LyondellBasell Reports Third-Quarter 2016 Earnings
LyondellBasell Reports Third-Quarter 2016 Earnings
Nov 1, 2016
HOUSTON and LONDON, Nov. 1, 2016 /PRNewswire/ --
Third Quarter 2016 Highlights
- Income from continuing operations: $1.0 billion
- Diluted earnings per share: $2.31 per share
- EBITDA: $1.6 billion
- Share repurchases and dividends totaled $1.2 billion; repurchased 10.3 million shares during the third quarter, approximately 2% of the outstanding shares
Comparisons with the prior quarter and third quarter 2015 are available in the following table:
|
Table 1 - Earnings Summary |
|||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||
|
September 30, |
June 30, |
September 30, |
September 30, |
||||||
|
Millions of U.S. dollars (except share data) |
2016 |
2016 |
2015 |
2016 |
2015 |
||||
|
Sales and other operating revenues |
$7,365 |
$7,328 |
$8,334 |
$21,436 |
$25,664 |
||||
|
Net income(a) |
953 |
1,091 |
1,186 |
3,074 |
3,679 |
||||
|
Income from continuing operations(b) |
955 |
1,092 |
1,189 |
3,077 |
3,682 |
||||
|
Diluted earnings per share (U.S. dollars): |
|||||||||
|
Net income(c) |
2.30 |
2.56 |
2.54 |
7.23 |
7.77 |
||||
|
Income from continuing operations(b) |
2.31 |
2.56 |
2.55 |
7.24 |
7.78 |
||||
|
Diluted share count (millions) |
414 |
425 |
463 |
424 |
473 |
||||
|
EBITDA(d) |
1,606 |
1,783 |
2,001 |
5,196 |
6,139 |
||||
|
Excluding LCM1 Impact: |
|||||||||
|
LCM charges (benefits), pre-tax |
- - |
(68) |
181 |
- - |
264 |
||||
|
Income from continuing operations(b) |
955 |
1,045 |
1,303 |
3,077 |
3,848 |
||||
|
Diluted earnings per share (U.S. dollars): |
|||||||||
|
Income from continuing operations(b) |
2.31 |
2.45 |
2.80 |
7.24 |
8.13 |
||||
|
EBITDA(d) |
1,606 |
1,715 |
2,182 |
5,196 |
6,403 |
||||
|
(a) |
Includes net loss attributable to non-controlling interests and income (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. |
|||||||
|
__________________________________ 1 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 third quarter 2016 of approximately $1.0 billion, or $2.31 per share. Third quarter 2016 EBITDA was $1.6 billion.
"Third quarter earnings were $2.31 per share; remaining on a 2016 annual pace that exceeds $9.00 per share. During the quarter and throughout the year, the strong contribution from our European olefins and polyolefins business has demonstrated the geographic balance within our portfolio. This has been particularly significant as our North American olefins and polyolefins business results have been impacted by a heavy planned maintenance schedule. Both regions experienced continued strong polyolefin demand. Within our refining business, operating disruptions impacted third quarter results," said Bob Patel, LyondellBasell's CEO.
OUTLOOK "During October, global olefin and polyolefin industry conditions have remained favorable. We anticipate that the winter months will bring some typical seasonal slowing in select business lines. The fourth quarter marks the completion of a period of significant planned maintenance and associated downtime in our olefin and polyolefin assets. During 2017, our planned maintenance schedule is much lighter than 2016, and we will be positioned to benefit from our investment in system upgrades, reliability and expansions," Patel said.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT LyondellBasell manages operations through five operating segments: 1) Olefins & Polyolefins – Americas; 2) Olefins & Polyolefins – Europe, Asia and International (EAI); 3) Intermediates & Derivatives; 4) Refining; and 5) Technology.
The following comments and analysis represent underlying business activity and are exclusive of LCM inventory adjustments.
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 2 - O&P–Americas Financial Overview |
||||||
|
Three Months Ended |
Nine Months Ended |
|||||
|
September 30, |
June 30, |
September 30, |
September 30, |
|||
|
Millions of U.S. dollars |
2016 |
2016 |
2015 |
2016 |
2015 |
|
|
Operating income |
$582 |
$646 |
$740 |
$1,935 |
$2,594 |
|
|
EBITDA |
682 |
754 |
841 |
2,314 |
2,886 |
|
|
LCM charges, pre-tax |
- - |
- - |
79 |
- - |
101 |
|
|
EBITDA excluding LCM adjustments |
682 |
754 |
920 |
2,314 |
2,987 |
|
Three months ended September 30, 2016 versus three months ended June 30, 2016 – EBITDA decreased $72 million for the third quarter 2016 versus the second quarter 2016. Compared to the prior period, underlying olefin results increased approximately $15 million. Ethylene price increased approximately 4 cents per pound. Combined polyolefin results declined by $70 million. Polyethylene spreads decreased by approximately 4 cents per pound. Polyethylene sales volumes improved by approximately 6 percent as inventory management offset planned maintenance. Polypropylene spreads declined by 9 cents per pound partially offset by volumes which increased approximately 13 percent. Joint venture equity income declined by $8 million.
Three months ended September 30, 2016 versus three months ended September 30, 2015 – EBITDA decreased $238 million versus the third quarter 2015, excluding a favorable $79 million quarter to quarter variance as a result of an LCM inventory adjustment. Olefin results declined by $120 million. Third quarter was impacted by planned maintenance activities at Corpus Christi and Morris, Illinois. Combined polyolefin results declined approximately $110 million versus the prior year period. Polyethylene results declined primarily due to a margin decline of approximately 7 cents per pound. Polyethylene sales volumes declined by approximately 4 percent due to planned facility maintenance during the quarter. Polypropylene sales volumes and margins were relatively unchanged. Joint venture equity income was unchanged.
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 3 - O&P–EAI Financial Overview |
||||||
|
Three Months Ended |
Nine Months Ended |
|||||
|
September 30, |
June 30, |
September 30, |
September 30, |
|||
|
Millions of U.S. dollars |
2016 |
2016 |
2015 |
2016 |
2015 |
|
|
Operating income |
$447 |
$423 |
$412 |
$1,228 |
$1,007 |
|
|
EBITDA |
584 |
576 |
549 |
1,669 |
1,398 |
|
|
LCM charges (benefits), pretax |
- - |
(40) |
6 |
- - |
6 |
|
|
EBITDA excluding LCM adjustments |
584 |
536 |
555 |
1,669 |
1,404 |
|
Three months ended September 30, 2016 versus three months ended June 30, 2016 – EBITDA increased by $48 million versus the second quarter 2016, excluding an unfavorable $40 million quarter to quarter variance as a result of an LCM inventory adjustment. The third quarter benefited $11 million from the restructuring of Asian polypropylene joint ventures and the sale of Australian polypropylene assets. Olefin results increased approximately $95 million as margins increased approximately 7 cents per pound. Olefins also benefitted from increased volume due to the absence of second quarter maintenance. Combined polyolefin results declined $25 million primarily due to lower polyethylene margins. Polypropylene compounds and polybutene-1 results decreased by $10 million. Equity income declined by $29 million due to scheduled joint venture maintenance.
Three months ended September 30, 2016 versus three months ended September 30, 2015 – EBITDA increased by $29 million versus the third quarter 2015, excluding a favorable $6 million quarter to quarter variance as a result of an LCM inventory adjustment. The third quarter of 2016 benefited $11 million from the restructuring of Asian polypropylene joint ventures and the sale of Australian polypropylene assets. Olefin results were relatively unchanged. Combined polyolefin results increased approximately $20 million as spreads improved while volumes declined by approximately 5 percent. Polypropylene compounds and polybutene-1 results improved by approximately $15 million. Equity income declined by $12 million due to scheduled joint venture maintenance.
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 (including methanol), ethylene oxide and its derivatives, and oxyfuels.
|
Table 4 - I&D Financial Overview |
|||||
|
Three Months Ended |
Nine Months Ended |
||||
|
September 30, |
June 30, |
September 30, |
September 30, |
||
|
Millions of U.S. dollars |
2016 |
2016 |
2015 |
2016 |
2015 |
|
Operating income |
$240 |
$327 |
$403 |
$822 |
$1,079 |
|
EBITDA |
304 |
397 |
460 |
1,027 |
1,263 |
|
LCM charges (benefits), pre-tax |
- - |
(28) |
46 |
- - |
107 |
|
EBITDA excluding LCM adjustments |
304 |
369 |
506 |
1,027 |
1,370 |
Three months ended September 30, 2016 versus three months ended June 30, 2016 –EBITDA decreased $65 million versus the second quarter 2016, excluding an unfavorable $28 million quarter to quarter variance as a result of an LCM adjustment related to inventory. Results for PO and PO derivatives declined by approximately $15 million primarily due to declining margins. Intermediate chemicals results declined by approximately $60 million, primarily due to a styrene margin decline of approximately 3 cents per pound. Lower ethanol, ethylene oxide, and ethylene glycol results also contributed. Oxyfuels were relatively unchanged with sales volume increases offset by lower margins. Equity income from joint ventures was relatively unchanged.
Three months ended September 30, 2016 versus three months ended September 30, 2015 – EBITDA decreased $202 million versus the third quarter 2015, excluding a favorable $46 million quarter to quarter variance as a result of an LCM inventory adjustment. Results for PO and PO derivatives declined by approximately $50 million due to lower margins while volumes increased approximately 8 percent. Intermediate chemicals results declined by approximately $130 million primarily due to methanol, styrene, and ethylene glycol margins. Oxyfuels results decreased approximately $20 million relative to very strong third quarter 2015 margins. Equity income from joint ventures was unchanged.
Refining – The primary products of this segment include gasoline, diesel fuel, heating oil, jet fuel, and petrochemical raw materials.
|
Table 5 - Refining Financial Overview |
|||||
|
Three Months Ended |
Nine Months Ended |
||||
|
September 30, |
June 30, |
September 30, |
September 30, |
||
|
Millions of U.S. dollars |
2016 |
2016 |
2015 |
2016 |
2015 |
|
Operating income (loss) |
($56) |
($53) |
$52 |
($139) |
$245 |
|
EBITDA |
(10) |
(13) |
93 |
(9) |
401 |
|
LCM charges, pre-tax |
- - |
- - |
50 |
- - |
50 |
|
EBITDA excluding LCM adjustments |
(10) |
(13) |
143 |
(9) |
451 |
Three months ended September 30, 2016 versus three months ended June 30, 2016 – EBITDA increased $3 million versus the second quarter 2016. During the third quarter, operating rates were limited to 209,000 barrels per day due to operational disruptions. The Maya 2-1-1 industry benchmark crack spread decreased by $2.09 per barrel, averaging $18.98 per barrel.
Three months ended September 30, 2016 versus three months ended September 30, 2015 – EBITDA decreased $153 million versus the third quarter 2015, excluding a favorable $50 million quarter to quarter variance as a result of an LCM inventory adjustment. Third quarter 2016 throughput was down by 40,000 barrels per day from the prior year period due to operational disruptions. The Maya 2-1-1 industry benchmark crack spread decreased by $3.79 per barrel.
Technology Segment – The Technology segment has global responsibility for our polyolefin catalyst business and our process technology licensing business.
|
Table 6 - Technology Financial Overview |
||||||
|
Three Months Ended |
Nine Months Ended |
|||||
|
September 30, |
June 30, |
September 30, |
September 30, |
|||
|
Millions of U.S. dollars |
2016 |
2016 |
2015 |
2016 |
2015 |
|
|
Operating income |
$35 |
$62 |
$34 |
$170 |
$143 |
|
|
EBITDA |
45 |
73 |
45 |
201 |
178 |
|
Three months ended September 30, 2016 versus three months ended June 30, 2016 – EBITDA decreased by $28 million due to the timing of licensing revenue.
Three months ended September 30, 2016 versus three months ended September 30, 2015 – EBITDA was unchanged with improved catalyst results partially offset by licensing results.
Capital Spending and Cash Balances Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $586 million during the third quarter 2016. Our cash and liquid investment balance was $2.1 billion at September 30, 2016. We repurchased 10.3 million ordinary shares during the third quarter 2016. There were 409 million common shares outstanding as of September 30, 2016. The company paid dividends of $351 million during the third quarter of 2016.
CONFERENCE CALL LyondellBasell will host a conference call November 1 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 Vice President of Investor Relations Doug Pike.
The toll-free dial-in number in the U.S. is 888-677-1826. 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 November 1 until December 1 at 11:59 p.m. EDT. The replay dial-in numbers are 866-425-0182 (U.S.) and +1 203-369-0874 (international). The pass code for each is 11116.
ABOUT LYONDELLBASELL LyondellBasell (NYSE: LYB) is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell (www.lyb.com) manufactures products at 55 sites in 17 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 parts, home furnishings, construction materials and biofuels.
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, 2015, which can be found at www.lyb.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 last-in, first-out ("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) |
|||||||||||||||||||||||||||||
|
2015 |
2016 |
||||||||||||||||||||||||||||
|
(Millions of U.S. dollars) |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
YTD |
||||||||||||||||||||
|
Sales and other operating revenues: |
|||||||||||||||||||||||||||||
|
Olefins & Polyolefins - Americas |
$ |
2,551 |
$ |
2,679 |
$ |
2,516 |
$ |
2,218 |
$ |
9,964 |
$ |
2,115 |
$ |
2,211 |
$ |
2,342 |
$ |
6,668 |
|||||||||||
|
Olefins & Polyolefins - EAI |
2,911 |
3,061 |
2,932 |
2,672 |
11,576 |
2,578 |
2,721 |
2,634 |
7,933 |
||||||||||||||||||||
|
Intermediates & Derivatives |
1,918 |
2,159 |
2,039 |
1,656 |
7,772 |
1,702 |
1,769 |
1,805 |
5,276 |
||||||||||||||||||||
|
Refining |
1,607 |
2,102 |
1,693 |
1,155 |
6,557 |
955 |
1,289 |
1,330 |
3,574 |
||||||||||||||||||||
|
Technology |
136 |
107 |
100 |
122 |
465 |
132 |
129 |
102 |
363 |
||||||||||||||||||||
|
Other/elims |
(938) |
(963) |
(946) |
(752) |
(3,599) |
(739) |
(791) |
(848) |
(2,378) |
||||||||||||||||||||
|
Continuing Operations |
$ |
8,185 |
$ |
9,145 |
$ |
8,334 |
$ |
7,071 |
$ |
32,735 |
$ |
6,743 |
$ |
7,328 |
$ |
7,365 |
$ |
21,436 |
|||||||||||
|
Operating income (loss): |
|||||||||||||||||||||||||||||
|
Olefins & Polyolefins - Americas |
$ |
934 |
$ |
920 |
$ |
740 |
$ |
662 |
$ |
3,256 |
$ |
707 |
$ |
646 |
$ |
582 |
$ |
1,935 |
|||||||||||
|
Olefins & Polyolefins - EAI |
236 |
359 |
412 |
302 |
1,309 |
358 |
423 |
447 |
1,228 |
||||||||||||||||||||
|
Intermediates & Derivatives |
271 |
405 |
403 |
145 |
1,224 |
255 |
327 |
240 |
822 |
||||||||||||||||||||
|
Refining |
74 |
119 |
52 |
(101) |
144 |
(30) |
(53) |
(56) |
(139) |
||||||||||||||||||||
|
Technology |
64 |
45 |
34 |
54 |
197 |
73 |
62 |
35 |
170 |
||||||||||||||||||||
|
Other |
(4) |
(3) |
9 |
(10) |
(8) |
(3) |
(2) |
1 |
(4) |
||||||||||||||||||||
|
Continuing Operations |
$ |
1,575 |
$ |
1,845 |
$ |
1,650 |
$ |
1,052 |
$ |
6,122 |
$ |
1,360 |
$ |
1,403 |
$ |
1,249 |
$ |
4,012 |
|||||||||||
|
Depreciation and amortization: |
|||||||||||||||||||||||||||||
|
Olefins & Polyolefins - Americas |
$ |
86 |
$ |
85 |
$ |
87 |
$ |
95 |
$ |
353 |
$ |
90 |
$ |
88 |
$ |
87 |
$ |
265 |
|||||||||||
|
Olefins & Polyolefins - EAI |
55 |
54 |
54 |
56 |
219 |
55 |
58 |
58 |
171 |
||||||||||||||||||||
|
Intermediates & Derivatives |
60 |
56 |
55 |
62 |
233 |
70 |
69 |
62 |
201 |
||||||||||||||||||||
|
Refining |
74 |
40 |
41 |
41 |
196 |
43 |
40 |
40 |
123 |
||||||||||||||||||||
|
Technology |
12 |
12 |
11 |
11 |
46 |
10 |
11 |
10 |
31 |
||||||||||||||||||||
|
Continuing Operations |
$ |
287 |
$ |
247 |
$ |
248 |
$ |
265 |
$ |
1,047 |
$ |
268 |
$ |
266 |
$ |
257 |
$ |
791 |
|||||||||||
|
EBITDA: (b) |
|||||||||||||||||||||||||||||
|
Olefins & Polyolefins - Americas |
$ |
1,031 |
$ |
1,014 |
$ |
841 |
$ |
775 |
$ |
3,661 |
$ |
878 |
$ |
754 |
$ |
682 |
$ |
2,314 |
|||||||||||
|
Olefins & Polyolefins - EAI |
357 |
492 |
549 |
427 |
1,825 |
509 |
576 |
584 |
1,669 |
||||||||||||||||||||
|
Intermediates & Derivatives |
337 |
466 |
460 |
212 |
1,475 |
326 |
397 |
304 |
1,027 |
||||||||||||||||||||
|
Refining |
149 |
159 |
93 |
(59) |
342 |
14 |
(13) |
(10) |
(9) |
||||||||||||||||||||
|
Technology |
76 |
57 |
45 |
65 |
243 |
83 |
73 |
45 |
201 |
||||||||||||||||||||
|
Other |
2 |
(2) |
13 |
(26) |
(13) |
(3) |
(4) |
1 |
(6) |
||||||||||||||||||||
|
Continuing Operations |
$ |
1,952 |
$ |
2,186 |
$ |
2,001 |
$ |
1,394 |
$ |
7,533 |
$ |
1,807 |
$ |
1,783 |
$ |
1,606 |
$ |
5,196 |
|||||||||||
|
Capital, turnarounds and IT deferred spending: |
|||||||||||||||||||||||||||||
|
Olefins & Polyolefins - Americas |
$ |
149 |
$ |
140 |
$ |
159 |
$ |
220 |
$ |
668 |
$ |
303 |
$ |
339 |
$ |
384 |
$ |
1,026 |
|||||||||||
|
Olefins & Polyolefins - EAI |
38 |
27 |
49 |
72 |
186 |
81 |
60 |
48 |
189 |
||||||||||||||||||||
|
Intermediates & Derivatives |
76 |
76 |
135 |
154 |
441 |
76 |
80 |
90 |
246 |
||||||||||||||||||||
|
Refining |
33 |
28 |
23 |
24 |
108 |
57 |
71 |
51 |
179 |
||||||||||||||||||||
|
Technology |
6 |
3 |
7 |
8 |
24 |
6 |
9 |
9 |
24 |
||||||||||||||||||||
|
Other |
4 |
4 |
- - |
5 |
13 |
4 |
4 |
4 |
12 |
||||||||||||||||||||
|
Continuing Operations |
$ |
306 |
$ |
278 |
$ |
373 |
$ |
483 |
$ |
1,440 |
$ |
527 |
$ |
563 |
$ |
586 |
$ |
1,676 |
|||||||||||
|
(a) |
EBITDA as presented herein includes the impacts of pre-tax LCM charges of $92 million, $181 million and $284 million for the first, third and fourth quarters of 2015, respectively. EBITDA for the second quarter of 2015 includes a pre-tax LCM benefit of $9 million for the partial reversal of the first quarter 2015 LCM adjustment. EBITDA for the first quarter of 2016 includes a pre-tax LCM adjustment 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. See Tables 2 through 6 for LCM adjustments recorded for each segment. |
|
(b) |
See Table 8 for EBITDA calculation. |
|
Table 8 - EBITDA Calculation |
||||||||||||||||||||||||||||
|
2015 |
2016 |
|||||||||||||||||||||||||||
|
(Millions of U.S. dollars) |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
YTD |
|||||||||||||||||||
|
Net income(a) |
$ |
1,164 |
$ |
1,329 |
$ |
1,186 |
$ |
795 |
$ |
4,474 |
$ |
1,030 |
$ |
1,091 |
$ |
953 |
$ |
3,074 |
||||||||||
|
(Income) loss from discontinued operations, net of tax |
3 |
(3) |
3 |
2 |
5 |
- - |
1 |
2 |
3 |
|||||||||||||||||||
|
Income from continuing operations(a) |
1,167 |
1,326 |
1,189 |
797 |
4,479 |
1,030 |
1,092 |
955 |
3,077 |
|||||||||||||||||||
|
Provision for income taxes |
440 |
541 |
487 |
262 |
1,730 |
432 |
346 |
326 |
1,104 |
|||||||||||||||||||
|
Depreciation and amortization |
287 |
247 |
248 |
265 |
1,047 |
268 |
266 |
257 |
791 |
|||||||||||||||||||
|
Interest expense, net |
58 |
72 |
77 |
70 |
277 |
77 |
79 |
68 |
224 |
|||||||||||||||||||
|
EBITDA(b) |
$ |
1,952 |
$ |
2,186 |
$ |
2,001 |
$ |
1,394 |
$ |
7,533 |
$ |
1,807 |
$ |
1,783 |
$ |
1,606 |
$ |
5,196 |
||||||||||
|
(a) |
Amounts presented herein include after-tax LCM charges of $58 million, $114 million and $185 million in the first, third and fourth quarters of 2015, respectively. The second quarter of 2015 includes an after-tax benefit of $6 million for the partial reversal of the first quarter 2015 LCM adjustment resulting from price recoveries during the period. 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. |
|
(b) |
EBITDA as presented herein includes the impact of pre-tax LCM charges of $92 million, $181 million and $284 million for the first, third and fourth quarters of 2015, respectively. EBITDA for the second quarter of 2015 includes a pre-tax LCM benefit of $9 million for the partial reversal of the first quarter 2015 LCM adjustment. 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. |
|
Table 9 - Selected Segment Operating Information |
||||||||||||||||||||||
|
2015 |
2016 |
|||||||||||||||||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
YTD |
||||||||||||||
|
Olefins and Polyolefins - Americas |
||||||||||||||||||||||
|
Volumes (million pounds) |
||||||||||||||||||||||
|
Ethylene produced |
2,364 |
2,415 |
2,514 |
2,391 |
9,684 |
2,392 |
1,899 |
1,939 |
6,230 |
|||||||||||||
|
Propylene produced |
805 |
740 |
697 |
798 |
3,040 |
832 |
748 |
575 |
2,155 |
|||||||||||||
|
Polyethylene sold |
1,473 |
1,575 |
1,577 |
1,578 |
6,203 |
1,554 |
1,426 |
1,517 |
4,497 |
|||||||||||||
|
Polypropylene sold |
627 |
698 |
662 |
606 |
2,593 |
612 |
582 |
659 |
1,853 |
|||||||||||||
|
Benchmark Market Prices |
||||||||||||||||||||||
|
West Texas Intermediate crude oil (USD per barrel) |
48.57 |
57.95 |
45.36 |
42.16 |
48.71 |
33.63 |
46.01 |
44.94 |
41.65 |
|||||||||||||
|
Light Louisiana Sweet ("LLS") crude oil (USD per barrel) |
52.84 |
62.93 |
50.20 |
43.53 |
52.36 |
35.34 |
47.39 |
46.52 |
43.20 |
|||||||||||||
|
Houston Ship Channel natural gas (USD per million BTUs) |
2.76 |
2.76 |
2.72 |
2.11 |
2.57 |
1.93 |
2.06 |
2.79 |
2.26 |
|||||||||||||
|
U.S. weighted average cost of ethylene production (cents/pound) |
10.2 |
9.7 |
9.6 |
10.9 |
10.1 |
9.8 |
12.0 |
10.6 |
10.8 |
|||||||||||||
|
U.S. ethylene (cents/pound) |
34.8 |
34.2 |
30.3 |
27.5 |
31.7 |
26.7 |
30.3 |
33.0 |
30.0 |
|||||||||||||
|
U.S. polyethylene [high density] (cents/pound) |
65.7 |
67.3 |
64.3 |
57.0 |
63.6 |
52.3 |
59.0 |
60.7 |
57.3 |
|||||||||||||
|
U.S. propylene (cents/pound) |
49.7 |
41.7 |
33.2 |
31.3 |
39.0 |
31.0 |
32.7 |
37.8 |
33.8 |
|||||||||||||
|
U.S. polypropylene [homopolymer] (cents/pound) |
67.7 |
61.7 |
59.3 |
62.7 |
62.8 |
67.8 |
61.7 |
60.2 |
63.2 |
|||||||||||||
|
Olefins and Polyolefins - Europe, Asia, International |
||||||||||||||||||||||
|
Volumes (million pounds) |
||||||||||||||||||||||
|
Ethylene produced |
1,007 |
1,047 |
944 |
978 |
3,976 |
950 |
941 |
1,066 |
2,957 |
|||||||||||||
|
Propylene produced |
600 |
632 |
575 |
575 |
2,382 |
555 |
577 |
649 |
1,781 |
|||||||||||||
|
Polyethylene sold |
1,533 |
1,360 |
1,304 |
1,379 |
5,576 |
1,434 |
1,386 |
1,315 |
4,135 |
|||||||||||||
|
Polypropylene sold |
1,817 |
1,529 |
1,673 |
1,757 |
6,776 |
1,773 |
1,617 |
1,509 |
4,899 |
|||||||||||||
|
Benchmark Market Prices (€0.01 per pound) |
||||||||||||||||||||||
|
Western Europe weighted average cost of ethylene production |
22.9 |
23.2 |
14.4 |
22.5 |
20.8 |
16.3 |
21.2 |
17.9 |
18.5 |
|||||||||||||
|
Western Europe ethylene |
39.3 |
47.1 |
46.6 |
41.4 |
43.6 |
38.4 |
41.1 |
42.3 |
40.6 |
|||||||||||||
|
Western Europe polyethylene [high density] |
45.2 |
60.6 |
61.2 |
56.9 |
56.0 |
55.4 |
57.6 |
55.7 |
56.2 |
|||||||||||||
|
Western Europe propylene |
37.1 |
44.4 |
41.7 |
31.0 |
38.5 |
26.3 |
28.8 |
30.7 |
28.6 |
|||||||||||||
|
Western Europe polypropylene [homopolymer] |
49.8 |
62.5 |
59.3 |
47.4 |
54.7 |
46.5 |
49.5 |
49.5 |
48.5 |
|||||||||||||
|
Intermediates and Derivatives |
||||||||||||||||||||||
|
Volumes (million pounds) |
||||||||||||||||||||||
|
Propylene oxide and derivatives sold |
870 |
751 |
697 |
682 |
3,000 |
793 |
743 |
752 |
2,288 |
|||||||||||||
|
Ethylene oxide and derivatives sold |
268 |
312 |
282 |
237 |
1,099 |
301 |
233 |
224 |
758 |
|||||||||||||
|
Styrene monomer sold |
903 |
735 |
904 |
889 |
3,431 |
917 |
933 |
911 |
2,761 |
|||||||||||||
|
Acetyls sold |
547 |
810 |
733 |
623 |
2,713 |
702 |
821 |
751 |
2,274 |
|||||||||||||
|
TBA Intermediates sold |
433 |
321 |
421 |
371 |
1,546 |
415 |
391 |
410 |
1,216 |
|||||||||||||
|
Volumes (million gallons) |
||||||||||||||||||||||
|
MTBE/ETBE sold |
229 |
299 |
268 |
258 |
1,054 |
270 |
278 |
298 |
846 |
|||||||||||||
|
Benchmark Market Margins (cents per gallon) |
||||||||||||||||||||||
|
MTBE - Northwest Europe |
64.0 |
106.0 |
119.0 |
49.8 |
85.1 |
44.4 |
78.7 |
55.3 |
59.5 |
|||||||||||||
|
Refining |
||||||||||||||||||||||
|
Volumes (thousands of barrels per day) |
||||||||||||||||||||||
|
Heavy crude oil processing rate |
241 |
255 |
249 |
206 |
238 |
186 |
183 |
209 |
192 |
|||||||||||||
|
Benchmark Market Margins |
||||||||||||||||||||||
|
Light crude oil - 2-1-1 |
15.02 |
16.42 |
15.29 |
9.44 |
14.04 |
8.67 |
11.52 |
11.46 |
10.58 |
|||||||||||||
|
Light crude oil - Maya differential |
8.72 |
7.56 |
7.48 |
9.11 |
8.26 |
9.19 |
9.55 |
7.52 |
8.74 |
|||||||||||||
|
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 |
||||||||||||||||||||||||||||||
|
2015 |
2016 |
|||||||||||||||||||||||||||||
|
(Millions of U.S. dollars) |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
YTD |
|||||||||||||||||||||
|
Sales and other operating revenues |
$ |
8,185 |
$ |
9,145 |
$ |
8,334 |
$ |
7,071 |
$ |
32,735 |
$ |
6,743 |
$ |
7,328 |
$ |
7,365 |
$ |
21,436 |
||||||||||||
|
Cost of sales(a) |
6,379 |
7,047 |
6,465 |
5,792 |
25,683 |
5,166 |
5,702 |
5,903 |
16,771 |
|||||||||||||||||||||
|
Selling, general and administrative expenses |
205 |
228 |
194 |
201 |
828 |
193 |
199 |
188 |
580 |
|||||||||||||||||||||
|
Research and development expenses |
26 |
25 |
25 |
26 |
102 |
24 |
24 |
25 |
73 |
|||||||||||||||||||||
|
Operating income(a) |
1,575 |
1,845 |
1,650 |
1,052 |
6,122 |
1,360 |
1,403 |
1,249 |
4,012 |
|||||||||||||||||||||
|
Income from equity investments |
69 |
90 |
93 |
87 |
339 |
91 |
117 |
81 |
289 |
|||||||||||||||||||||
|
Interest expense, net |
(58) |
(72) |
(77) |
(70) |
(277) |
(77) |
(79) |
(68) |
(224) |
|||||||||||||||||||||
|
Other income (expense), net(b) |
21 |
4 |
10 |
(10) |
25 |
88 |
(3) |
19 |
104 |
|||||||||||||||||||||
|
Income from continuing operations before income taxes(a) (b) |
1,607 |
1,867 |
1,676 |
1,059 |
6,209 |
1,462 |
1,438 |
1,281 |
4,181 |
|||||||||||||||||||||
|
Provision for income taxes |
440 |
541 |
487 |
262 |
1,730 |
432 |
346 |
326 |
1,104 |
|||||||||||||||||||||
|
Income from continuing operations(c) |
1,167 |
1,326 |
1,189 |
797 |
4,479 |
1,030 |
1,092 |
955 |
3,077 |
|||||||||||||||||||||
|
Income (loss) from discontinued operations, net of tax |
(3) |
3 |
(3) |
(2) |
(5) |
- - |
(1) |
(2) |
(3) |
|||||||||||||||||||||
|
Net income(c) |
1,164 |
1,329 |
1,186 |
795 |
4,474 |
1,030 |
1,091 |
953 |
3,074 |
|||||||||||||||||||||
|
Net (income) loss attributable to non-controlling interests |
2 |
1 |
(1) |
- - |
2 |
- - |
- - |
(1) |
(1) |
|||||||||||||||||||||
|
Net income attributable to the Company shareholders(c) |
$ |
1,166 |
$ |
1,330 |
$ |
1,185 |
$ |
795 |
$ |
4,476 |
$ |
1,030 |
$ |
1,091 |
$ |
952 |
$ |
3,073 |
||||||||||||
|
(a) |
Amounts presented herein include pre-tax LCM charges of $92 million, $181 million and $284 million for the first, third and fourth quarters of 2015, respectively. The second quarter of 2015 includes a pre-tax LCM benefit of $9 million for the partial reversal of the first quarter 2015 LCM adjustment. The first quarter of 2016 includes a pre-tax LCM charge of $68 million. 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. |
|
(b) |
Includes a pre-tax gain of $78 million on the sale of our wholly owned Argentine subsidiary in the second quarter of 2016. |
|
(c) |
Amounts presented herein include after-tax LCM charges of $58 million, $114 million and $185 million in the first, third and fourth quarters of 2015, respectively. The second quarter of 2015 includes an after-tax benefit of $6 million for the partial reversal of the first quarter 2015 LCM adjustment resulting from price recoveries during the period. The first quarter of 2016 includes an after-tax LCM charge of $47 million and an after-tax gain of $78 million on the sale of our wholly owned Argentine subsidiary. Second quarter 2016 EBITDA includes an after tax LCM benefit of $47 million for the reversal of the first quarter 2016 LCM adjustment. |
|
Table 11 - Charges (Benefits) Included in Income from Continuing Operations |
|||||||||||||||||||||||||||
|
2015 |
2016 |
||||||||||||||||||||||||||
|
Millions of U.S. dollars (except share data) |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
YTD |
||||||||||||||||||
|
Pretax charges (benefits): |
|||||||||||||||||||||||||||
|
Gain on sale of wholly owned subsidiary |
$ |
- - |
$ |
- - |
$ |
- - |
$ |
- - |
$ |
- - |
$ |
(78) |
- - |
- - |
(78) |
||||||||||||
|
Lower of cost or market inventory adjustment |
92 |
(9) |
181 |
284 |
548 |
68 |
$ |
(68) |
$ |
- - |
$ |
- - |
|||||||||||||||
|
Emission allowance credits, amortization |
35 |
- - |
- - |
- - |
35 |
- - |
- - |
- - |
- - |
||||||||||||||||||
|
Total pretax charges (benefits) |
127 |
(9) |
181 |
284 |
583 |
(10) |
(68) |
- - |
(78) |
||||||||||||||||||
|
Provision for (benefit from) income tax related to these items |
(47) |
3 |
(67) |
(99) |
(210) |
(21) |
21 |
- - |
- - |
||||||||||||||||||
|
After-tax effect of net charges (benefits) |
$ |
80 |
$ |
(6) |
$ |
114 |
$ |
185 |
$ |
373 |
$ |
(31) |
$ |
(47) |
$ |
- - |
$ |
(78) |
|||||||||
|
Effect on diluted earnings per share |
$ |
(0.17) |
$ |
0.02 |
$ |
(0.25) |
$ |
(0.42) |
$ |
(0.80) |
$ |
0.07 |
$ |
0.11 |
$ |
- - |
$ |
0.19 |
|||||||||
|
Table 12 - Unaudited Cash Flow Information |
||||||||||||||||||||||||||||||
|
2015 |
2016 |
|||||||||||||||||||||||||||||
|
(Millions of U.S. dollars) |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
YTD |
|||||||||||||||||||||
|
Net cash provided by operating activities |
$ |
1,468 |
$ |
1,446 |
$ |
1,768 |
$ |
1,160 |
$ |
5,842 |
$ |
1,300 |
$ |
1,261 |
$ |
1,332 |
$ |
3,893 |
||||||||||||
|
Net cash provided by (used in) investing activities |
(443) |
(727) |
67 |
52 |
(1,051) |
(597) |
(471) |
(459) |
(1,527) |
|||||||||||||||||||||
|
Net cash used in financing activities |
(401) |
(1,021) |
(1,684) |
(1,744) |
(4,850) |
(333) |
(1,039) |
(1,195) |
(2,567) |
|||||||||||||||||||||
|
Table 13 - Unaudited Balance Sheet Information |
|||||||||||||||||||||||||||
|
March 31, |
June 30, |
September 30, |
December 31, |
March 31, |
June 30, |
September 30, |
|||||||||||||||||||||
|
(Millions of U.S. dollars) |
2015 |
2015 |
2015 |
2015 |
2016 |
2016 |
2016 |
||||||||||||||||||||
|
Cash and cash equivalents |
$ |
1,616 |
$ |
1,325 |
$ |
1,474 |
$ |
924 |
$ |
1,318 |
$ |
1,060 |
$ |
740 |
|||||||||||||
|
Restricted cash |
2 |
3 |
1 |
7 |
4 |
4 |
4 |
||||||||||||||||||||
|
Short-term investments |
1,478 |
1,989 |
1,602 |
1,064 |
1,332 |
1,023 |
1,090 |
||||||||||||||||||||
|
Accounts receivable, net |
3,089 |
3,373 |
2,924 |
2,517 |
2,683 |
2,806 |
2,852 |
||||||||||||||||||||
|
Inventories |
4,267 |
4,179 |
4,138 |
4,051 |
3,978 |
4,009 |
4,015 |
||||||||||||||||||||
|
Prepaid expenses and other current assets(a) |
1,195 |
1,121 |
1,059 |
1,226 |
1,009 |
1,081 |
852 |
||||||||||||||||||||
|
Total current assets |
11,647 |
11,990 |
11,198 |
9,789 |
10,324 |
9,983 |
9,553 |
||||||||||||||||||||
|
Property, plant and equipment, net |
8,430 |
8,636 |
8,793 |
8,991 |
9,373 |
9,681 |
10,057 |
||||||||||||||||||||
|
Investments and long-term receivables: |
|||||||||||||||||||||||||||
|
Investment in PO joint ventures |
373 |
357 |
357 |
397 |
398 |
390 |
399 |
||||||||||||||||||||
|
Equity investments |
1,581 |
1,612 |
1,602 |
1,608 |
1,734 |
1,610 |
1,681 |
||||||||||||||||||||
|
Other investments and long-term receivables |
38 |
126 |
125 |
122 |
18 |
18 |
17 |
||||||||||||||||||||
|
Goodwill |
533 |
543 |
543 |
536 |
548 |
542 |
543 |
||||||||||||||||||||
|
Intangible assets, net |
695 |
671 |
644 |
640 |
618 |
588 |
562 |
||||||||||||||||||||
|
Other assets(a) |
637 |
600 |
605 |
674 |
559 |
623 |
607 |
||||||||||||||||||||
|
Total assets |
$ |
23,934 |
$ |
24,535 |
$ |
23,867 |
$ |
22,757 |
$ |
23,572 |
$ |
23,435 |
$ |
23,419 |
|||||||||||||
|
Current maturities of long-term debt |
$ |
4 |
$ |
3 |
$ |
3 |
$ |
4 |
$ |
4 |
$ |
4 |
$ |
3 |
|||||||||||||
|
Short-term debt |
514 |
582 |
573 |
353 |
594 |
616 |
621 |
||||||||||||||||||||
|
Accounts payable |
2,631 |
2,755 |
2,450 |
2,182 |
2,243 |
2,357 |
2,329 |
||||||||||||||||||||
|
Accrued liabilities |
1,482 |
1,455 |
1,784 |
1,810 |
1,600 |
1,374 |
1,357 |
||||||||||||||||||||
|
Deferred income taxes(a) |
429 |
434 |
383 |
- - |
- - |
- - |
- - |
||||||||||||||||||||
|
Total current liabilities |
5,060 |
5,229 |
5,193 |
4,349 |
4,441 |
4,351 |
4,310 |
||||||||||||||||||||
|
Long-term debt |
7,677 |
7,658 |
7,674 |
7,671 |
8,504 |
8,485 |
8,464 |
||||||||||||||||||||
|
Other liabilities |
2,038 |
2,063 |
2,044 |
2,036 |
2,125 |
2,143 |
2,151 |
||||||||||||||||||||
|
Deferred income taxes(a) |
1,653 |
1,635 |
1,604 |
2,127 |
2,134 |
2,149 |
2,387 |
||||||||||||||||||||
|
Stockholders' equity |
7,478 |
7,927 |
7,328 |
6,550 |
6,344 |
6,283 |
6,082 |
||||||||||||||||||||
|
Non-controlling interests |
28 |
23 |
24 |
24 |
24 |
24 |
25 |
||||||||||||||||||||
|
Total liabilities and stockholders' equity |
$ |
23,934 |
$ |
24,535 |
$ |
23,867 |
$ |
22,757 |
$ |
23,572 |
$ |
23,435 |
$ |
23,419 |
|||||||||||||
|
(a) |
Our prospective adoption of ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, in December 2015 resulted in the classification of our deferred taxes as of December 2015 as noncurrent. |
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SOURCE LyondellBasell Industries
For further information: Media Contact: Faye Eson, +1 713-309-7575; or Investor Contact: Douglas J. Pike, +1 713-309-7141
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