LYONDELLBASELL INDUSTRIES N.V. HOUSTON and LONDON, July 28, 2017 /PRNewswire/ --
Second Quarter 2017 Highlights
-- Income from continuing operations: $1.1 billion
-- EBITDA: $2.0 billion
-- Record quarterly diluted earnings per share: $2.82 per share
-- Record quarterly EBITDA for Olefins and Polyolefins - Europe, Asia, and
International: $699 million
-- Strong volume growth with a 27% increase in global ethylene production
and a 45% improvement in refining crude volumes over prior year
-- Dividends and share repurchases totaled $0.8 billion; repurchased 5.4
million shares during the second quarter
-- Increased second quarter 2017 dividend by 6% to $0.90 per share
Comparisons with the prior quarter and second quarter 2016 are available in the following table:
Table 1 - Earnings Summary
--------------------------
Three Months Ended Six Months Ended
------------------
June 30, March 31, June 30, June 30,
--------
Millions of U.S. dollars (except share data) 2017 2017 2016 2017 2016
------------------------------------------- ---- ---- ---- ---- ----
Sales and other operating revenues $8,403 $8,430 $7,328 $16,833 $14,071
---------------------------------- ------ ------ ------ ------- -------
Net income(a) 1,130 797 1,091 1,927 2,121
------------ ----- --- ----- ----- -----
Income from continuing operations(b) 1,134 805 1,092 1,939 2,122
----------------------------------- ----- --- ----- ----- -----
Diluted earnings per share (U.S. dollars):
------------------------------------------
Net income(c) 2.81 1.98 2.56 4.78 4.93
------------ ---- ---- ---- ---- ----
Income from continuing operations(b) 2.82 2.00 2.56 4.81 4.93
----------------------------------- ---- ---- ---- ---- ----
Diluted share count (millions) 402 403 425 403 429
----------------------------- --- --- --- --- ---
EBITDA(d) 1,970 1,617 1,783 3,587 3,590
-------- ----- ----- ----- ----- -----
Excluding LCM Impact:
---------------------
LCM benefit, pre-tax(e) - - - - (68) - - - -
---------------------- --- --- --- --- ---
Income from continuing operations(b) 1,134 805 1,045 1,939 2,122
----------------------------------- ----- --- ----- ----- -----
Diluted earnings per share (U.S. dollars):
------------------------------------------
Income from continuing operations(b) 2.82 2.00 2.45 4.81 4.93
----------------------------------- ---- ---- ---- ---- ----
EBITDA(d) 1,970 1,617 1,715 3,587 3,590
-------- ----- ----- ----- ----- -----
(a) Includes net
(income) loss
attributable
to non-
controlling
interests and
loss from
discontinued
operations,
net of tax.
See Table 10.
(b) See Table 11
for charges
and benefits
to income
from
continuing
operations.
(c) Includes
diluted
earnings
(loss) per
share
attributable
to
discontinued
operations.
(d) See the end of
this release
for an
explanation
of the
Company's use
of EBITDA and
Table 8 for
reconciliations
of EBITDA to
net income
and income
from
continuing
operations.
(e) LCM stands for
lower of cost
or market. An
explanation
of LCM and
why we have
excluded it
from our
financial
information
in this press
release can
be found at
the end of
this press
release under
"Information
Related to
Financial
Measures."
LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the second quarter 2017 of $1.1 billion, or $2.82 per share. Second quarter 2017 EBITDA was $2.0 billion.
"LyondellBasell's second quarter results demonstrate the value of our investments in capacity expansions and asset maintenance to deliver record quarterly earnings per share for the company. During the second quarter, our ethylene crackers in the United States and Europe operated at 98 percent and the refinery operated at 99 percent of nameplate capacity. Second quarter 2017 ethylene production volumes increased by 34 percent in the Americas and 13 percent in Europe compared to the second quarter 2016. Our strong operating rates were met with solid demand to drive improvements in global Olefins and Polyolefins chain margins and deliver record quarterly EBITDA for our Olefins and Polyolefins - Europe, Asia and International segment," said Bob Patel, LyondellBasell CEO.
"In addition to our earnings strength, we generated $1.2 billion of free cash flow during the second quarter, increased our quarterly dividend by 6 percent and advanced our organic growth and share repurchase programs," said Patel.
OUTLOOK
"More than 25 percent of the first wave of new United States ethylene capacity is now in the market and global olefin and polyolefin industry conditions remain favorable during July. With no major maintenance planned for the remainder of 2017, we are well positioned to deliver strong performance from LyondellBasell's global assets," Patel said.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell manages operations through five operating segments: 1) Olefins and Polyolefins - Americas; 2) Olefins and Polyolefins - Europe, Asia and International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.
The following comments and analysis represent underlying business activity and are exclusive of LCM inventory adjustments. LCM stands for lower of cost or market. An explanation of LCM and why we have excluded it from our financial information in this press release can be found at the end of this press release under "Information Related to Financial Measures."
Olefins and Polyolefins - Americas (O&P-Americas) - Our O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.
Table 2 - O&P-Americas Financial Overview
-----------------------------------------
Three Months Ended Six Months Ended
------------------
June 30, March 31, June 30, June 30,
--------
Millions of U.S. dollars 2017 2017 2016 2017 2016
------------------------ ---- ---- ---- ---- ----
Operating income $738 $559 $646 $1,297 $1,353
---------------- ---- ---- ---- ------ ------
EBITDA 859 723 754 1,582 1,632
------ --- --- --- ----- -----
LCM charges (benefits), pre-tax - - - - - - - - - -
------------------------------- --- --- --- --- ---
EBITDA excluding LCM adjustments 859 723 754 1,582 1,632
-------------------------------- --- --- --- ----- -----
Three months ended June 30, 2017 versus three months ended March 31, 2017 - EBITDA increased $136 million versus the first quarter 2017. First quarter 2017 included a $31 million gain on the sale of property in Lake Charles, Louisiana. Compared to the prior period, olefin results increased approximately $100 million. Ethylene margins improved by approximately 3 cents per pound with declining feedstock prices for propane, butane and heavy liquids. Combined polyolefin results increased by approximately $80 million. Polyethylene and polypropylene spreads increased by 4 cents per pound and 5 cents per pound respectively, due to ethylene and propylene feedstock price decreases and higher polyethylene pricing, which was partially offset by small volume declines in polyethylene. Joint venture equity income decreased by $3 million.
Three months ended June 30, 2017 versus three months ended June 30, 2016 - EBITDA increased $105 million versus the second quarter 2016. Olefin results increased by approximately $150 million primarily due to an increase in ethylene production of approximately 34 percent due to planned maintenance in the second quarter of 2016. Combined polyolefin results declined approximately $25 million primarily due to declining margins in polypropylene partially offset by increased polypropylene sales volumes. Joint venture equity income declined by $9 million.
Olefins and Polyolefins - Europe, Asia, and International (O&P-EAI) - Our O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene, including polypropylene compounds.
Table 3 - O&P-EAI Financial Overview
------------------------------------
Three Months Ended Six Months Ended
------------------
June 30, March 31, June 30, June 30,
--------
Millions of U.S. dollars 2017 2017 2016 2017 2016
------------------------ ---- ---- ---- ---- ----
Operating income $549 $401 $423 $950 $781
---------------- ---- ---- ---- ---- ----
EBITDA 699 529 576 1,228 1,085
------ --- --- --- ----- -----
LCM benefit, pretax - - - - (40) - - - -
------------------- --- --- --- --- ---
EBITDA excluding LCM adjustments 699 529 536 1,228 1,085
-------------------------------- --- --- --- ----- -----
Three months ended June 30, 2017 versus three months ended March 31, 2017 - EBITDA increased by $170 million versus the first quarter 2017. Olefin results increased approximately $135 million as ethylene margins improved by 9 cents per pound primarily due to lower feedstock costs. Combined polyolefin results increased approximately $15 million primarily due to improved margins for polypropylene and polypropylene compounds. Joint venture equity income was relatively unchanged.
Three months ended June 30, 2017 versus three months ended June 30, 2016 - EBITDA increased by $163 million versus the second quarter 2016, excluding an unfavorable $40 million quarter to quarter variance as a result of a 2016 LCM inventory adjustment. Olefin results increased by approximately $180 million as a result of improved ethylene margins and increased sales volumes due to planned maintenance which occurred in the second quarter of 2016. Combined polyolefin results declined by approximately $15 million primarily due to lower polyethylene spreads. Joint venture equity income declined by $29 million primarily due to declining polymer spreads and reduced volumes.
Intermediates and Derivatives (I&D) - Our I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.
Table 4 - I&D Financial Overview
--------------------------------
Three Months Ended Six Months Ended
------------------
June 30, March 31, June 30, June 30,
--------
Millions of U.S. dollars 2017 2017 2016 2017 2016
------------------------ ---- ---- ---- ---- ----
Operating income $270 $269 $327 $539 $582
---------------- ---- ---- ---- ---- ----
EBITDA 339 339 397 678 723
------ --- --- --- --- ---
LCM benefit, pre-tax - - - - (28) - - - -
-------------------- --- --- --- --- ---
EBITDA excluding LCM adjustments 339 339 369 678 723
-------------------------------- --- --- --- --- ---
Three months ended June 30, 2017 versus three months ended March 31, 2017 - EBITDA was unchanged relative to the first quarter 2017, including the impact from first quarter charges related to the recovery of precious metals after catalyst changes. Excluding the precious metal adjustments, PO and derivatives results declined approximately $5 million, primarily due to lower volumes resulting from planned maintenance at our plant in Botlek, The Netherlands. After excluding the precious metal adjustments, intermediate chemicals results declined approximately $30 million primarily due to a 2 cent per pound decrease in styrene margins and a decrease in methanol volumes due to planned maintenance. Oxyfuels and related products results were relatively unchanged as reduced volumes from the Botlek maintenance offset seasonal margin improvements. Joint venture equity income was relatively unchanged.
Three months ended June, 30 2017 versus three months ended June 30, 2016 - EBITDA decreased $30 million versus the second quarter 2016, excluding an unfavorable $28 million variance as a result of an LCM inventory adjustment. PO and derivatives results were relatively unchanged. Intermediate chemicals results improved by approximately $15 million primarily from improvements in methanol and VAM margins. Oxyfuels and related products results declined by approximately $45 million due to lower margins coupled with reduced volumes resulting from planned maintenance at Botlek. Joint venture equity income was relatively unchanged.
Refining - The primary products of this segment include gasoline and distillates, including diesel fuel, heating oil and jet fuel.
Table 5 - Refining Financial Overview
-------------------------------------
Three Months Ended Six Months Ended
------------------
June 30, March 31, June 30, June 30,
--------
Millions of U.S. dollars 2017 2017 2016 2017 2016
------------------------ ---- ---- ---- ---- ----
Operating loss ($21) ($70) ($53) ($91) ($83)
-------------- ---- ---- ---- ---- ----
EBITDA 25 (30) (13) (5) 1
------ --- --- --- --- ---
LCM charges (benefits), pre-tax - - - - - - - - - -
------------------------------- --- --- --- --- ---
EBITDA excluding LCM adjustments 25 (30) (13) (5) 1
-------------------------------- --- --- --- --- ---
Three months ended June 30, 2017 versus three months ended March 31, 2017 - EBITDA increased $55 million versus the first quarter 2017. The Houston refinery operated at 265,000 barrels per day, 72,000 barrels per day more than the prior quarter following completion of planned maintenance at the beginning of the second quarter. Results were negatively impacted by low industry margins reflecting weak discounts for heavy crude oil during May and June.
Three months ended June 30, 2017 versus three months ended June 30, 2016 - EBITDA increased $38 million versus the second quarter 2016. Second quarter 2017 throughput increased by 82,000 barrels per day due to maintenance during the second quarter of 2016. Second quarter 2017 margins were negatively impacted by unfavorable heavy to light differentials in crude oil markets.
Technology Segment - Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
Table 6 - Technology Financial Overview
---------------------------------------
Three Months Ended Six Months Ended
------------------
June 30, March 31, June 30, June 30,
--------
Millions of U.S. dollars 2017 2017 2016 2017 2016
------------------------ ---- ---- ---- ---- ----
Operating income $39 $50 $62 $89 $135
---------------- --- --- --- --- ----
EBITDA 48 60 73 108 156
------ --- --- --- --- ---
Three months ended June 30, 2017 versus three months ended March 31, 2017 - EBITDA decreased by $12 million primarily due to lower catalyst volumes related to the timing of shipments.
Three months ended June 30, 2017 versus three months ended June 30, 2016 - EBITDA decreased by $25 million due to the timing of licensing revenue.
Capital Spending and Cash Balances
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $407 million during the second quarter 2017. Our cash and liquid investment balance was $2.6 billion at June 30, 2017. We repurchased 5.4 million ordinary shares during the second quarter 2017, leaving 397 million common shares outstanding as of June 30, 2017. The company paid dividends of $361 million during the second quarter of 2017.
CONFERENCE CALL
LyondellBasell will host a conference call July 28 at 11 a.m. EDT. Participants on the call will include Chief Executive Officer Bob Patel, Executive Vice President and Chief Financial Officer Thomas Aebischer and Director of Investor Relations David Kinney.
The toll-free dial-in number in the U.S. is 800-475-8402. A complete listing of toll-free numbers by country is available at www.lyb.com/teleconference for international callers. The pass code for all numbers is 6934553.
The slides and webcast that accompany the call will be available at http://www.lyb.com/earnings.
A replay of the call will be available from 2 p.m. EDT July 28 until August 28 at 11:59 p.m. EDT. The replay dial-in numbers are 800-294-5423 (U.S.) and 402-220-9786 (international). The pass code for each is 2526.
ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin and polypropylene technologies. More information about LyondellBasell can be found at www.lyondellbasell.com.
FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; our ability to successfully execute projects and growth strategies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2016, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.
INFORMATION RELATED TO FINANCIAL MEASURES
This release makes reference to certain non-GAAP financial measures as defined in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. The non-GAAP measures we have presented include income from continuing operations excluding LCM, diluted earnings per share excluding LCM, EBITDA and EBITDA excluding LCM. LCM stands for lower of cost or market, which is an accounting rule consistent with GAAP related to the valuation of inventory. Our inventories are stated at the lower of cost or market. Cost is determined using the LIFO inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than the market value, which results in us writing down the value of inventory to market value in accordance with the LCM rule, consistent with GAAP. This adjustment is related to our use of LIFO accounting and the recent decline in pricing for many of our raw material and finished goods inventories. We report our financial results in accordance with U.S. generally accepted accounting principles, but believe that certain non-GAAP financial measures, such as EBITDA and earnings and EBITDA excluding LCM, provide useful supplemental information to investors regarding the underlying business trends and performance of the company's ongoing operations and are useful for period-over-period comparisons of such operations. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the financial measures prepared in accordance with GAAP.
EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a measure of our liquidity. We have also presented financial information herein exclusive of adjustments for LCM.
Quantitative reconciliations of EBITDA to net income, the most comparable GAAP measure, are provided in Table 8 at the end of this release.
OTHER FINANCIAL MEASURE PRESENTATION NOTES
This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.
Table 7 - Reconciliation of Segment Information to Consolidated Financial Information (a)
----------------------------------------------------------------------------------------
2016 2017
---- ----
(Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 YTD
------------------------- --- --- --- --- ----- --- --- ---
Sales and other operating revenues:
Olefins & Polyolefins - Americas $2,115 $2,211 $2,342 $2,409 $9,077 $2,604 $2,547 $5,151
Olefins & Polyolefins - EAI 2,578 2,721 2,634 2,646 10,579 3,024 3,008 6,032
Intermediates & Derivatives 1,702 1,769 1,805 1,950 7,226 2,150 2,014 4,164
Refining 955 1,289 1,330 1,561 5,135 1,353 1,713 3,066
Technology 132 129 102 116 479 120 107 227
Other/elims (739) (791) (848) (935) (3,313) (821) (986) (1,807)
---- ---- ---- ---- ------ ---- ---- ------
Continuing Operations $6,743 $7,328 $7,365 $7,747 $29,183 $8,430 $8,403 $16,833
====== ====== ====== ====== ======= ====== ====== =======
Operating income (loss):
Olefins & Polyolefins - Americas $707 $646 $582 $458 $2,393 $559 $738 $1,297
Olefins & Polyolefins - EAI 358 423 447 266 1,494 401 549 950
Intermediates & Derivatives 255 327 240 236 1,058 269 270 539
Refining (30) (53) (56) 40 (99) (70) (21) (91)
Technology 73 62 35 51 221 50 39 89
Other (3) (2) 1 (3) (7) 1 2 3
--- --- --- --- --- --- --- ---
Continuing Operations $1,360 $1,403 $1,249 $1,048 $5,060 $1,210 $1,577 $2,787
====== ====== ====== ====== ====== ====== ====== ======
Depreciation and amortization:
Olefins & Polyolefins - Americas $90 $88 $87 $97 $362 $118 $107 $225
Olefins & Polyolefins - EAI 55 58 58 58 229 59 58 117
Intermediates & Derivatives 70 69 62 68 269 69 68 137
Refining 43 40 40 40 163 40 44 84
Technology 10 11 10 10 41 10 9 19
Continuing Operations $268 $266 $257 $273 $1,064 $296 $286 $582
==== ==== ==== ==== ====== ==== ==== ====
EBITDA: (b)
Olefins & Polyolefins - Americas $878 $754 $682 $563 $2,877 $723 $859 $1,582
Olefins & Polyolefins - EAI 509 576 584 398 2,067 529 699 1,228
Intermediates & Derivatives 326 397 304 306 1,333 339 339 678
Refining 14 (13) (10) 81 72 (30) 25 (5)
Technology 83 73 45 61 262 60 48 108
Other (3) (4) 1 (3) (9) (4) - - (4)
--- --- --- --- --- --- --- ---
Continuing Operations $1,807 $1,783 $1,606 $1,406 $6,602 $1,617 $1,970 $3,587
====== ====== ====== ====== ====== ====== ====== ======
Capital, turnarounds and IT deferred
spending:
Olefins & Polyolefins - Americas $303 $339 $384 $350 $1,376 $202 $179 $381
Olefins & Polyolefins - EAI 81 60 48 72 261 47 32 79
Intermediates & Derivatives 76 80 90 87 333 77 107 184
Refining 57 71 51 45 224 84 79 163
Technology 6 9 9 12 36 7 6 13
Other 4 4 4 1 13 4 4 8
--- --- --- --- --- --- --- ---
Continuing Operations $527 $563 $586 $567 $2,243 $421 $407 $828
==== ==== ==== ==== ====== ==== ==== ====
(a) EBITDA for the first quarter
of 2016 includes a pre-tax
LCM charge of $68 million and
a $78 million pre-tax gain
on the sale of our wholly
owned Argentine subsidiary.
Second quarter 2016 EBITDA
includes a pre-tax LCM
benefit of $68 million for
the reversal of the first
quarter 2016 LCM adjustment
due to price recoveries
during the period. Fourth
quarter 2016 EBITDA also
includes a pre-tax LCM
charge of $29 million. See
Tables 2 through 6 for LCM
adjustments
(b) See Table 8 for EBITDA
calculation.
Table 8 - EBITDA Calculation
----------------------------
2016 2017
---- ----
(Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 YTD
------------------------- --- --- --- --- ----- --- --- ---
Net income(a) $1,030 $1,091 $953 $763 $3,837 $797 $1,130 $1,927
Loss from discontinued operations, net
of tax - - 1 2 7 10 8 4 12
--- --- --- --- --- --- --- ---
Income from continuing operations(a) 1,030 1,092 955 770 3,847 805 1,134 1,939
Provision for income taxes 432 346 326 282 1,386 315 459 774
Depreciation and amortization 268 266 257 273 1,064 296 286 582
Interest expense, net(b) 77 79 68 81 305 201 91 292
--- --- --- --- --- --- --- ---
EBITDA(c) $1,807 $1,783 $1,606 $1,406 $6,602 $1,617 $1,970 $3,587
====== ====== ====== ====== ====== ====== ====== ======
(a) The first quarter of 2016
includes an after-tax LCM
charge of $47 million and a
$78 million after-tax gain
related to the sale of our
wholly owned Argentine
subsidiary. The second
quarter of 2016 includes an
after-tax benefit of $47
million for the reversal of
the first quarter 2016 LCM
adjustment due to price
recoveries during the period.
Fourth quarter 2016 also
includes an $18 million
after-tax LCM charge.
(b) Includes pre-tax charges
totalling $113 million in the
first quarter of 2017 related
to the repayment of $1,000
million aggregate principal
amount of our outstanding 5%
senior notes due 2019.
(c) The first quarter of 2016
includes a pre-tax LCM
charge of $68 million and a
pre-tax gain of $78 million
on the sale of our wholly
owned Argentine subsidiary.
Second quarter 2016 EBITDA
includes a pre-tax LCM
benefit of $68 million for
the reversal of the first
quarter 2016 LCM adjustment.
Fourth quarter 2016 also
includes a pre-tax LCM
charge of $29 million.
Table 9 - Selected Segment Operating Information
------------------------------------------------
2016 2017
---- ----
Q1 Q2 Q3 Q4 Total Q1 Q2 YTD
--- --- --- --- ----- --- --- ---
Olefins and Polyolefins - Americas
Volumes (million pounds)
-----------------------
Ethylene produced 2,392 1,899 1,939 2,173 8,403 2,486 2,606 5,092
Propylene produced 832 748 575 660 2,815 597 821 1,418
Polyethylene sold 1,554 1,426 1,517 1,485 5,982 1,533 1,404 2,937
Polypropylene sold 612 582 659 623 2,476 644 634 1,278
Benchmark Market Prices
-----------------------
West Texas Intermediate crude oil (USD per barrel) 33.63 46.01 44.94 49.29 43.56 51.78 48.15 49.95
Light Louisiana Sweet ("LLS") crude oil (USD per barrel) 35.34 47.39 46.52 50.60 45.03 53.39 50.17 51.77
Houston Ship Channel natural gas (USD per million BTUs) 1.93 2.06 2.79 3.01 2.45 2.96 3.14 3.05
U.S. weighted average cost of ethylene production (cents/
pound) 9.8 12.0 10.6 14.3 11.7 11.8 12.5 12.2
U.S. ethylene (cents/pound) 26.7 30.3 33.0 32.7 30.7 33.1 31.9 32.5
U.S. polyethylene [high density] (cents/pound) 52.3 59.0 60.7 58.3 57.6 57.3 59.0 58.2
U.S. propylene (cents/pound) 31.0 32.7 37.8 36.2 34.4 47.2 41.0 44.1
U.S. polypropylene [homopolymer] (cents/pound) 67.8 61.7 60.2 55.8 61.4 66.2 59.0 62.6
Olefins and Polyolefins - Europe, Asia, International
Volumes (million pounds)
-----------------------
Ethylene produced 950 941 1,066 946 3,903 1,022 1,069 2,091
Propylene produced 555 577 649 563 2,344 598 632 1,230
Polyethylene sold 1,434 1,386 1,315 1,330 5,465 1,421 1,370 2,791
Polypropylene sold 1,773 1,617 1,509 1,582 6,481 1,714 1,530 3,244
Benchmark Market Prices (EUR0.01 per pound)
------------------------------------------
Western Europe weighted average cost of ethylene
production 16.3 21.2 17.9 23.8 19.8 22.7 17.6 20.2
Western Europe ethylene 38.4 41.1 42.3 43.1 41.2 46.2 47.1 46.6
Western Europe polyethylene [high density] 55.4 57.6 55.7 55.2 56.0 58.2 59.5 58.9
Western Europe propylene 26.3 28.8 30.7 33.3 29.8 37.0 39.3 38.2
Western Europe polypropylene [homopolymer] 46.5 49.5 49.5 51.7 49.3 56.3 60.1 58.2
Intermediates and Derivatives
Volumes (million pounds unless otherwise indicated)
--------------------------------------------------
Propylene oxide and derivatives 793 743 752 749 3,037 786 748 1,534
Intermediate Chemicals:
Ethylene oxide and derivatives 301 233 224 329 1,087 292 297 589
Styrene monomer 917 933 911 933 3,694 992 924 1,916
Acetyls 702 821 751 776 3,050 825 672 1,497
Oxyfuels and Related Products:
TBA Intermediates 415 391 410 361 1,577 383 332 715
MTBE/ETBE (million gallons) 270 278 298 264 1,110 239 263 502
Benchmark Market Margins (cents per gallon)
------------------------------------------
MTBE - Northwest Europe 44.4 78.7 55.3 50.6 57.2 49.5 67.3 58.2
Refining
Volumes (thousands of barrels per day)
-------------------------------------
Heavy crude oil processing rate 186 183 209 228 201 193 265 229
Benchmark Market Margins
------------------------
Light crude oil - 2-1-1 8.67 11.52 11.46 11.20 10.73 11.86 13.26 12.57
Light crude oil - Maya differential 9.19 9.55 7.52 7.80 8.51 8.78 6.28 7.55
Source: LYB and third party consultants
Note: Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect discounted prices. Volumes presented represent third party sales of selected
key products.
Table 10 - Unaudited Income Statement Information
-------------------------------------------------
2017
2016
----
(Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 YTD
------------------------- --- --- --- --- ----- --- --- ---
Sales and other operating revenues $6,743 $7,328 $7,365 $7,747 $29,183 $8,430 $8,403 $16,833
Cost of sales(a) 5,166 5,702 5,903 6,420 23,191 6,991 6,601 13,592
Selling, general and administrative expenses 193 199 188 253 833 204 200 404
Research and development expenses 24 24 25 26 99 25 25 50
--- --- --- --- --- --- --- ---
Operating income(a) 1,360 1,403 1,249 1,048 5,060 1,210 1,577 2,787
Income from equity investments 91 117 81 78 367 81 78 159
Interest expense, net(b) (77) (79) (68) (81) (305) (201) (91) (292)
Other income (expense), net(c) 88 (3) 19 7 111 30 29 59
--- --- --- --- --- --- --- ---
Income from continuing operations before income
taxes(a) (b) (c) 1,462 1,438 1,281 1,052 5,233 1,120 1,593 2,713
Provision for income taxes 432 346 326 282 1,386 315 459 774
--- --- --- --- ----- --- --- ---
Income from continuing operations(d) 1,030 1,092 955 770 3,847 805 1,134 1,939
Loss from discontinued operations, net of tax - - (1) (2) (7) (10) (8) (4) (12)
--- --- --- --- --- --- --- ---
Net income(d) 1,030 1,091 953 763 3,837 797 1,130 1,927
Net (income) loss attributable to non-controlling
interests - - - - (1) - - (1) - - 1 1
--- --- --- --- --- --- --- ---
Net income attributable to the Company shareholders(d) $1,030 $1,091 $952 $763 $3,836 $797 $1,131 $1,928
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(a) Amounts presented herein include
pre-tax LCM charges of $68
million and $29 million in the
first and fourth quarters of
2016, respectively. A pre-tax
benefit of $68 million in the
second quarter of 2016 reflects
the reversal of the first
quarter 2016 LCM adjustment due
to price recoveries during the
period.
(b) Includes pre-tax charges
totalling $113 million in the
first quarter of 2017 related
to the repayment of $1,000
million aggregate principal
amount of our outstanding 5%
senior notes due 2019.
(c) Includes a pre-tax gain of $31
million in the first quarter of
2017 on the sale of our Lake
Charles, Louisiana site
currently used as a logistics
terminal and a $78 million gain
in the first quarter of 2016 on
the sale of our wholly owned
Argentine subsidiary.
(d) Amounts presented herein include
after-tax LCM charges of $47
million and $18 million in the
first and fourth quarters of
2016, respectively. The second
quarter of 2016 includes an
after tax benefit of $47
million for the partial
reversal of the first quarter
2016 LCM adjustment resulting
from price recoveries during
the period. The first quarter
of 2016 also includes a $78
million gain on the sale of our
wholly owned Argentine
subsidiary. The first quarter
of 2017 includes after-tax
charges totalling $106 million
related to the repayment of
$1,000 million aggregate
principal amount of our
outstanding 5% senior notes due
2019.
Table 11 - Charges (Benefits) Included in Income from Continuing Operations
---------------------------------------------------------------------------
2016 2017
---- ----
Annual
Millions of U.S. dollars (except share data) Q1 Q2 Q3 Q4 Impact Q1 Q2 YTD
------------------------------------------- --- --- --- --- ------ --- --- ---
Pretax charges (benefits):
Charges and premiums related to repayment of debt $ - - $ - - $ - - $ - - $ - - $113 $ - - $113
Out of period tax adjustment - - - - - - 61 74 - - - - - -
Gain on sale of wholly owned subsidiary (78) - - - - - - (78) - - - - - -
Lower of cost or market inventory adjustment 68 (68) - - 29 29 - - - - - -
Pension settlement charge - - - - - - 58 58 - - - - - -
Total pretax charges (benefits) (10) (68) - - 148 83 113 - - 113
Provision for (benefit from) income tax related to these items (21) 21 - - (32) (32) (7) - - (7)
--- --- --- --- --- --- --- ---
After-tax effect of net charges (benefits) $(31) $(47) $ - - $116 $51 $106 $ - - $106
==== ==== === === ==== === ==== === === ====
Effect on diluted earnings per share $0.07 $0.11 $ - - $(0.29) $(0.12) $(0.26) $ - - $(0.26)
Table 12 - Unaudited Cash Flow Information
------------------------------------------
2016 2017
---- ----
(Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 YTD
------------------------- --- --- --- --- ----- --- --- ---
Net cash provided by operating
activities(a) $1,300 $1,261 $1,332 $1,713 $5,606 $678 $1,560 $2,238
Net cash used in investing
activities(b) (600) (471) (459) (771) (2,301) (541) (513) (1,054)
Net cash used in financing activities
(a) (333) (1,039) (1,195) (782) (3,349) (537) (822) (1,359)
(a) In the second quarter of 2017, the
early adoption of ASU 2016-15,
Statement of Cash Flows (Topic 230):
Classification of Certain Cash
Receipts and Cash Payments resulted
in the reclassification of cash flows
related to debt extinguishment costs
incurred in the first quarter of 2017
from operating to financing
activities cash flows.
(b) Also in the second quarter of 2017,
the early retrospective adoption of
ASU 2016-18, Statement of Cash
Flows: Restricted Cash requires the
inclusion of restricted cash and
restricted cash equivalents in the
cash and cash equivalents balances
in our Statements of Cash Flows.
Table 13 - Unaudited Balance Sheet Information
----------------------------------------------
March 31, June 30, September 30, December 31, March 31, June 30,
(Millions of U.S. dollars) 2016 2016 2016 2016 2017 2017
------------------------- ---- ---- ---- ---- ---- ----
Cash and cash equivalents $1,318 $1,060 $740 $875 $485 $734
Restricted cash 4 4 4 3 1 6
Short-term investments 1,332 1,023 1,090 1,147 1,176 1,278
Accounts receivable, net 2,683 2,806 2,852 2,842 3,292 3,086
Inventories 3,978 4,009 4,015 3,809 3,875 4,007
Prepaid expenses and other current assets 1,009 1,081 852 923 852 964
----- ----- --- --- --- ---
Total current assets 10,324 9,983 9,553 9,599 9,681 10,075
Property, plant and equipment, net 9,373 9,681 10,057 10,137 10,361 10,551
Investments and long-term receivables:
Investment in PO joint ventures 398 390 399 415 409 423
Equity investments 1,734 1,610 1,681 1,575 1,672 1,595
Other investments and long-term receivables 18 18 17 20 20 18
Goodwill 548 542 543 528 531 559
Intangible assets, net 618 588 562 550 517 499
Other assets 559 623 607 618 577 398
--- --- --- --- --- ---
Total assets $23,572 $23,435 $23,419 $23,442 $23,768 $24,118
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Current maturities of long-term debt $4 $4 $3 $2 $2 $2
Short-term debt 594 616 621 594 611 561
Accounts payable 2,243 2,357 2,329 2,529 2,627 2,317
Accrued liabilities 1,600 1,374 1,357 1,415 1,139 1,251
----- ----- ----- ----- ----- -----
Total current liabilities 4,441 4,351 4,310 4,540 4,379 4,131
Long-term debt 8,504 8,485 8,464 8,385 8,419 8,496
Other liabilities 2,125 2,143 2,151 2,113 2,130 2,253
Deferred income taxes 2,134 2,149 2,387 2,331 2,353 2,370
Stockholders' equity 6,344 6,283 6,082 6,048 6,462 6,866
Non-controlling interests 24 24 25 25 25 2
--- --- --- --- --- ---
Total liabilities and stockholders' equity $23,572 $23,435 $23,419 $23,442 $23,768 $24,118
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SOURCE LyondellBasell Industries
