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LYOL INDU : LyondellBasell Reports First-Quarter 2011 Results

05/02/2011 | 07:05am US/Eastern

ROTTERDAM, The Netherlands, May 2, 2011 /PRNewswire/ --

First-Quarter 2011 Highlights

    --  Net income of $660 million; Diluted earnings per share of $1.15
    --  Quarterly EBITDA of $1,402 million; 84 percent increase from fourth
        quarter 2010, 119 percent increase from first quarter 2010
    --  Sales of $12.3 billion, a 15 percent increase from fourth quarter 2010
    --  Margin expansion in global Olefins & Polyolefins, U.S. Refining, and
        Oxyfuels businesses
    --  Significant dividend from Saudi Arabian joint venture

LyondellBasell Industries (NYSE: LYB) today announced net income for the first quarter 2011 of $660 million, or $1.15 per share. First-quarter 2011 EBITDA was $1,402 million, an 84 percent increase from the fourth quarter 2010 figure which excludes a $323 million lower of cost or market (LCM) inventory adjustment. Sales in the first quarter were $12,252 million, an increase of 15 percent from the prior quarter.

Comparisons with the prior quarter and first quarter 2010 are available in the following table.


    Table 1 - Earnings Summary (a)
                                                    Three months ended
    Millions of U.S. dollars (except share
     data)                                   Mar. 31,  Dec. 31,   Mar. 31,
                                                 2011       2010      2010
    Sales and other operating revenues        $12,252    $10,610    $9,755
    Net income(b)                                 660        766         8
    Diluted earnings per share (U.S.
     dollars)                                    1.15       1.34        NA
    Diluted share count (millions)                569        566        NA
    EBITDA (c)                                  1,402      1,085       640
    EBITDA excluding 2010 LCM inventory
     valuation adjustments                      1,402        762       640
    -----------------------------------         -----        ---       ---
    (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)  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.

    Table 1 - Earnings Summary (a)
                                                    Three months ended
    Millions of U.S. dollars (except share
     data)                                   Mar. 31,  Dec. 31,   Mar. 31,
                                                 2011       2010      2010
    Sales and other operating revenues        $12,252    $10,610    $9,755
    Net income(b)                                 660        766         8
    Diluted earnings per share (U.S.
     dollars)                                    1.15       1.34        NA
    Diluted share count (millions)                569        566        NA
    EBITDA (c)                                  1,402      1,085       640
    EBITDA excluding 2010 LCM inventory
     valuation adjustments                      1,402        762       640
    -----------------------------------         -----        ---       ---
    (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)  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.

During the first quarter 2011, results improved across all business segments. Most notable were improvements in global Olefins & Polyolefins and the Refining & Oxyfuels segment as increased margins were realized in spite of significant crude oil price increases during the quarter.

In addition, results reflect the following:


    Table 2 - Charges (Benefits) Included in Net Income
                                                 Three months ended
    Millions of U.S. dollars (except share    Mar.     Dec.     Mar.
     data)                                     31,      31,      31,
                                               2011     2010     2010
    Pretax charges (benefits):
      Charge/(benefit) - Reorganization
       items                                     $2       $2    $(207)
      LCM inventory valuation adjustments         -     (323)       -
      Warrants - mark to market                  59       55        -
      Impairments                                 5       28        3
      Premiums and charges on early
       repayment of debt                          -       27        -
      Gain on sale of Flavors & Fragrances
       business                                   -      (64)       -
      Insurance settlement                      (34)       -        -
    Provision for (benefit from) income
     tax related to these items                  11      124       71
    After-tax effect of net charges
     (credits)                                   43     (151)    (133)
    Effect on diluted earnings per share      (0.08)   $0.27       NA
    ------------------------------------      -----    -----      ---

    Table 2 - Charges (Benefits) Included in Net Income
                                                 Three months ended
    Millions of U.S. dollars (except share    Mar.     Dec.     Mar.
     data)                                     31,      31,      31,
                                               2011     2010     2010
    Pretax charges (benefits):
      Charge/(benefit) - Reorganization
       items                                     $2       $2    $(207)
      LCM inventory valuation adjustments         -     (323)       -
      Warrants - mark to market                  59       55        -
      Impairments                                 5       28        3
      Premiums and charges on early
       repayment of debt                          -       27        -
      Gain on sale of Flavors & Fragrances
       business                                   -      (64)       -
      Insurance settlement                      (34)       -        -
    Provision for (benefit from) income
     tax related to these items                  11      124       71
    After-tax effect of net charges
     (credits)                                   43     (151)    (133)
    Effect on diluted earnings per share      (0.08)   $0.27       NA
    ------------------------------------      -----    -----      ---

"During the first quarter, we again demonstrated the earnings potential of our company as margins increased in nearly all businesses compared to the fourth quarter 2010 despite significant raw material pricing pressures," said LyondellBasell Chief Executive Officer Jim Gallogly. "Our EBITDA of $1.4 billion reflects solid operations, an improved cost structure and improving markets, particularly in the U.S.," Gallogly continued.

"In U.S. olefins operations, we continued to optimize plant operations to take advantage of low-cost ethane while in European olefins we saw a recovery of margins from depressed fourth quarter levels. We received an $82 million dividend from one of our Saudi Arabian joint ventures during the quarter. Our Intermediates & Derivatives segment delivered record quarterly results as higher propylene prices were largely passed through," said Gallogly. "In our Refining & Oxyfuels segment, we completed a major turnaround at our Houston refinery fluid catalytic cracker, and we are realizing the benefits of the upgrade. The Maya 211 spread increased more than $5 per barrel this quarter to nearly $24 per barrel, and oxyfuels spreads have rebounded from their typical winter lows," Gallogly said.

OUTLOOK

Commenting on the near-term outlook, Gallogly said, "The second quarter is off to a good start. Conditions experienced in the first quarter were maintained and, in some areas, improved during April. We continue to advance our internal programs and are taking another step towards reducing our debt by redeeming 10 percent of our outstanding 8% Notes due in 2017. On May 5, we will hold our Annual Meeting of shareholders in Rotterdam. Items to be voted upon at the meeting include expanding the Supervisory Board and initiating a dividend."

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
    Millions of U.S. dollars        Mar. 31,   Dec. 31,   Mar. 31,
                                         2011       2010       2010
    Operating income                     $421       $446       $145
    EBITDA                                484        505        274
    ------                                ---        ---        ---
    EBITDA excluding LCM charges          484        342        274
    ----------------------------          ---        ---        ---
    (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 Mar. 31, 2011 versus three months ended Dec. 31, 2010 - Excluding a $163 million non-cash LCM reversal in the fourth quarter 2010, underlying EBITDA increased $142 million versus the fourth quarter 2010. Olefins profitability improved approximately $70 million as an average ethylene sales price increase of approximately 2 cents per pound was coupled with an approximately 3 cent per pound decrease in the company's average cost-of-ethylene-production to drive margins higher. Higher sales volumes contributed to an approximately $30 million improvement of polyethylene (PE) results compared to fourth quarter 2010. Polypropylene (PP) profits for the first quarter increased approximately $10 million. Total polyolefins sales volumes were approximately equal to fourth-quarter volumes.

Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - O&P-Americas results improved significantly versus the first quarter 2010. Olefins results improved primarily due to improved margins. PE results improved approximately $140 million versus the prior year period largely due to significantly improved margins and increased volumes. PP results were largely unchanged compared to the prior year period.

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
    Millions of U.S. dollars        Mar. 31,   Dec. 31,   Mar. 31,
                                         2011       2010       2010
    Operating income (loss)              $179        $66        $71
    EBITDA                                333        125        152
    ------                                ---        ---        ---
    EBITDA excluding LCM charges          333        115        152
    ----------------------------          ---        ---        ---
    (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 Mar. 31, 2011 versus three months ended Dec. 30, 2010 - Excluding a $10 million non-cash LCM reversal in the fourth quarter 2010, EBITDA increased by $218 million versus the fourth quarter 2010. Olefins results improved approximately $100 million from the fourth quarter due to increased volumes and significantly improved margins. Polyethylene and polypropylene results were approximately equal to the prior period while PP compounding profits increased approximately $10 million from fourth quarter 2010 primarily as a result of increased volumes. An $82 million dividend received from our Saudi Ethylene and Polyethylene Company joint venture accounted for the majority of the $96 million of dividends received from joint ventures during the first quarter 2010.

Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - EBITDA increased $181 million versus the first quarter 2010. Improved olefins and polypropylene margins and increased dividends from joint ventures accounted for the majority of the improved performance compared to the prior year period. Increased sales volumes of most products also contributed to the improvement.

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
    Millions of U.S. dollars        Mar. 31,   Dec. 31,   Mar. 31,
                                         2011       2010       2010
    Operating income                     $234       $196       $123
    EBITDA                                270        228        196
    ------                                ---        ---        ---
    EBITDA excluding LCM charges          270        211        196
    ----------------------------          ---        ---        ---
    (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.  I&D
     results in Table 5 do not reflect the $64 million gain
     on the sale of the Flavors & Fragrances (F&F) business
     on December 22, 2010.  The $64 million gain appears as
     "Income (loss) from discontinued operations, net of tax"
     on the income statement (Table 11).

Three months ended Mar. 31, 2011 versus three months ended Dec. 30, 2010 - Excluding a non-cash LCM inventory reversal of $17 million in the fourth quarter 2010, EBITDA increased $59 million versus the fourth quarter 2010. Increased sales volumes, partially as a result of seasonal deicer sales, were partially offset by slightly lower margins in PO and PO derivatives. Intermediates profitability increased significantly versus the fourth quarter as ethylene oxide/ethylene glycol and TBA intermediates accounted for the majority of the improvement.

Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - I&D EBITDA increased $74 million compared to the first quarter 2010. PO and PO derivatives EBITDA increased primarily due to higher margins for most products. Improved Intermediates results versus the prior year period were mainly the result of higher sales volumes of most products and higher acetyls and ethylene oxide/ethylene glycol margins.

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
    Millions of U.S. dollars        Mar. 31,   Dec. 31,   Mar. 31,
                                         2011       2010       2010
    Operating income (loss)              $164       $144      $(128)
    EBITDA                                210        212          3
    EBITDA excluding LCM charges          210         79          3
    ----------------------------          ---        ---        ---
    (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.

    Table 6 - R&O Financial Overview (a)
                                           Three months ended
    Millions of U.S. dollars        Mar. 31,   Dec. 31,   Mar. 31,
                                         2011       2010       2010
    Operating income (loss)              $164       $144      $(128)
    EBITDA                                210        212          3
    EBITDA excluding LCM charges          210         79          3
    ----------------------------          ---        ---        ---
    (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 Mar. 31, 2011 versus three months ended Dec. 31, 2010 - Excluding a non-cash LCM reversal of $133 million in the fourth quarter 2010, EBITDA increased $131 million versus the fourth quarter 2010. Houston refinery financial performance improved approximately $80 million versus fourth quarter 2010. First-quarter Houston refinery results include a $34 million insurance settlement. Crude oil volume at the Houston refinery increased by approximately 25,000 barrels per day (9 percent of nameplate capacity) compared to the fourth quarter primarily due to the absence of unplanned outages experienced during the fourth quarter 2010. Refining margins improved as the average industry benchmark margin increased approximately $5 per barrel during the quarter. Also notable during the quarter was the completion of the Fluid Catalytic Cracking Unit (FCCU) turnaround at the Houston refinery. At the Berre refinery, volumes increased approximately 21,000 barrels per day while margins decreased slightly as naphtha price did not keep pace with increased crude oil costs. Oxyfuels results improved compared to the fourth quarter 2010 as seasonally higher margins accounted for the majority of the approximately $40 million EBITDA increase.

Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - Segment EBITDA increased $207 million versus the first quarter 2010. At the Houston refinery, an increase in the industry benchmark margin of approximately $8 per barrel was the primary contributor to the improved results. Berre refinery results were relatively unchanged. Oxyfuels results improved primarily as a result of strength in gasoline pricing versus the prior year period.

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
    Millions of U.S. dollars        Mar. 31,   Dec. 31,   Mar. 31,
                                         2011       2010       2010
    Operating income                      $66         $8        $31
    EBITDA                                 91         44         47
    ------                                ---        ---        ---
    EBITDA excluding LCM charges           91         44         47
    ----------------------------          ---        ---        ---
    (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 Mar. 31, 2011 versus three months ended Dec. 31, 2010 - Results improved due to increased polyolefin catalyst sales and licensing income and the absence of the $17 million fourth-quarter 2010 LIFO inventory adjustment.

Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - Results improved primarily due to increased licensing income versus the prior year period.

Liquidity

Company liquidity, which we define as cash and cash equivalents plus funds available through established lines of credit, was approximately $6.3 billion at Mar. 31, 2011. The $6.3 billion of liquidity consisted of approximately $4.4 billion cash, approximately $1.4 billion of undrawn funds available through the $1.75 billion asset-based loan facility and approximately $0.6 billion available through the euro 450 million European securitization facility.

Capital Spending

Capital expenditures, including maintenance turnaround, catalyst and information technology related expenditures, were $221 million during first quarter 2010.

CONFERENCE CALL

LyondellBasell will host a conference call today, May 2, 2011, at 10:30 a.m. ET. Participating on the call will be: Jim Gallogly, Chief Executive Officer; Kent Potter, Executive Vice President and Chief 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 9777386.

A replay of the call will be available from 2:00 p.m. ET May 2 to 8:00 a.m. ET on June 2. The replay dial-in numbers are 800-964-3620 (U.S.) and +1 203-369-3425 (international). The pass code for each is 5674.

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; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; current and 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 substantial 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 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.

Media Contact: David Harpole (713) 309-4125Investor Contact: Doug Pike (713) 309-4590


    Table 8 -Reconciliation of Segment Information to Consolidated
    Financial Information


                                   Predecessor          Successor
                                   -----------          ---------
                                                  2010              2011
                                                  ----              ----
     (Millions of U.S. dollars)        Q1        Q4                  Q1
     --------------------------        ---       ---                 ---
     Sales and other operating
      revenues: (a)
       Olefins & Polyolefins -
        Americas                       $3,020   $3,155            $3,572
       Olefins & Polyolefins -
        Europe, Asia,
        International                   3,119    3,342             3,988
       Intermediates & Derivatives      1,316    1,361             1,648
       Refining & Oxyfuels              3,415    4,051             4,720
       Technology                         110      133               139
       Other/elims                     (1,225)  (1,432)           (1,815)
                                       ------   ------            ------
         Total                         $9,755  $10,610           $12,252
                                       ======  =======           =======
     Operating income (loss):
      (a)
       Olefins & Polyolefins -
        Americas                         $145     $446              $421
       Olefins & Polyolefins -
        Europe, Asia,
        International                      71       66               179
       Intermediates & Derivatives        123      196               234
       Refining & Oxyfuels               (128)     144               164
       Technology                          31        8                66
       Other                              (59)     (16)                1
       Current cost adjustment            184        -                 -
                                          ---      ---               ---
         Total                           $367     $844            $1,065
                                         ====     ====            ======
     Depreciation and
      amortization:
       Olefins & Polyolefins -
        Americas                         $119      $58               $58
       Olefins & Polyolefins -
        Europe, Asia,
        International                      81       53                57
       Intermediates & Derivatives         69       28                34
       Refining & Oxyfuels                135       43                42
       Technology                          17       32                24
       Other                                3       (7)                -
                                          ---      ---               ---
         Total                           $424     $207              $215
                                         ====     ====              ====
     EBITDA: (a)(b)
       Olefins & Polyolefins -
        Americas                         $274     $505              $484
       Olefins & Polyolefins -
        Europe, Asia,
        International                     152      125               333
       Intermediates & Derivatives        196      228               270
       Refining & Oxyfuels                  3      212               210
       Technology                          47       44                91
       Other                              (32)     (29)               14
                                          ---      ---               ---
         Total EBITDA                     640    1,085             1,402
           2010 LCM inventory
            valuation adjustments           -     (323)                -
                                          ---     ----               ---
         Total excluding 2010 LCM
          inventory valuation
          adjustments                    $640     $762            $1,402
                                         ====     ====            ======
     Capital, turnarounds and IT
      deferred spending:
       Olefins & Polyolefins -
        Americas                          $69      $56               $66
       Olefins & Polyolefins -
        Europe, Asia,
        International                      59       43                42
       Intermediates & Derivatives          7       32                 5
       Refining & Oxyfuels                 64       52               101
       Technology                          10        9                 7
       Other                                4       12                 1
                                          ---      ---               ---
         Total                            213      204               222
       Deferred charges included
        above                             (74)      (4)               (1)
                                          ---      ---               ---
         Capital expenditures(c)         $139     $200              $221
                                         ====     ====              ====

    (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.


    Table 9 - Reconciliation of EBITDA to Net Income

                                          Predecessor
                                          -----------
                                                                  2009
                                                                  ----
     (Millions of U.S.
      dollars)                  Q1       Q2       Q3       Q4           YTD
     -----------------          ---      ---      ---      ---          ---
     Segment EBITDA:(a)
       Olefins & Polyolefins -
        Americas                   $20   $207   $272   $244       $743
       Olefins & Polyolefins -
        Europe, Asia,
        International               (5)   109    186     51        341
       Intermediates &
        Derivatives                148    110    143    134        535
       Refining & Oxyfuels          93     62    107     (7)       255
       Technology                   66    101     66     76        309
       Other                        68    (52)     9     28         53
                                   ---    ---    ---    ---        ---
     Total EBITDA                  390    537    783    526      2,236
                                   ---    ---    ---    ---      -----
     Total EBITDA excluding
      LCM inventory valuation
      adjustments                 $390   $537   $783   $526     $2,236
                                  ====   ====   ====   ====     ======

     Add:
       Income (loss) from
        equity investment          (20)    22   (168)   (15)      (181)
       Unrealized foreign
        exchange (loss) gain        15     98    141    (61)       193
     Deduct:
       Depreciation and
        amortization              (416)  (479)  (443)  (436)    (1,774)
       Impairment charge           - -     (5)   - -    (12)       (17)
       Reorganization items       (948)  (124)  (928)  (961)    (2,961)
       Interest expense, net      (425)  (498)  (441)  (413)    (1,777)
       Joint venture dividends
        received                    (2)    (7)   (12)    (5)       (26)
       Benefit from income
        taxes                      432     87    332    560      1,411
       Current cost adjustment
        to inventory               (41)    18     88    (36)        29
       Other                        (2)    (2)    (3)     3         (4)
                                   ---    ---    ---    ---        ---
     LyondellBasell
      Industries net loss       (1,017)  (353)  (651)  (850)    (2,871)
     Less: Net loss
      attributable to non-
      controlling interests          1      2      1      2          6
                                   ---    ---    ---    ---        ---
                               $(1,016) $(351) $(650) $(848)   $(2,865)
                               =======  =====  =====  =====    =======


    (a) For periods prior to May 1, 2010, Predecessor segment operating
    income and EBITDA were determined on a current cost basis.


    Table 9 - Reconciliation of EBITDA to Net Income

                               Predecessor        Successor Combined
                               -----------        --------- --------
                                                                 2010
                                                                 ----
                                  April 1
                                             - May 1 -
      (Millions of U.S.            April
       dollars)                Q1                  30   June 30        Q2
    -------------------        ---         ------     -------    ---
      Segment EBITDA: (a)
        Olefins & Polyolefins
         -Americas               $274          $216      $198     $414
        Olefins & Polyolefins
         -Europe, Asia,
         International            152            78       174      252
        Intermediates &
         Derivatives              196            56       128      184
        Refining & Oxyfuels         3            76        21       97
        Technology                 47            14        29       43
        Other                     (32)            8        72       80
                                  ---           ---       ---      ---
      Total EBITDA                640           448       622    1,070
                                  ---           ---       ---    -----
        2010 LCM inventory
         valuation adjustments    - -           - -       333      333
      Total EBITDA excluding
       LCM

        inventory valuation
         adjustments             $640          $448      $955   $1,403
                                 ====          ====      ====   ======

      Add:
        Income (loss) from
         equity investment         55            29        27       56
        Unrealized foreign
         exchange (loss) gain    (202)          (62)      (14)     (76)
        Gain on sale of
         Flavors and
         Fragrances business      - -           - -       - -      - -
      Deduct:
        2010 LCM inventory
         valuation adjustments    - -           - -     (333)     (333)
        Depreciation and
         amortization            (424)         (141)    (129)     (270)
        Impairment charge          (3)           (6)      - -       (6)
        Reorganization items      207         7,373        (8)   7,365
        Interest expense, net    (409)         (299)    (120)     (419)
        Joint venture
         dividends received       (13)           (5)      (28)     (33)
        (Provision for)
         benefit from income
         taxes                    (12)        1,135       (28)   1,107
        Fair value change in
         warrants                 - -           - -        17       17
        Current cost
         adjustment to
         inventory                184            15       - -       15
        Other                     (15)            9         8       17
                                  ---           ---       ---      ---
      LyondellBasell
       Industries                   8         8,496       347    8,843
      net income (loss)
      Less: Net (income)
       loss attributable to         2            58        (5)      53
      non-controlling
       interests                  ---           ---       ---      ---
                                  $10        $8,554      $342   $8,896
                                  ===        ======      ====   ======



                                  Successor         Predecessor
                                  ---------         -----------
                                                            2010
                                                            ----
                                                        Jan. 1 -
     (Millions of U.S.
      dollars)                 Q3           Q4          April 30
     -----------------        ---           ---         --------
     Segment EBITDA: (a)
       Olefins & Polyolefins
        -Americas                $492         $505          $490
       Olefins & Polyolefins
        -Europe, Asia,
        International             289          125           230
       Intermediates &
        Derivatives               243          228           252
       Refining & Oxyfuels        140          212            79
       Technology                  78           44            61
       Other                      (44)         (29)          (24)
                                  ---          ---           ---
     Total EBITDA               1,198        1,085         1,088
                                -----        -----         -----
       2010 LCM inventory
        valuation adjustments      32         (323)          - -
     Total EBITDA excluding
      LCM

       inventory valuation
        adjustments            $1,230         $762        $1,088
                               ======         ====        ======

     Add:
       Income (loss) from
        equity investment          29           30            84
       Unrealized foreign
        exchange (loss) gain       (7)          (1)         (264)
       Gain on sale of
        Flavors and
        Fragrances business       - -           64           - -
     Deduct:
       2010 LCM inventory
        valuation adjustments     (32)         323           - -
       Depreciation and
        amortization             (222)        (207)         (565)
       Impairment charge          - -          (28)           (9)
       Reorganization items       (13)          (2)        7,580
       Interest expense, net     (186)        (222)         (708)
       Joint venture
        dividends received          -           (6)          (18)
       (Provision for)
        benefit from income
        taxes                    (254)         112         1,123
       Fair value change in
        warrants                  (76)         (55)          - -
       Current cost
        adjustment to
        inventory                 - -          - -           199
       Other                       (2)          (4)           (6)
                                  ---          ---           ---
     LyondellBasell
      Industries                  467          766         8,504
     net income (loss)
     Less: Net (income)
      loss attributable to          7            5            60
     non-controlling
      interests                   ---          ---           ---
                                 $474         $771        $8,564
                                 ====         ====        ======



                                Successor         Combined    Successor
                                ---------         --------    ---------
                              2010           2011
                              ----           ----
                                 May 1 -
     (Millions of U.S.
      dollars)                   Dec. 31            YTD           Q1
     -----------------           -------            ---          ---
     Segment EBITDA: (a)
       Olefins & Polyolefins
        -Americas                    $1,195           $1,685         $484
       Olefins & Polyolefins
        -Europe, Asia,
        International                   588              818          333
       Intermediates &
        Derivatives                     599              851          270
       Refining & Oxyfuels              373              452          210
       Technology                       151              212           91
       Other                             (1)             (25)          14
                                        ---              ---          ---
     Total EBITDA                     2,905            3,993        1,402
                                      -----            -----        -----
       2010 LCM inventory
        valuation adjustments            42               42          - -
     Total EBITDA excluding
      LCM

       inventory valuation
        adjustments                  $2,947           $4,035       $1,402
                                     ======           ======       ======

     Add:
       Income (loss) from
        equity investment                86              170           58
       Unrealized foreign
        exchange (loss) gain            (22)            (286)          (3)
       Gain on sale of
        Flavors and
        Fragrances business              64               64          - -
     Deduct:
       2010 LCM inventory
        valuation adjustments           (42)             (42)         - -
       Depreciation and
        amortization                   (558)          (1,123)        (215)
       Impairment charge                (28)             (37)          (5)
       Reorganization items             (23)           7,557           (2)
       Interest expense, net           (528)          (1,236)        (155)
       Joint venture
        dividends received              (34)             (52)         (96)
       (Provision for)
        benefit from income
        taxes                          (170)             953         (263)
       Fair value change in
        warrants                       (114)            (114)         (59)
       Current cost
        adjustment to
        inventory                       - -              199          - -
       Other                              2               (4)          (2)
                                        ---              ---          ---
     LyondellBasell
      Industries                      1,580           10,084          660
     net income (loss)
     Less: Net (income)
      loss attributable to                7               67            3
     non-controlling
      interests                         ---              ---          ---
                                     $1,587          $10,151         $663
                                     ======          =======         ====


    Table 10 - Selected Segment Operating Information


                                                                  2010  2011
                                                                  ----  ----
                                                             Q1    Q4    Q1
                                                            ---   ---   ---
     Olefins and Polyolefins - Americas
       Volumes (million pounds)
       ------------------------
         Ethylene produced                                 2,019 2,152 2,089
         Propylene produced                                  755   695   769
         Polyethylene sold                                 1,330 1,347 1,415
         Polypropylene sold                                  615   611   593
       Benchmark Market Prices
       -----------------------
         West Texas Intermediate crude oil (USD per
          barrel)                                          78.88 85.24 94.60
         Natural gas (USD per million BTUs)                 5.36  4.17  4.19
         U.S. weighted average cost of ethylene production
          (cents/pound)                                     34.3  33.8  32.6
         U.S. ethylene (cents/pound)                        52.3  47.3  49.3
         U.S. polyethylene [high density] (cents/pound)     83.3  83.7  87.7
         U.S. propylene (cents/pound)                       61.5  57.3  71.7
         U.S. polypropylene [homopolymer] (cents/pound)     87.8  83.8 100.8

     Olefins and Polyolefins -Europe, Asia,
      International
       Volumes (million pounds)
       ------------------------
         Ethylene produced                                   861   913   997
         Propylene produced                                  509   560   608
         Polyethylene sold                                 1,239 1,275 1,314
         Polypropylene sold                                1,538 1,832 1,704
       Benchmark Market Prices
       -----------------------
         Western Europe weighted average cost of ethylene
          production (euro 0.01 per pound)                  28.7  35.7  34.7
         Western Europe ethylene (euro 0.01 per pound)      41.6  44.3  52.0
         Western Europe polyethylene [high density] (euro
          0.01 per pound)                                   51.4  52.5  62.1
         Western Europe propylene (euro 0.01 per pound)     38.9  42.6  50.8
         Western Europe polypropylene [homopolymer] (euro
          0.01 per pound)                                   51.3  58.9  66.6

     Intermediates and Derivatives
       Volumes (million pounds)
       ------------------------
         Propylene oxide and derivatives                     869   860   838
         Ethylene oxide and derivatives                      265   251   288
         Styrene monomer                                     589   685   852
         Acetyls                                             379   484   439
         TBA Intermediates                                   472   425   485

     Refining and Oxyfuels
       Volumes
       -------
         Houston Refining crude processing rate (thousands
          of barrels per day)                                263   233   258
         Berre Refinery crude processing rate (thousands
          of barrels per day)                                 73    80   101
         MTBE/ETBE sales volumes (million gallons)           189   218   196
       Benchmark Market Margins
       ------------------------
         WTI - 2-1-1 (USD per barrel)                       6.85  8.97 19.06
         WTI - Maya (USD per barrel)                        8.94  9.41  4.63
         Urals 4-1-2-1 (USD per barrel)                     5.91  6.64  7.81
         MTBE - Northwest Europe (cents per gallon)         48.2  18.4  58.0


    Source: CMAI, Bloomberg, LyondellBasell Industries


    Table 11 - Unaudited Income Statement Information


                                       Predecessor         Successor
                                       -----------         ---------
                                                      2010             2011
                                                      ----             ----
     (Millions of U.S. dollars,
      except per share data)               Q1         Q4                Q1
     --------------------------            ---        ---               ---
     Sales and other operating
      revenues                             $9,755  $10,610          $12,252
     Cost of sales                          9,130    9,494           10,943
     Selling, general and
      administrative expenses                 217      231              211
     Research and development
      expenses                                 41       41               33
                                              ---      ---              ---
       Operating income                       367      844            1,065
     Income from equity investments            55       30               58
     Interest expense, net                   (409)    (222)            (155)
     Other expense, net                      (200)     (60)             (43)
                                             ----      ---              ---
       Income (loss) before income
        taxes and reorganization items       (187)     592              925
     Reorganization items                     207       (2)              (2)
                                              ---      ---              ---
       Income before taxes                     20      590              923
     Provision for (benefit from)
      income taxes                             12     (112)             263
                                              ---     ----              ---
     Income from continuing
      operations                                8      702              660
     Income from discontinued
      operations, net of tax                  - -       64              - -
                                              ---      ---              ---
     Net income                                 8      766              660
     Less: Net loss attributable to
      non-controlling interests                 2        5                3
                                              ---      ---              ---
     Net income attributable to the
      Company                                 $10     $771             $663
                                              ===     ====             ====


    Table 12 - Unaudited Cash Flow Information


                                           Predecessor      Successor
                                           -----------      ---------
                                                         2010          2011
                                                         ----          ----
     (Millions of U.S. dollars)                Q1       Q4                Q1
     --------------------------                ---      ---              ---
     Net cash provided by (used in)
      operating activities                      $(373)   $728          $221

     Net cash used in investing activities       (127)    (46)        (216)

     Net cash provided by (used in)
      financing activities                        490  (1,239)           28


    Table 13 - Unaudited Balance Sheet Information


                                       Predecessor        Successor
                                       -----------        ---------
                                        Mar. 31,   Dec. 31,          Mar. 31,
     (Millions of U.S. dollars)              2010     2010             2011
     --------------------------              ----     ----             ----
     Cash and cash equivalents               $537   $4,222           $4,383
     Short-term investments                     2      - -              - -
     Accounts receivable, net               3,642    3,747            4,764
     Inventories                            3,590    4,824            5,726
     Prepaid expenses and other
      current assets                          932      986            1,100
                                              ---      ---            -----
       Total current assets                 8,703   13,779           15,973
     Property, plant and equipment,
      net                                  14,687    7,190            7,440
     Investments and long-term
      receivables:
       Investment in PO joint ventures        880      437              444
       Equity investments                   1,125    1,587            1,586
       Related party receivable                14       14               14
       Other investments and long-
        term receivables                       90       67               66
     Goodwill                                 - -      787              807
     Intangible assets, net                 1,748    1,360            1,344
     Other assets, net                        338      273              274
                                              ---      ---              ---
       Total assets                       $27,585  $25,494          $27,948
                                          =======  =======          =======

     Current maturities of long-
      term debt                              $487       $4             $253
     Short-term debt                        6,675       42               51
     Accounts payable                       2,213    2,761            4,099
     Accrued liabilities                    1,220    1,705            1,711
     Deferred income taxes                    163      244              246
                                              ---      ---              ---
       Total current liabilities           10,758    4,756            6,360
     Long-term debt                           304    6,036            5,805
     Other liabilities                      1,317    2,183            2,043
     Deferred income taxes                  2,012      923            1,027
     Liabilities subject to
      compromise                           22,058      - -              - -
     Stockholders' equity (deficit)        (8,975)  11,535           12,671
     Non-controlling interests                111       61               42
                                              ---      ---              ---
       Total liabilities and
        stockholders' equity (deficit)    $27,585  $25,494          $27,948
                                          =======  =======          =======

SOURCE LyondellBasell Industries

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