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8-K - FORM 8-K - LyondellBasell Industries N.V.h85353e8vk.htm
EX-99.2 - EX-99.2 - LyondellBasell Industries N.V.h85353exv99w2.htm
Exhibit 99.1
(LYONDELLBASSELL LOGO)   NEWS RELEASE
ROTTERDAM, Netherlands, Oct. 28, 2011
LyondellBasell Reports Record Third-Quarter 2011 Results
Strong Operations and Advantaged Asset Positions Drive Record
Quarterly Results
Third-Quarter 2011 Highlights
    Net income of $895 million; diluted earnings per share of $1.51; Sales of $13.3 billion
 
    Quarterly EBITDA of $1,788 million; 15 percent increase from second quarter 2011, 45 percent increase from third quarter 2010
 
    Excellent results across the portfolio, particularly in U.S. olefins and Refining & Oxyfuels businesses
 
    Closed third quarter with no net debt
 
    Initiated bond tender and covenant amendment effort
 
    Quarterly dividend doubled to 20 cents per share
     LyondellBasell Industries (NYSE: LYB) today announced net income for the third quarter 2011 of $895 million, or $1.51 per share. Third-quarter 2011 EBITDA was $1,788 million, a 15 percent increase from the second quarter 2011. Sales in the third quarter were $13,297 million.
     During the third quarter 2011, results improved over a very strong second quarter 2011. Improvements in the performance of U.S. olefins and the Refining & Oxyfuels segment were most notable.
Table 1 — Earnings Summary(a)
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars (except share data)   2011   2011   2010   2011   2010
Sales and other operating revenues
  $ 13,297     $ 14,042     $ 10,302     $ 39,591     $ 30,541  
Net income(b) (c)
    895       804       467       2,358       9,318  
Diluted earnings per share (U.S. dollars)
    1.51       1.38       0.84       4.12       N/A  
Diluted share count (millions)
    575       575       564       570       N/A  
EBITDA(d)
    1,788       1,553       1,198       4,743       2,908  
EBITDA excluding LCM inventory valuation adjustments
    1,788       1,553       1,230       4,743       3,273  
 
(a)   For all periods prior to May 1, 2010, EBITDA is calculated using a current cost inventory basis. For periods on and after May 1, 2010, net income and EBITDA are calculated using the LIFO (Last-In, First-Out) method of inventory accounting.
 
(b)   Includes net income (loss) attributable to non-controlling interests. See Table 11.
 
(c)   The nine months ended September 30, 2010 includes an $8,640 million after-tax gain on the discharge of liabilities subject to compromise related to emergence from Chapter 11 and fresh-start accounting adjustments.
 
(d)   See the end of this release for an explanation of the Company’s use of EBITDA and Table 9 for reconciliations of EBITDA to net income.
LyondellBasell Industries
www.lyondellbasell.com

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     In addition, results reflect the following:
Table 2 — Charges (Benefits) Included in Net Income
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars (except share data)   2011   2011   2010   2011   2010
Pretax charges (benefits):
                                       
Reorganization items
  $     $ 28     $ 13     $ 30     $ (28 )
Gain on discharge of liabilities subject to compromise
                            (13,617 )
Change in net assets resulting from application of fresh-start accounting
                            6,278  
Lower of cost or market inventory adjustment
                32             365  
Unplanned maintenance at the Houston refinery
                            14  
Sale of precious metals
          (41 )           (41 )      
Corporate restructurings
    14       61             75        
Environmental accruals
          16             16        
Asset retirement obligation
    10                   10        
Warrants — mark to market
    (22 )     (6 )     76       31       59  
Impairments
    26       13             44        
Charge related to dispute over environmental indemnity
                64               64  
Premiums and charges on early repayment of debt
          12             12        
Insurance settlement
                      (34 )      
Total pretax charges (benefits)
    28       83       185       143       (6,865 )
Provision for (benefit from) income tax related to these items
    (14 )     (21 )     (13 )     (24 )     (1,062 )
After-tax effect of net charges (credits)
  $ 14     $ 62     $ 172     $ 119     $ (7,927 )
Effect on diluted earnings per share
  $ (0.02 )   $ (0.11 )   $ 0.30     $ (0.21 )     N/A  
     “We earned $895 million during the third quarter and eclipsed our previous record quarterly net income set last quarter. EBITDA during the quarter was nearly $1.8 billion — also a record,” said Jim Gallogly, LyondellBasell Chief Executive Officer.
     “In U.S. olefins, we benefited from both very strong ethane- and naphtha-based ethylene margins. Our Midwest ethylene plants were especially advantaged,” added Gallogly. “We achieved good results in our Olefins & Polyolefins — Europe, Asia, International segment due to our differentiated positions in polypropylene compounding, butadiene and our joint ventures. Intermediates & Derivatives continued its strong, stable performance with EBITDA margins of 18%. Results for Refining & Oxyfuels were particularly strong as the Houston refinery operated above nameplate capacity, and we took full advantage of our flexibility optimizing the crude oil feed slate,” he said.
     “Our strong results over the last year and a half have enabled us to close the quarter with no net debt and begin to restructure our balance sheet,” Gallogly said. Details on LyondellBasell’s plans to improve its capital structure can be found in a news release dated Oct. 20, 2011.
     “Additionally, we increased our dividend during the quarter, doubling it to 20 cents per share,” added Gallogly.
LyondellBasell Industries
www.lyondellbasell.com

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OUTLOOK
     “We are currently operating in a period of global economic uncertainty which has introduced significant raw material price and profit margin volatility. The volatility limits our near-term visibility, but our strategy of focusing on the basics and running our assets safely and efficiently has proven successful in any environment,” commented Gallogly.
     “Certain underlying fundamentals that have supported our business remain intact. A low ratio of U.S. natural gas to crude oil prices creates a favorable condition for our U.S. operations although ethane prices have increased in recent weeks. The spread between heavy and light crude oil continues to benefit the Houston refinery. We also have several businesses that have less volatile earnings such as our propylene oxide and polypropylene compounding businesses, and our Saudi joint ventures,” added Gallogly.
     “During the coming months, in addition to olefins chain margin volatility, we expect to see typical seasonal impacts in the Refining & Oxyfuels and polyolefins areas,” said Gallogly.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
     LyondellBasell operates in five business segments: 1) Olefins & Polyolefins — Americas; 2) Olefins & Polyolefins — Europe, Asia, International; 3) Intermediates & Derivatives; 4) Refining & Oxyfuels; and 5) Technology.
Olefins & 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 3 — O&P—Americas Financial Overview(a)
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars   2011   2011   2010   2011   2010
Operating income
  $ 599     $ 509     $ 448     $ 1,529     $ 917  
EBITDA
    673       578       492       1,735       1,180  
EBITDA excluding LCM charges
    673       578       518       1,735       1,377  
 
(a)   For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis. For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.
     Three months ended September 30, 2011 versus three months ended June 30, 2011 — O&P-Americas segment EBITDA increased $95 million versus the second quarter 2011. Olefins profitability improved approximately $155 million from the prior period. An ethylene sales price decrease of approximately 2 cents per pound was more than offset by an approximately 6 cents per pound decrease in the company’s average cost-of-ethylene-production metric. Ethylene production volume increased during the quarter primarily as a result of the return to service of one of the Channelview olefins plants which had undergone scheduled maintenance activity during the second quarter. Polyethylene (PE) results declined approximately $35 million chiefly as a result of lower sales prices. Polypropylene (PP)
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profits for the third quarter 2011 declined approximately $15 million primarily due to lower margins. We received $10 million of JV dividends in the third quarter 2011.
     Three months ended September 30, 2011 versus three months ended September 30, 2010 — O&P-Americas results increased $155 million versus the third quarter 2010 after excluding a third-quarter 2010 Lower of Cost or Market (LCM) charge of $26 million. Olefins results increased approximately $300 million compared to the prior year period largely as a result of significantly improved margins. This increase was partially offset by PE results which declined approximately $120 million compared to the third quarter 2010 as a result of lower margins caused by higher ethylene prices. PP results declined approximately $30 million compared to the third quarter 2010 due to lower sales volumes and margins.
Olefins & 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 4 — O&P—EAI Financial Overview(a)
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars   2011   2011   2010   2011   2010
Operating income
  $ 144     $ 207     $ 231     $ 530     $ 460  
EBITDA
    261       275       289       869       693  
EBITDA excluding LCM charges
    261       275       294       869       698  
 
(a)   For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis. For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.
     Three months ended September 30, 2011 versus three months ended June 30, 2011 — O&P-EAI segment EBITDA decreased $14 million versus the second quarter 2011. Olefins results declined approximately $55 million from the second quarter 2011 due to lower cracker margins and lower ethylene and co-product production volumes. Polyethylene results declined approximately $15 million from the prior period chiefly due to lower margins. Polypropylene results declined approximately $65 million due to lower margins. Polypropylene compounds results improved approximately $15 million from the second quarter 2011. We received $45 million of dividends from joint ventures during the third quarter 2011. Second quarter 2011 results included approximately $60 million of accruals related to a proposed European staff reorganization and possible environmental remediation charges.
     Three months ended September 30, 2011 versus three months ended September 30, 2010 — Excluding a $5 million third-quarter 2010 LCM adjustment, EBITDA declined $33 million versus the third quarter 2010. Underlying olefins results were relatively unchanged while polyethylene results declined approximately $20 million compared to the prior year period primarily as a result of lower margins. Polypropylene EBITDA fell approximately $90 million compared to
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the prior year. Third quarter 2010 results included a charge of approximately $43 million related to a dispute over an environmental indemnity.
Intermediates & 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, and ethylene oxide and its derivatives.
Table 5 — I&D Financial Overview(a)
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars   2011   2011   2010   2011   2010
Operating income
  $ 259     $ 235     $ 207     $ 728     $ 473  
EBITDA
    297       314       243       881       623  
EBITDA excluding LCM charges
    297       314       243       881       648  
 
(a)   For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis. For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.
     Three months ended September 30, 2011 versus three months ended June 30, 2011 — I&D segment EBITDA decreased $17 million versus the second quarter 2011. PO and PO derivatives results improved versus the prior period due to higher margins which were partially a result of industry outages. Underlying Intermediates profitability declined slightly versus the second quarter which included a $41 million gain on the sale of spent silver catalyst.
     Three months ended September 30, 2011 versus three months ended September 30, 2010 —I&D EBITDA increased $54 million compared to the third quarter 2010. PO and PO derivatives EBITDA improved versus the prior year period due to increased PO derivative margins. Increased acetyls and ethylene oxide / ethylene glycol volumes and margins also contributed to improved results compared to the third quarter 2010.
Refining & Oxyfuels (R&O) — The primary products of this segment include gasoline, diesel fuel, heating oil, jet fuel, petrochemical raw materials, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE).
Table 6 — R&O Financial Overview(a)
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars   2011   2011   2010   2011   2010
Operating income (loss)
  $ 454     $ 296     $ 83     $ 914     $ (2 )
EBITDA
    519       353       140       1,082       240  
EBITDA excluding LCM charges
    519       353       141       1,082       373  
 
(a)   For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis. For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.
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     Three months ended September 30, 2011 versus three months ended June 30, 2011 — Refining & Oxyfuels segment EBITDA increased $166 million versus the second quarter 2011. The Houston refinery financial performance improved approximately $135 million. Crude oil throughput at the Houston refinery increased to 269,000 barrels per day, slightly above nameplate capacity. Although the industry average benchmark margin declined approximately $2 per barrel during the quarter, margins at the Houston refinery expanded due to optimization of the crude oil mix. The Berre refinery continued to record a loss. A labor strike at the end of the third quarter 2011 had minimal impact on results. Oxyfuels results improved approximately $20 million due to improved margins.
     Three months ended September 30, 2011 versus three months ended September 30, 2010 — Excluding a $1 million LCM charge in the third quarter 2010, segment EBITDA increased $378 million versus the third quarter 2010. At the Houston refinery, EBITDA increased approximately $330 million versus the prior year period. A higher industry average benchmark margin and optimization of the crude oil feed slate drove results. Berre refinery results were relatively unchanged versus the prior year period. Oxyfuels results improved approximately $40 million between the periods mainly as a result of higher margins.
Technology Segment — The principal products of the Technology segment include polyolefin catalysts and production process technology licenses and related services.
Table 7 — Technology Financial Overview(a)
                                         
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
Millions of U.S. dollars   2011   2011   2010   2011   2010
Operating income
  $ 7     $ 23     $ 38     $ 96     $ 100  
EBITDA
    45       42       78       178       168  
EBITDA excluding LCM charges
    45       42       78       178       168  
 
(a)   For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis. For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.
     Three months ended September 30, 2011 versus three months ended June 30, 2011 — Catalyst results were relatively unchanged compared to the second quarter 2011.
     Three months ended September 30, 2011 versus three months ended September 30, 2010 — Catalyst results improved compared to the prior year period while licensing and technology services results declined compared to third quarter 2010.
Liquidity
     Company liquidity, which we define as cash and cash equivalents plus funds available through established lines of credit, was approximately $7.9 billion on Sept. 30, 2011. The cash balance was approximately $5.9 billion including restricted cash on Sept. 30, 2011.
LyondellBasell Industries
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Capital Spending
Capital expenditures, including maintenance turnaround, catalyst and information technology related expenditures, were $281 million during the third quarter 2011. This figure includes approximately $75 million for a pipeline acquisition.
CONFERENCE CALL
     LyondellBasell will host a conference call today, Oct. 28, 2011, at 11:00 a.m. ET. Participating on the call will be: Jim Gallogly, Chief Executive Officer; Karyn Ovelmen, Executive Vice President and Chief Financial Officer; Kent Potter, Principal Financial Officer; Sergey Vasnetsov, Senior Vice President — Strategic Planning and Transactions; and Doug Pike, Vice President of Investor Relations. The toll-free dial-in number in the U.S. is 888-982-4611. For international numbers, please go to our website, www.lyondellbasell.com/teleconference, for a complete listing of toll-free numbers by country. The pass code for all numbers is 7379598.
     A replay of the call will be available from 1:00 p.m. ET Oct. 28 to 11:00 p.m. ET on Nov. 28. The replay dial-in numbers are 800-789-9018 (U.S.) and +1 203-369-3337 (international). The pass code for each is 6798.
     A copy of the slides that accompany the call will be available on our website at http://www.lyondellbasell.com/earnings.
ABOUT LYONDELLBASELL
     LyondellBasell (NYSE: LYB) is one of the world’s largest plastics, chemical and refining companies. The company manufactures products at 58 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 components, home furnishings, construction materials and biofuels. 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 and natural gas; 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; legal and environmental proceedings;
LyondellBasell Industries
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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, 2010, 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.
NON-GAAP 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. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures 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. These 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.
We have included EBITDA in this press release, as we believe that EBITDA is a measure commonly used by investors. However, 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. For purposes of this release, EBITDA for predecessor periods means earnings before interest, taxes, depreciation, amortization and restructuring costs, as adjusted for other items management does not believe are indicative of the Company’s underlying results of operations such as impairment charges, reorganization items, the effect of mark-to-market accounting on our warrants and current cost inventory adjustments. EBITDA for successor periods means earnings before interest, taxes, depreciation and amortization, as adjusted for the same items, to the extent applicable in the successor periods. EBITDA also includes dividends from joint ventures. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternatives to operating cash flows as a measure of our liquidity.
     Reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures are provided in the financial tables at the end of this release.
OTHER FINANCIAL MEASURE PRESENTATION NOTES
     As a result of the Company’s reorganization proceedings and its emergence from Chapter 11, financial results are prepared and disclosed for a predecessor company for the time period before May 1, 2010, and the successor company for time periods after April 30, 2010, the date of emergence. For
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financial accounting purposes, the predecessor and successor companies are considered to be two separate entities. Further, the reorganization under Chapter 11 and the application of fresh-start accounting make comparisons of the predecessor and successor periods difficult. The primary impacts affecting the comparisons include (i) significant changes to our inventory valuations; (ii) lower depreciation and amortization expense; and (iii) lower interest expense. In connection with the application of fresh-start accounting, we were required to write our inventory up to fair market value, which was significant given the high crude oil prices at April 30, 2010. However, in the fourth quarter 2010, prices rose to levels close to those at April 30, 2010, and it became necessary to reverse significant portions of the LCM charges taken in the second and third quarters. The lower depreciation and amortization expenses in the successor period are the result of the revaluation of assets in connection with fresh-start accounting. Lower interest expense is the result of the substantial changes to the balance sheet as a result of the reorganization.
     Prior to emergence from Chapter 11, we utilized a combination of First-In, First-Out and Last-In, First-Out inventory methods for financial reporting. For purposes of evaluating segment results, management reviewed operating results using current cost, which approximates LIFO. As supplementary information, and for our segment reporting, we provide EBITDA information on a current cost basis for periods prior to our emergence from Chapter 11. Since emergence from Chapter 11, we have utilized the LIFO inventory methodology and EBITDA information for periods after our emergence is on a LIFO basis. The combined financial results and measures that are disclosed in this press release, including EBITDA, therefore use both current cost and LIFO methodologies.
     This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.
###
Source: LyondellBasell
Media Contact: David Harpole (713) 309-4125
Investor Contact: Doug Pike (713) 309-4590
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Table 8 — Reconciliation of Segment Information to Consolidated Financial Information
                                 
    2011  
(Millions of U.S. dollars)   Q1     Q2     Q3     YTD  
Sales and other operating revenues:
                               
Olefins & Polyolefins — Americas
  $ 3,572     $ 4,010     $ 3,875     $ 11,457  
Olefins & Polyolefins — Europe, Asia, International
    3,944       4,264       3,918       12,126  
Intermediates & Derivatives
    1,692       1,777       1,617       5,086  
Refining & Oxyfuels
    4,720       5,833       5,869       16,422  
Technology
    139       126       129       394  
Other/elims
    (1,815 )     (1,968 )     (2,111 )     (5,894 )
 
                       
Total
  $ 12,252     $ 14,042     $ 13,297     $ 39,591  
 
                       
Operating income (loss):
                               
Olefins & Polyolefins — Americas
  $ 421     $ 509     $ 599     $ 1,529  
Olefins & Polyolefins — Europe, Asia, International
    179       207       144       530  
Intermediates & Derivatives
    234       235       259       728  
Refining & Oxyfuels
    164       296       454       914  
Technology
    66       23       7       96  
Other
    1       (5 )     4        
Current cost adjustment
                       
 
                       
Total
  $ 1,065     $ 1,265     $ 1,467     $ 3,797  
 
                       
Depreciation and amortization:
                               
Olefins & Polyolefins — Americas
  $ 58     $ 59     $ 64     $ 181  
Olefins & Polyolefins — Europe, Asia, International
    57       66       69       192  
Intermediates & Derivatives
    34       37       35       106  
Refining & Oxyfuels
    42       46       48       136  
Technology
    24       16       21       61  
Other
                       
 
                       
Total
  $ 215     $ 224     $ 237     $ 676  
 
                       
EBITDA: (a)
                               
Olefins & Polyolefins — Americas
  $ 484     $ 578     $ 673     $ 1,735  
Olefins & Polyolefins — Europe, Asia, International
    333       275       261       869  
Intermediates & Derivatives
    270       314       297       881  
Refining & Oxyfuels
    210       353       519       1,082  
Technology
    91       42       45       178  
Other
    14       (9 )     (7 )     (2 )
 
                       
Total EBITDA
  $ 1,402     $ 1,553     $ 1,788     $ 4,743  
 
                       
Capital, turnarounds and IT deferred spending:
                               
Olefins & Polyolefins — Americas
  $ 66     $ 138     $ 149     $ 353  
Olefins & Polyolefins — Europe, Asia, International
    42       37       46       125  
Intermediates & Derivatives
    5       15       25       45  
Refining & Oxyfuels
    101       58       53       212  
Technology
    7       3       8       18  
Other
    1       10             11  
Total
    222       261       281       764  
 
                       
Deferred charges included above
    (1 )           (2 )     (3 )
 
                       
Capital expenditures
  $ 221     $ 261     $ 279     $ 761  
 
                       
 
(a)   See Table 9 for a reconciliation of total EBITDA, excluding LCM inventory valuation adjustments, to net income.
LyondellBasell Industries
www.lyondellbasell.com

10


 

Table 8 — Reconciliation of Segment Information to Consolidated Financial Information
                                                                 
    Predecessor     Successor     Combined     Successor     Predecessor     Successor     Combined  
    2010  
            April 1 -     May 1 -                     January 1 -     May 1 -        
(Millions of U.S. dollars)   Q1     April 30     June 30     Q2     Q3     April 30     September 30     YTD  
Sales and other operating revenues: (a)
                                                               
Olefins & Polyolefins — Americas
  $ 3,020     $ 1,163     $ 2,004     $ 3,167     $ 3,247     $ 4,183     $ 5,251     $ 9,434  
Olefins & Polyolefins — Europe, Asia, International
    3,119       1,066       2,140       3,206       3,247       4,105       5,387       9,492  
Intermediates & Derivatives
    1,316       504       940       1,444       1,453       1,820       2,393       4,213  
Refining & Oxyfuels
    3,415       1,333       2,403       3,736       3,867       4,748       6,270       11,018  
Technology
    110       35       75       110       157       145       232       377  
Other/elims
    (1,225 )     (389 )     (790 )     (1,179 )     (1,669 )     (1,534 )     (2,459 )     (3,993 )
 
                                               
Total
  $ 9,755     $ 3,712     $ 6,772     $ 10,484     $ 10,302     $ 13,467     $ 17,074     $ 30,541  
 
                                               
Operating income (loss): (a)
                                                               
Olefins & Polyolefins — Americas
  $ 145     $ 175     $ 149     $ 324     $ 448     $ 320     $ 597     $ 917  
Olefins & Polyolefins — Europe, Asia, International
    71       44       114       158       231       115       345       460  
Intermediates & Derivatives
    123       34       109       143       207       157       316       473  
Refining & Oxyfuels
    (128 )     29       14       43       83       (99 )     97       (2 )
Technology
    31       8       23       31       38       39       61       100  
Other
    (59 )     18       13       31       (19 )     (41 )     (6 )     (47 )
Current cost adjustment
    184       15             15             199             199  
 
                                               
Total
  $ 367     $ 323     $ 422     $ 745     $ 988     $ 690     $ 1,410     $ 2,100  
 
                                               
Depreciation and amortization:
                                                               
Olefins & Polyolefins — Americas
  $ 119     $ 41     $ 51     $ 92     $ 42     $ 160     $ 93     $ 253  
Olefins & Polyolefins — Europe, Asia, International
    81       26       33       59       60       107       93       200  
Intermediates & Derivatives
    69       22       23       45       30       91       53       144  
Refining & Oxyfuels
    135       45       9       54       55       180       64       244  
Technology
    17       6       6       12       40       23       46       69  
Other
    3       1       7       8       (5 )     4       2       6  
 
                                               
Total
  $ 424     $ 141     $ 129     $ 270     $ 222     $ 565     $ 351     $ 916  
 
                                               
EBITDA: (a)(b)
                                                               
Olefins & Polyolefins — Americas
  $ 274     $ 216     $ 198     $ 414     $ 492     $ 490     $ 690     $ 1,180  
Olefins & Polyolefins — Europe, Asia, International
    152       78       174       252       289       230       463       693  
Intermediates & Derivatives
    196       56       128       184       243       252       371       623  
Refining & Oxyfuels
    3       76       21       97       140       79       161       240  
Technology
    47       14       29       43       78       61       107       168  
Other
    (32 )     8       72       80       (44 )     (24 )     28       4  
 
                                               
Total EBITDA
    640       448       622       1,070       1,198       1,088       1,820       2,908  
LCM inventory valuation adjustments
                333       333       32             365       365  
 
                                               
Total excluding LCM inventory valuation adjustments
  $ 640     $ 448     $ 955     $ 1,403     $ 1,230     $ 1,088     $ 2,185     $ 3,273  
 
                                               
Capital, turnarounds and IT deferred spending:
                                                               
Olefins & Polyolefins — Americas
  $ 69     $ 20     $ 50     $ 70     $ 40     $ 89     $ 90     $ 179  
Olefins & Polyolefins — Europe, Asia, International
    59       43       31       74       32       102       63       165  
Intermediates & Derivatives
    7       5       5       10       39       12       44       56  
Refining & Oxyfuels
    64       15       22       37       34       79       56       135  
Technology
    10       2       3       5       7       12       10       22  
Other
    4       3       5       8       9       7       14       21  
 
                                               
Total
    213       88       116       204       161       301       277       578  
Deferred charges included above
    (74 )     (1 )     (3 )     (4 )     (8 )     (75 )     (11 )     (86 )
 
                                               
Capital expenditures(c)
  $ 139     $ 87     $ 113     $ 200     $ 153     $ 226     $ 266     $ 492  
 
                                               
 
(a)   For periods prior to May 1, 2010, Predecessor segment operating income and EBITDA were determined on a current cost basis. For periods following May 1, 2010, Successor operating income and EBITDA were determined using the LIFO method of inventory accounting.
 
(b)   See Table 9 for a reconciliation of total EBITDA, excluding LCM inventory valuation adjustments, to net income.
 
(c)   Deferred IT spending is excluded from capital expenditures for all periods presented. Turnarounds, which are classified as property, plant and equipment from May 1, 2010, were excluded from capital expenditures for periods prior to May 1, 2010.
LyondellBasell Industries
www.lyondellbasell.com

11


 

Table 9 — Reconciliation of EBITDA to Net Income
                                 
    Successor  
    2011  
(Millions of U.S. dollars)   Q1     Q2     Q3     YTD  
Segment EBITDA:
                               
Olefins & Polyolefins — Americas
  $ 484     $ 578     $ 673     $ 1,735  
Olefins & Polyolefins — Europe, Asia, International
    333       275       261       869  
Intermediates & Derivatives
    270       314       297       881  
Refining & Oxyfuels
    210       353       519       1,082  
Technology
    91       42       45       178  
Other
    14       (9 )     (7 )     (2 )
 
                       
Total EBITDA
    1,402       1,553       1,788       4,743  
LCM inventory valuation adjustments
                       
 
                       
Total EBITDA excluding LCM inventory valuation adjustments
    1,402       1,553       1,788       4,743  
 
                               
Add:
                               
Income from equity investment
    58       73       52       183  
Unrealized foreign exchange (loss) gain
    (3 )     4       (17 )     (16 )
Deduct:
                               
Depreciation and amortization
    (215 )     (224 )     (237 )     (676 )
Impairment charge
    (5 )     (13 )     (26 )     (44 )
Reorganization items
    (2 )     (28 )           (30 )
Interest expense, net
    (155 )     (164 )     (145 )     (464 )
Joint venture dividends received
    (96 )     (11 )     (55 )     (162 )
Provision for income taxes
    (263 )     (388 )     (489 )     (1,140 )
Fair value change in warrants
    (59 )     6       22       (31 )
Other
    (2 )     (5 )     2       (5 )
 
                       
LyondellBasell Industries net income
    660       803       895       2,358  
Less: Net loss attributable to non-controlling interests
    3       1             4  
 
                       
Net Income
  $ 663     $ 804     $ 895     $ 2,362  
 
                       
LyondellBasell Industries
www.lyondellbasell.com

12


 

Table 9 — Reconciliation of EBITDA to Net Income
                                                                         
    Predecessor     Successor     Combined     Successor     Predecessor     Successor     Combined  
    2010  
            April 1 -     May 1 -                             January 1 -     May 1 -        
(Millions of U.S. dollars)   Q1     April 30     June 30     Q2     Q3     Q4     April 30     September 30     YTD  
Segment EBITDA: (a)
                                                                       
Olefins & Polyolefins — Americas
  $ 274     $ 216     $ 198     $ 414     $ 492     $ 505     $ 490     $ 690     $ 1,180  
Olefins & Polyolefins — Europe, Asia, International
    152       78       174       252       289       125       230       463       693  
Intermediates & Derivatives
    196       56       128       184       243       228       252       371       623  
Refining & Oxyfuels
    3       76       21       97       140       212       79       161       240  
Technology
    47       14       29       43       78       44       61       107       168  
Other
    (32 )     8       72       80       (44 )     (29 )     (24 )     28       4  
 
                                                     
Total EBITDA
    640       448       622       1,070       1,198       1,085       1,088       1,820       2,908  
 
                                                     
LCM inventory valuation adjustments
                333       333       32       (323 )           365       365  
 
                                                     
Total EBITDA excluding LCM inventory valuation adjustments
    640       448       955       1,403       1,230       762       1,088       2,185       3,273  
 
                                                                       
Add:
                                                                       
Income from equity investment
    55       29       27       56       29       30       84       56       140  
Unrealized foreign exchange loss
    (202 )     (62 )     (14 )     (76 )     (7 )     (1 )     (264 )     (21 )     (285 )
Gain on sale of Flavors and Fragrances business
                                  64                    
Deduct:
                                                                       
LCM inventory valuation adjustments
                (333 )     (333 )     (32 )     323             (365 )     (365 )
Depreciation and amortization
    (424 )     (141 )     (129 )     (270 )     (222 )     (207 )     (565 )     (351 )     (916 )
Impairment charge
    (3 )     (6 )           (6 )           (28 )     (9 )           (9 )
Reorganization items
    207       7,181       (8 )     7,173       (13 )     (2 )     7,388       (21 )     7,367  
Interest expense, net
    (409 )     (299 )     (120 )     (419 )     (186 )     (222 )     (708 )     (306 )     (1,014 )
Joint venture dividends received
    (13 )     (5 )     (28 )     (33 )           (6 )     (18 )     (28 )     (46 )
(Provision for) benefit from income taxes
    (12 )     1,327       (28 )     1,299       (254 )     112       1,315       (282 )     1,033  
Fair value change in warrants
                17       17       (76 )     (55 )           (59 )     (59 )
Current cost adjustment to inventory
    184       15             15                   199             199  
Other
    (15 )     9       8       17       (2 )     (4 )     (6 )     6        
 
                                                     
LyondellBasell Industries net income
    8       8,496       347       8,843       467       766       8,504       814       9,318  
Less: Net (income) loss attributable to non-controlling interests
    2       58       (5 )     53       7       5       60       2       62  
 
                                                     
 
  $ 10     $ 8,554     $ 342     $ 8,896     $ 474     $ 771     $ 8,564     $ 816     $ 9,380  
 
                                                     
 
(a)   For periods prior to May 1, 2010, Predecessor segment operating income and EBITDA were determined on a current cost basis. For periods following May 1, 2010, Successor operating income and EBITDA were determined using the LIFO method of inventory accounting.
LyondellBasell Industries
www.lyondellbasell.com

13


 

Table 10 — Selected Segment Operating Information
                                                                 
    2010   2011
    Q1   Q2   Q3   YTD   Q1   Q2   Q3   YTD
Olefins and Polyolefins — Americas
                                                               
Volumes (million pounds)
                                                               
Ethylene produced
    2,019       1,998       2,184       6,201       2,089       1,929       2,134       6,152  
Propylene produced
    755       777       790       2,322       769       556       838       2,163  
Polyethylene sold
    1,330       1,320       1,472       4,122       1,405       1,377       1,368       4,150  
Polypropylene sold
    615       670       675       1,960       585       611       635       1,831  
Benchmark Market Prices
                                                               
West Texas Intermediate crude oil (USD per barrel)
    78.9       78.1       76.1       77.7       94.6       102.3       89.5       95.5  
Light Louisiana Sweet (“LLS”) crude oil (USD per barrel)
    80.0       82.2       79.6       80.6       107.8       118.3       112.5       113.2  
Natural gas (USD per million BTUs)
    5.4       4.0       4.4       4.6       4.2       4.4       4.3       4.3  
U.S. weighted average cost of ethylene production (cents/pound)
    34.3       26.7       25.2       28.7       32.6       33.8       34.3       33.6  
U.S. ethylene (cents/pound)
    52.3       45.6       38.3       45.4       49.3       57.5       55.8       54.2  
U.S. polyethylene [high density] (cents/pound)
    83.3       84.0       77.7       81.7       87.7       95.3       89.0       90.7  
U.S. propylene (cents/pound)
    61.5       63.3       56.2       60.3       71.7       87.3       76.5       78.5  
U.S. polypropylene [homopolymer] (cents/pound)
    87.8       89.8       82.7       86.8       100.8       113.8       103.0       105.9  
 
                                                               
Olefins and Polyolefins — Europe, Asia, International
                                                               
Volumes (million pounds)
                                                               
Ethylene produced
    861       842       994       2,697       997       999       926       2,922  
Propylene produced
    509       540       636       1,685       608       631       560       1,799  
Polyethylene sold
    1,239       1,230       1,316       3,785       1,305       1,279       1,349       3,933  
Polypropylene sold
    1,538       1,762       1,891       5,191       1,704       1,631       1,638       4,973  
Benchmark Market Prices
                                                               
Western Europe weighted average cost of ethylene production (€0.01 per pound)
    28.7       27.3       26.5       27.4       34.7       35.4       37.3       35.8  
Western Europe ethylene (€0.01 per pound)
    41.6       43.7       43.1       42.8       52.0       54.7       50.3       52.3  
Western Europe polyethylene [high density] (€0.01 per pound)
    51.4       53.8       52.4       52.5       62.1       65.9       59.9       62.6  
Western Europe propylene (€0.01 per pound)
    38.9       45.1       43.1       42.4       50.8       55.3       50.2       52.1  
Western Europe polypropylene [homopolymer] (€0.01 per pound)
    51.3       60.3       60.3       57.3       66.6       69.4       62.0       66.0  
 
                                                               
Intermediates and Derivatives
                                                               
Volumes (million pounds)
                                                               
Propylene oxide and derivatives
    869       781       872       2,522       838       791       758       2,387  
Ethylene oxide and derivatives
    265       250       206       721       288       277       281       846  
Styrene monomer
    589       780       827       2,196       852       817       714       2,383  
Acetyls
    379       439       405       1,223       439       417       411       1,267  
TBA Intermediates
    472       470       454       1,396       485       459       433       1,377  
 
                                                               
Refining and Oxyfuels
                                                               
Volumes
                                                               
Houston Refining crude processing rate (thousands of barrels per day)
    263       189       261       237       258       263       269       263  
Berre Refinery crude processing rate (thousands of barrels per day)
    73       99       99       90       101       85       79       88  
MTBE/ETBE sales volumes (million gallons)
    189       236       248       673       192       206       260       658  
Benchmark Market Margins
                                                               
Light crude oil - 2-1-1(a)
    6.85       10.45       7.60       8.31       19.06       10.28       9.54       8.64  
Light crude oil — Maya differential(a)
    8.94       9.54       8.54       9.00       4.63       15.50       13.99       15.85  
Urals 4-1-2-1 (USD per barrel)
    5.91       7.33       5.89       6.32       7.81       7.71       8.76       8.10  
MTBE — Northwest Europe (cents per gallon)
    49.3       46.2       44.3       46.6       58.9       92.7       94.1       81.8  
 
Source: CMAI, Bloomberg, LyondellBasell Industries
 
(a)   Prices prior to 2011 use WTI as the light crude benchmark. Beginning in 2011, LLS is used as the light crude benchmark.

14


 

Table 11 — Unaudited Income Statement Information
                                 
    Successor  
    2011  
(Millions of U.S. dollars)   Q1     Q2     Q3     YTD  
Sales and other operating revenues
  $ 12,252     $ 14,042     $ 13,297     $ 39,591  
Cost of sales
    10,943       12,474       11,538       34,955  
Selling, general and administrative expenses
    211       247       239       697  
Research and development expenses
    33       56       53       142  
 
                       
Operating income
    1,065       1,265       1,467       3,797  
Income from equity investments
    58       73       52       183  
Interest expense, net
    (155 )     (164 )     (145 )     (464 )
Other income (expense), net
    (43 )     45       10       12  
 
                       
Income before income taxes and reorganization items
    925       1,219       1,384       3,528  
Reorganization items
    (2 )     (28 )           (30 )
 
                       
Income before taxes
    923       1,191       1,384       3,498  
Provision for income taxes
    263       388       489       1,140  
 
                       
Net income
    660       803       895       2,358  
Less: Net loss attributable to non-controlling interests
    3       1             4  
 
                       
Net income attributable to the Company
  $ 663     $ 804     $ 895     $ 2,362  
 
                       

15


 

Table 11 — Unaudited Income Statement Information
                                                                 
    Predecessor     Successor     Combined     Successor     Predecessor     Successor     Combined  
    2010  
            April 1 -     May 1 -                     January 1 -     May 1 -        
(Millions of U.S. dollars)   Q1     April 30     June 30     Q2     Q3     April 30     September 30     YTD  
Sales and other operating revenues
  $ 9,755     $ 3,712     $ 6,772     $ 10,484     $ 10,302     $ 13,467     $ 17,074     $ 30,541  
Cost of sales
    9,130       3,284       6,198       9,482       9,075       12,414       15,273       27,687  
Selling, general and administrative expenses
    217       91       129       220       204       308       333       641  
Research and development expenses
    41       14       23       37       35       55       58       113  
 
                                               
Operating income
    367       323       422       745       988       690       1,410       2,100  
Income from equity investments
    55       29       27       56       29       84       56       140  
Interest expense, net
    (409 )     (299 )     (120 )     (419 )     (186 )     (708 )     (306 )     (1,014 )
Other income (expense), net
    (200 )     (65 )     54       (11 )     (97 )     (265 )     (43 )     (308 )
 
                                               
Income (loss) before income taxes and reorganization items
    (187 )     (12 )     383       371       734       (199 )     1,117       918  
Reorganization items
    207       7,181       (8 )     7,173       (13 )     7,388       (21 )     7,367  
 
                                               
Income before taxes
    20       7,169       375       7,544       721       7,189       1,096       8,285  
Provision for (benefit from) income taxes
    12       (1,327 )     28       (1,299 )     254       (1,315 )     282       (1,033 )
 
                                               
Net income
    8       8,496       347       8,843       467       8,504       814       9,318  
Less: Net (income) loss attributable to non-controlling interests
    2       58       (5 )     53       7       60       2       62  
 
                                               
Net income attributable to the Company
  $ 10     $ 8,554     $ 342     $ 8,896     $ 474     $ 8,564     $ 816     $ 9,380  
 
                                               
         
LyondellBasell Industries
    16  
www.lyondellbasell.com
       

 


 

Table 12 — Unaudited Cash Flow Information
                                 
    Successor
    2011
(Millions of U.S. dollars)   Q1   Q2   Q3   YTD
Net cash provided by operating activities
  $ 221     $ 1,026     $ 1,531     $ 2,778  
 
                               
Net cash used in investing activities
    (216 )     (435 )     (320 )     (971 )
 
                               
Net cash provided by (used in) financing activities
    28       (327 )     (118 )     (417 )
         
LyondellBasell Industries
    17  
www.lyondellbasell.com
       

 


 

Table 12 — Unaudited Cash Flow Information
                                                                 
    Predecessor   Successor   Combined   Successor   Predecessor   Successor   Combined
    2010
            April 1 -   May 1 -                   January 1 -   May 1-    
(Millions of U.S. dollars)   Q1   April 30   June 30   Q2   Q3   April 30   September 30   YTD
Net cash provided by (used in) operating activities
  $ (373 )   $ (552 )   $ 1,105     $ 553     $ 1,124     $ (925 )   $ 2,229     $ 1,304  
 
                                                               
Net cash used in investing activities
    (127 )     (97 )     (110 )     (207 )     (156 )     (224 )     (266 )     (490 )
 
                                                               
Net cash provided by (used in) financing activities
    490       2,825       133       2,958       (88 )     3,315       45       3,360  
         
LyondellBasell Industries
    18  
www.lyondellbasell.com
       

 


 

Table 13 — Unaudited Balance Sheet Information
                                                         
    Predecessor     Successor  
    March 31,     June 30,     September 30,     December 31,     March 31,     June 30,     September 30,  
(Millions of U.S. dollars)   2010     2010     2010     2010     2011     2011     2011  
Cash and cash equivalents
  $ 537     $ 3,753     $ 4,832     $ 4,222     $ 4,383     $ 4,687     $ 5,609  
Restricted cash
                                  250       292  
Short-term investments
    2                                      
Accounts receivable, net
    3,642       3,533       3,800       3,747       4,764       4,901       4,038  
Inventories
    3,590       4,372       4,412       4,824       5,726       5,577       5,682  
Prepaid expenses and other current assets
    932       1,016       885       986       1,100       1,098       1,097  
 
                                         
Total current assets
    8,703       12,674       13,929       13,779       15,973       16,513       16,718  
Property, plant and equipment, net
    14,687       6,839       7,216       7,190       7,440       7,569       7,363  
Investments and long-term receivables:
                                                       
Investment in PO joint ventures
    880       434       447       437       444       436       422  
Equity investments
    1,125       1,507       1,582       1,587       1,586       1,654       1,594  
Related party receivable
    14       13       14       14       14       19       4  
Other investments and long-term receivables
    90       77       54       67       66       63       67  
Goodwill
          1,061       1,105       595       807       621       598  
Intangible assets, net
    1,748       1,427       1,411       1,360       1,344       1,310       1,237  
Other assets, net
    338       257       272       273       274       290       264  
 
                                         
Total assets
  $ 27,585     $ 24,289     $ 26,030     $ 25,302     $ 27,948     $ 28,475     $ 28,267  
 
                                         
Current maturities of long-term debt
  $ 487     $ 8     $ 8     $ 4     $ 253     $ 2     $ 2  
Short-term debt
    6,675       557       518       42       51       50       49  
Accounts payable
    2,213       2,526       2,562       2,761       4,099       3,999       3,307  
Accrued liabilities
    1,220       1,199       1,513       1,705       1,711       1,613       1,505  
Deferred income taxes
    163       444       446       319       246       315       315  
 
                                         
Total current liabilities
    10,758       4,734       5,047       4,831       6,360       5,979       5,178  
Long-term debt
    304       6,745       6,799       6,036       5,805       5,813       5,782  
Other liabilities
    1,317       2,013       2,086       2,183       2,043       2,110       2,021  
Deferred income taxes
    2,012       867       1,155       656       1,027       947       1,204  
Liabilities subject to compromise
    22,058                                      
Stockholders’ equity (deficit)
    (8,975 )     9,868       10,882       11,535       12,671       13,579       14,025  
Non-controlling interests
    111       62       61       61       42       47       57  
 
                                         
Total liabilities and stockholders’ equity (deficit)
  $ 27,585     $ 24,289     $ 26,030     $ 25,302     $ 27,948     $ 28,475     $ 28,267  
 
                                         
         
LyondellBasell Industries
    19  
www.lyondellbasell.com