

$95

$193

$181

EBITDA

159

149

137

308

266

LCM charges (benefits), pre-tax

(5)

5

- -

- -

- -

EBITDA excluding LCM adjustments

154

154

137

308

266

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

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

Technology – The principal products of the Technology segment include polyolefin catalysts and production process technology licenses and related services.

Table 6 - Technology Financial Overview

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

Millions of U.S. dollars

2015

2015

2014

2015

2014

Operating income

$45

$64

$56

$109

$116

EBITDA

57

76

71

133

147

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

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

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

CONFERENCE CALL LyondellBasell will host a conference call July 28 at 11 a.m. ET. Participants on the call will include Chief Executive Officer Bob Patel, Senior Vice President - Strategic Planning and Transactions Sergey Vasnetsov, and Vice President of Investor Relations Doug Pike.

The toll-free dial-in number in the U.S. is 888-677-1826. A complete listing of toll-free numbers by country is available at www.lyb.com/teleconference for international callers. The pass code for all numbers is 4843334.

The slides and webcast that accompany the call will be available at http://www.lyb.com/earnings.

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

ABOUT LYONDELLBASELL LyondellBasell (NYSE: LYB) is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell (www.lyb.com) manufactures products at 55 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.

FORWARD-LOOKING STATEMENTS The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2014, which can be found at www.lyb.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.

INFORMATION RELATED TO FINANCIAL MEASURES This release makes reference to certain "non-GAAP" financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. The non-GAAP measures we have presented include income from continuing operations excluding LCM, diluted earnings per share excluding LCM, EBITDA and EBITDA excluding LCM. LCM stands for "lower of cost or market," which is an accounting rule consistent with GAAP related to the valuation of inventory. Our inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out ("LIFO") inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than the market value, which results in us writing down the value of inventory to market value in accordance with the LCM rule, consistent with GAAP. This adjustment is somewhat unique to our 2010 company formation when all assets and liabilities were measured at fair value, our use of LIFO accounting, and the recent volatility in pricing for many of our raw material and finished goods inventories. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA and earnings and EBITDA excluding LCM, provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.

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

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

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

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

2014

2015

(Millions of U.S. dollars)

Q1

Q2

Q3

Q4

Total

Q1

Q2

YTD

Sales and other operating revenues:

Olefins & Polyolefins - Americas

$

3,357

$

3,462

$

3,750

$

3,379

$

13,948

$

2,551

$

2,679

$

5,230

Olefins & Polyolefins - EAI

3,778

4,069

3,995

3,361

15,203

2,911

3,061

5,972

Intermediates & Derivatives

2,429

2,706

2,691

2,304

10,130

1,918

2,159

4,077

Refining

2,756

3,250

3,146

2,558

11,710

1,607

2,102

3,709

Technology

136

144

107

110

497

136

107

243

Other/elims

(1,321)

(1,514)

(1,623)

(1,422)

(5,880)

(938)

(963)

(1,901)

Continuing Operations

$

11,135

$

12,117

$

12,066

$

10,290

$

45,608

$

8,185

$

9,145

$

17,330

Operating income (loss):

Olefins & Polyolefins - Americas

$

656

$

898

$

1,068

$

950

$

3,572

$

934

$

920

$

1,854

Olefins & Polyolefins - EAI

225

190

223

246

884

236

359

595

Intermediates & Derivatives

316

375

321

208

1,220

271

405

676

Refining

86

95

67

(354)

(106)

74

119

193

Technology

60

56

26

29

171

64

45

109

Other

(3)

(1)

1

(2)

(5)

(4)

(3)

(7)

Continuing Operations

$

1,340

$

1,613

$

1,706

$

1,077

$

5,736

$

1,575

$

1,845

$

3,420

Depreciation and amortization:

Olefins & Polyolefins - Americas

$

73

$

74

$

84

$

85

$

316

$

86

$

85

$

171

Olefins & Polyolefins - EAI

70

67

65

46

248

55

54

109

Intermediates & Derivatives

55

56

55

59

225

60

56

116

Refining

42

42

42

43

169

74

40

114

Technology

16

15

16

14

61

12

12

24

Continuing Operations

$

256

$

254

$

262

$

247

$

1,019

$

287

$

247

$

534

EBITDA: (b)

Olefins & Polyolefins - Americas

$

736

$

978

$

1,157

$

1,040

$

3,911

$

1,031

$

1,014

$

2,045

Olefins & Polyolefins - EAI

356

319

343

348

1,366

357

492

849

Intermediates & Derivatives

375

430

383

271

1,459

337

466

803

Refining

129

137

110

(311)

65

149

159

308

Technology

76

71

41

44

232

76

57

133

Other

(4)

6

1

14

17

2

(2)

- -

Continuing Operations

$

1,668

$

1,941

$

2,035

$

1,406

$

7,050

$

1,952

$

2,186

$

4,138

Capital, turnarounds and IT deferred spending:

Olefins & Polyolefins - Americas

$

231

$

306

$

208

$

167

$

912

$

149

$

140

$

289

Olefins & Polyolefins - EAI

33

27

45

86

191

38

27

65

Intermediates & Derivatives

45

52

50

94

241

76

76

152

Refining

32

20

27

44

123

33

28

61

Technology

2

6

6

11

25

6

3

9

Other

- -

4

2

1

7

4

4

8

Continuing Operations

$

343

$

415

$

338

$

403

$

1,499

$

306

$

278

$

584

(a)

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

(b)

See Table 8 for EBITDA calculation.

Table 8 - EBITDA Calculation

2014

2015

(Millions of U.S. dollars)

Q1

Q2

Q3

Q4

Total

Q1

Q2

YTD

Net income attributable to the Company shareholders(a)

$

945

$

1,178

$

1,258

$

793

$

4,174

$

1,166

$

1,330

$

2,496

Net loss attributable to non-controlling interests

(1)

(2)

(1)

(2)

(6)

(2)

(1)

(3)

(Income) loss from discontinued operations, net of tax

(1)

(3)

3

5

4

3

(3)

- -

Income from continuing operations(a)

943

1,173

1,260

796

4,172

1,167

1,326

2,493

Provision for income taxes

383

425

434

298

1,540

440

541

981

Depreciation and amortization

256

254

262

247

1,019

287

247

534

Interest expense, net

86

89

79

65

319

58

72

130

EBITDA(b)

$

1,668

$

1,941

$

2,035

$

1,406

$

7,050

$

1,952

$

2,186

$

4,138

(a)

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

(b)

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

Table 9 - Selected Segment Operating Information

2014

2015

Q1

Q2

Q3

Q4

Total

Q1

Q2

YTD

Olefins and Polyolefins - Americas

Volumes (million pounds)

Ethylene produced

1,979

1,721

2,301

2,458

8,459

2,364

2,415

4,779

Propylene produced

611

648

559

719

2,537

805

740

1,545

Polyethylene sold

1,377

1,334

1,486

1,360

5,557

1,347

1,425

2,772

Polypropylene sold

601

592

642

552

2,387

583

648

1,231

Benchmark Market Prices

West Texas Intermediate crude oil (USD per barrel)

98.61

102.99

97.25

73.20

92.91

48.57

57.95

53.34

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

104.36

105.55

101.03

76.58

96.92

52.84

62.93

57.97

Natural gas (USD per million BTUs)

5.01

4.74

4.19

4.09

4.51

2.76

2.76

2.76

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

20.0

17.1

14.5

10.5

15.4

10.2

9.7

10.0

U.S. ethylene (cents/pound)

48.3

47.2

51.8

44.8

48.0

34.8

34.2

34.5

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

76.3

77.0

78.0

76.7

77.0

65.7

67.3

66.5

U.S. propylene (cents/pound)

73.3

69.7

70.8

69.8

70.9

49.7

41.7

45.7

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

88.3

84.7

86.3

85.8

86.3

67.7

61.7

64.7

Olefins and Polyolefins - Europe, Asia, International

Volumes (million pounds)

Ethylene produced

989

1,024

1,039

1,059

4,111

1,007

1,047

2,054

Propylene produced

582

617

629

618

2,446

600

632

1,232

Polyethylene sold

1,275

1,363

1,284

1,254

5,176

1,533

1,360

2,893

Polypropylene sold

1,509

1,707

1,633

1,561

6,410

1,817

1,529

3,346

Benchmark Market Prices (€0.01 per pound)

Western Europe weighted average cost of ethylene production

32.9

34.3

31.5

18.2

29.2

22.9

23.2

23.0

Western Europe ethylene

54.7

52.8

54.1

48.7

52.6

39.3

47.1

43.2

Western Europe polyethylene [high density]

56.1

54.8

55.4

51.5

54.5

45.2

60.6

52.9

Western Europe propylene

51.3

52.2

51.9

46.5

50.5

37.1

44.4

40.7

Western Europe polypropylene [homopolymer]

59.9

61.3

61.4

57.0

59.9

49.8

62.5

56.1

Intermediates and Derivatives

Volumes (million pounds)

Propylene oxide and derivatives

772

726

768

781

3,047

870

751

1,621

Ethylene oxide and derivatives

262

319

211

226

1,018

268

312

580

Styrene monomer

683

870

933

870

3,356

903

735

1,638

Acetyls

683

592

613

619

2,507

547

810

1,357

TBA Intermediates

416

391

461

384

1,652

433

321

754

Volumes (million gallons)

MTBE/ETBE

188

266

245

216

915

229

299

528

Benchmark Market Margins (cents per gallon)

MTBE - Northwest Europe

63.4

90.7

111.8

109.1

94.0

64.0

106.0

85.3

Refining

Volumes (thousands of barrels per day)

Heavy crude oil processing rate

247

257

264

266

259

241

255

248

Benchmark Market Margins

Light crude oil - 2-1-1

13.18

17.29

14.20

8.50

13.32

15.02

16.42

15.74

Light crude oil - Maya differential

15.08

9.72

10.15

9.22

11.11

8.72

7.56

8.22

Source: LYB and third party consultants

Note: Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect discounted prices. Volumes presented represent third party sales of selected key products.

Table 10 - Unaudited Income Statement Information

2014

2015

(Millions of U.S. dollars)

Q1

Q2

Q3

Q4

Total

Q1

Q2

YTD

Sales and other operating revenues

$

11,135

$

12,117

$

12,066

$

10,290

$

45,608

$

8,185

$

9,145

$

17,330

Cost of sales(a)

9,577

10,255

10,118

8,989

38,939

6,379

7,047

13,426

Selling, general and administrative expenses

186

215

211

194

806

205

228

433

Research and development expenses

32

34

31

30

127

26

25

51

Operating income(a)

1,340

1,613

1,706

1,077

5,736

1,575

1,845

3,420

Income from equity investments

61

68

64

64

257

69

90

159

Interest expense, net

(86)

(89)

(79)

(65)

(319)

(58)

(72)

(130)

Other income, net

11

6

3

18

38

21

4

25

Income from continuing operations before income taxes(a)

1,326

1,598

1,694

1,094

5,712

1,607

1,867

3,474

Provision for income taxes

383

425

434

298

1,540

440

541

981

Income from continuing operations(b)

943

1,173

1,260

796

4,172

1,167

1,326

2,493

Income (loss) from discontinued operations, net of tax

1

3

(3)

(5)

(4)

(3)

3

- -

Net income(b)

944

1,176

1,257

791

4,168

1,164

1,329

2,493

Net loss attributable to non-controlling interest

1

2

1

2

6

2

1

3

Net income attributable to the Company shareholders(b)

$

945

$

1,178

$

1,258

$

793

$

4,174

$

1,166

$

1,330

$

2,496

(a)

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

(b)

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

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

2014

2015

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

Q1

Q2

Q3

Q4

Total

Q1

Q2

YTD

Pretax charges (benefits):

Settlement of environmental indemnification agreement

$

(52)

$

- -

$

- -

$

- -

$

(52)

$

- -

$

- -

$

- -

Lower of cost or market inventory adjustment

- -

- -

45

715

760

92

(9)

83

Emission allowance credits, amortization

- -

- -

- -

- -

- -

35

- -

35

Total pretax charges (benefits)

(52)

- -

45

715

708

127

(9)

118

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

- -

- -

(17)

(260)

(277)

(47)

3

(44)

After-tax effect of net charges (benefits)

$

(52)

$

- -

$

28

$

455

$

431

$

80

$

(6)

$

74

Effect on diluted earnings per share

$

0.09

$

- -

$

(0.05)

$

(0.91)

$

(0.82)

$

(0.17)

$

0.02

$

(0.16)

Table 12 - Unaudited Cash Flow Information

2014

2015

(Millions of U.S. dollars)

Q1

Q2

Q3

Q4

Total

Q1

Q2

YTD

Net cash provided by operating activities

$

801

$

1,797

$

1,434

$

2,016

$

6,048

$

1,468

$

1,446

$

2,914

Net cash used in investing activities

(2,011)

(246)

(638)

(636)

(3,531)

(443)

(727)

(1,170)

Net cash used in financing activities

(550)

(2,217)

(1,621)

(1,519)

(5,907)

(401)

(1,021)

(1,422)

Table 13 - Unaudited Balance Sheet Information

March 31,

June 30,

September 30,

December 31,

March 31,

June 30,

(Millions of U.S. dollars)

2014

2014

2014

2014

2015

2015

Cash and cash equivalents

$

2,702

$

2,030

$

1,185

$

1,031

$

1,616

$

1,325

Restricted cash

3

2

- -

2

2

3

Short-term investments

1,402

1,299

1,544

1,593

1,478

1,989

Accounts receivable, net

4,141

4,264

4,105

3,448

3,089

3,373

Inventories

5,589

5,326

5,359

4,517

4,267

4,179

Prepaid expenses and other current assets

1,156

784

739

1,054

1,195

1,121

Total current assets

14,993

13,705

12,932

11,645

11,647

11,990

Property, plant and equipment, net

8,556

8,740

8,600

8,758

8,430

8,636

Investments and long-term receivables:

Investment in PO joint ventures

424

418

397

384

373

357

Equity investments

1,693

1,702

1,690

1,636

1,581

1,612

Other investments and long-term receivables

62

58

54

44

38

126

Goodwill

605

602

576

566

533

543

Intangible assets, net

870

838

799

769

695

671

Other assets

624

593

583

481

709

670

Total assets

$

27,827

$

26,656

$

25,631

$

24,283

$

24,006

$

24,605

Current maturities of long-term debt

$

3

$

3

$

2

$

4

$

4

$

3

Short-term debt

58

55

56

346

514

582

Accounts payable

3,642

3,690

3,431

3,064

2,631

2,755

Accrued liabilities

1,477

1,310

1,460

1,554

1,482

1,455

Deferred income taxes

540

570

685

469

429

434

Total current liabilities

5,720

5,628

5,634

5,437

5,060

5,229

Long-term debt

6,766

6,766

6,753

6,757

7,749

7,728

Other liabilities

1,838

1,851

1,795

2,122

2,038

2,063

Deferred income taxes

1,677

1,623

1,574

1,623

1,653

1,635

Stockholders' equity

11,791

10,753

9,843

8,314

7,478

7,927

Non-controlling interests

35

35

32

30

28

23

Total liabilities and stockholders' equity

$

27,827

$

26,656

$

25,631

$

24,283

$

24,006

$

24,605

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SOURCE LyondellBasell Industries



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