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 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