LYOL INDU : LyondellBasell Reports First-Quarter 2011 Results
05/02/2011| 07:05am US/Eastern
Recommend:
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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