LyondellBasell Reports Record 2012 Earnings
ROTTERDAM, Netherlands, Feb. 1, 2013 /PRNewswire via COMTEX/ -- Full Year 2012
Highlights
-- Record earnings of $2,858 million income from continuing operations or $4.96
diluted earnings per share; EBITDA of $5,856 million
-- Strong performance led by advantaged positions in Olefins and Polyolefins -
Americas and Intermediates and Derivatives segments
-- Paid $2.4 billion in dividends, or $4.20 per share, a yield of approximately 7
percent
-- Joined the S&P 500 index
Fourth Quarter 2012 Highlights
-- $645 million income from continuing operations or $1.13 diluted earnings per
share, and EBITDA of $1,289 million
-- Strong North America olefins margins with approximately 85 percent of ethylene
production sourced from natural gas liquids (NGLs)
-- Business followed the typical fourth quarter trends
-- Paid a special dividend of $2.75 per share or $1.6 billion
LyondellBasell Industries (LYB) today announced earnings from continuing
operations for the fourth quarter 2012 of $645 million, or $1.13 per share.
Fourth-quarter 2012 EBITDA was $1,289 million. Full year 2012 income from
continuing operations was $2,858 million, or $4.96 per share. Comparisons with
the prior quarter, fourth quarter 2011, and full year 2011 are available in the
following table.
Table 1 - Earnings Summary
Three Months EndedYear Ended
Millions of U.S. dollarsDecember 31,September 30,December 31,December 31,December 31,
(except share data)20122012201120122011
Sales and other operating revenues$11,097$11,273$10,981$45,352$48,183
Net income (loss)(a)623844(218)2,8342,140
Income from continuing operations645851272,8582,472
Diluted earnings per share (U.S. dollars):
Net income (loss)(b)1.091.46(0.38)4.923.74
Income from continuing operations 1.131.470.054.964.32
Diluted share count (millions)578577575577572
EBITDA(c)1,2891,5657665,8565,585
EBITDA excluding LCM inventory
valuation adjustments
1,2891,4947665,8565,585
(a) Includes net loss attributable to non-controlling interests and loss from discontinued operations, net of tax. See Table 11.
(b) Includes diluted loss per share attributable to discontinued operations.
(c) See the end of this release for an explanation of the Company's use of EBITDA and Table 9 for reconciliations of EBITDA to income from continuing operations.
For 2012, LyondellBasell reported record results, led by the Olefins and
Polyolefins - Americas and the Intermediates and Derivatives segments, both of
which benefit from geographically advantaged feedstocks.
Fourth-quarter 2012 EBITDA and net income were lower than the third quarter 2012,
following normal seasonal slowdown impacts.
Results reflect the following charges and benefits:
Table 2 - Charges (Benefits) Included in Net Income
Three Months EndedYear Ended
Millions of U.S. dollarsDecember 31, September 30, December 31, December 31, December 31,
(except share data)20122012201120122011
Pretax charges (benefits):
Charges and premiums related to repayment of debt$ - -$ - -$431$329$443
Reorganization items- -- -15(4)45
Corporate restructurings53- -185393
Impairments- -- -- -2223
Sale of precious metals- -- -- -- -(41)
Warrants - mark to market- -- -61137
Legal recovery- -(24)- -(24)- -
Insurance settlement- -- -- -(100)(34)
Unfavorable contract reserve reversal(28)- -- -(28)- -
Environmental accruals- -- -- -- -16
Asset retirement obligations- -- -- -- -10
Settlement related to Houston refinery crane incident - -- -(15)- -(15)
Lower of cost or market inventory adjustment- -(71)- -- -- -
Total pretax charges (benefits)25(95)455259577
Provision for (benefit from) income tax related to these items(17)35(154)(96)(169)
After-tax effect of net charges (credits)8(60)301163408
Effect on diluted earnings per share$ - -$0.11($0.52)($0.26)($0.69)
"Our fourth quarter results were in line with seasonal trends and our
expectations, contributing to a record year for LyondellBasell," said Jim
Gallogly, LyondellBasell Chief Executive Officer. "During 2012, we generated
income from continuing operations of $2,858 million or $4.96 per share. Our North
American olefins business and our Intermediates and Derivatives segment set the
pace for the year's strong performance. The benefits of our focused
back-to-basics strategy were clearly demonstrated as reliable manufacturing
operations allowed us to take advantage of favorable market conditions. The U.S.
shale gas revolution is clearly visible in our current results as well as future
growth plans," Gallogly said.
"Over the past two and a half years, the company has advanced every facet of its
business processes, including safer and more reliable operations, strict cost
control and refurbishing its assets through a large number of major turnarounds.
This work has enabled strong returns to shareholders, a strengthened balance
sheet, and a significant capital growth program. Our employees' hard work and
dedication have contributed to our strong operational and financial performance,"
Gallogly said.
"During the year, we paid dividends of more than $2.4 billion, or $4.20 per
share, contributing to an annual shareholders' return of 89 percent. Our success
was further recognized through our addition to the S&P 500 index and Moody's
raising our credit rating to investment grade," Gallogly said.
OUTLOOK
Commenting on the near term outlook, Gallogly said, "We have seen a good start in
2013. Our assets have run well through the early weeks of the new year. Overall,
the fundamentals that supported our success during 2012 have continued. Our
employees remain very focused, and we anticipate another strong year in 2013."
"Olefins in North America continue to benefit from strong margins created by low
priced natural gas liquid raw materials. However, outside of North America, the
global olefins industry continues to experience low operating rates and
profitability, negatively impacting our European olefins and commodity polyolefin
businesses," Gallogly said.
"The diversified portfolio of businesses in our Intermediates and Derivatives
segment continues to realize solid performance. Our Refining segment will be
impacted by a turnaround in the first quarter as we complete scheduled
maintenance at our Houston refinery," added Gallogly.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell operates in five business segments: 1) Olefins and Polyolefins -
Americas; 2) Olefins and Polyolefins - Europe, Asia, International (EAI); 3)
Intermediates and Derivatives; 4) Refining; and 5) Technology.
Olefins and 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
Three Months EndedYear Ended
December 31, September 30, December 31, December 31, December 31,
Millions of U.S. dollars20122012201120122011
Operating income$693$738$328$2,650$1,855
EBITDA7698204072,9632,140
EBITDA excluding LCM charges 7697494072,9632,140
Three months ended December 31, 2012 versus three months ended September 30, 2012
- EBITDA decreased $51 million versus the third quarter 2012. Underlying EBITDA
increased by $20 million excluding the impact of the $71 million non-cash lower
of cost or market (LCM) reversal in the third quarter 2012. Compared to the prior
period, underlying olefins results increased primarily due to margin improvement
in the fourth quarter 2012. The fourth quarter was the second consecutive quarter
where the company's North American olefins plant utilization exceeded 100 percent
of nameplate capacity. Combined polyolefin results declined slightly, driven by
lower polyethylene spreads and a 6 percent decline in polypropylene sales volume.
During the third quarter, the segment received $10 million in dividends from the
Indelpro joint venture.
Three months ended December 31, 2012 versus three months ended December 31, 2011
- EBITDA increased $362 million versus the fourth quarter 2011. Olefins results
increased compared to the prior year period largely as a result of significantly
improved margins resulting from lower natural gas liquid prices, in addition to
increased ethylene production. Polyethylene results improved as a result of a 7
percent increase in sales volume coupled with approximately 3 cents per pound
spread improvement. Polypropylene results also increased as a result of higher
polypropylene margins more than offsetting a 4 percent volume decline.
Full year ended December 31, 2012 versus full year ended December 31, 2011 -
EBITDA increased $823 million versus 2011. Olefins results increased compared to
the prior year, primarily driven by improved ethylene margins as the company's
average cost-of-ethylene-production metric decreased approximately 11 cents per
pound, which more than offset an approximate 3 cents per pound decline in the
company's average ethylene sales price. Polyolefin results were higher in 2012
than in 2011 as both sales volumes and margins improved. The segment benefited in
2012 from a $29 million hurricane insurance settlement.
Olefins and 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
Three Months EndedYear Ended
December 31, September 30, December 31, December 31, December 31,
Millions of U.S. dollars 20122012201120122011
Operating income (loss)($94)$15($73)$127$435
EBITDA507545561894
Three months ended December 31, 2012 versus three months ended September 30, 2012
- EBITDA decreased $25 million versus the third quarter 2012. The fourth quarter
included a net negative impact related to various items such as restructuring and
compensation accruals, a feedstock contract renegotiation, and a Wesseling plant
turnaround. Underlying results for combined olefins and polyolefins improved by
approximately $30 million. Combined polypropylene compounds and Polybutene-1
results declined approximately $40 million from a strong third quarter 2012 due
to a seasonal volume decline in addition to lower margins related to raw
materials pricing volatility. Dividends from joint ventures totaled $50 million
during the fourth quarter 2012.
Three months ended December 31, 2012 versus three months ended December 31, 2011
- EBITDA increased $5 million versus the fourth quarter 2011. Underlying olefins
results increased due to improved margins. Combined polyolefin results increased
approximately $25 million compared to the prior year period primarily as a result
of improved margins. Polypropylene compounding and Polybutene-1 results declined
approximately $25 million compared to the prior year period due to lower margins,
driven by a raw material pricing lag that more than offset a 3 percent volume
increase. Dividends from joint ventures totaled $50 million in the fourth quarter
2012 and $44 million in the same period in 2011.
Full year ended December 31, 2012 versus full year ended December 31, 2011 -
EBITDA decreased $333 million versus 2011. Olefins results declined approximately
$190 million due to lower margins and a 6 percent decline in production volume,
partly associated with the Wesseling plant turnaround in late 2012. Combined
polyolefin results fell approximately $65 million due to lower sales volumes and
margins, while results for polypropylene compounding and Polybutene-1 improved by
approximately $10 million as margins improved and volumes stayed relatively
unchanged. Dividends from joint ventures decreased $68 million in 2012 when
compared to 2011.
Intermediates and 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, ethylene
oxide and its derivatives, and oxyfuels.
Table 5 - I&D Financial Overview
Three Months EndedYear Ended
December 31, September 30, December 31, December 31, December 31,
Millions of U.S. dollars 20122012201120122011
Operating income$246$424$185$1,430$1,156
EBITDA3054752351,6531,392
Three months ended December 31, 2012 versus three months ended September 30, 2012
- EBITDA decreased $170 million versus the third quarter 2012. Combined PO and
derivatives, and intermediate chemicals results declined approximately $55
million versus the prior period due to the effects of planned maintenance
turnarounds and a seasonal drop in demand. Oxyfuels results declined
approximately $100 million due to lower sales volumes and margins associated with
typical fourth quarter gasoline demand and pricing seasonality.
Three months ended December 31, 2012 versus three months ended December 31, 2011
- EBITDA increased $70 million compared to the fourth quarter 2011. Underlying
EBITDA for PO and derivatives decreased slightly versus the prior year period due
to lower margins. The decline in PO and derivatives was outpaced by higher C4
chemicals margins and increased acetyls volumes and margins compared to the
fourth quarter 2011. Oxyfuels results increased by approximately $55 million due
to improved margins driven by higher fourth quarter 2012 gasoline prices coupled
with higher crude oil-to-natural gas spread relative to the fourth quarter 2011.
Full year ended December 31, 2012 versus full year ended December 31, 2011 -
EBITDA in 2012 increased by $261 million versus 2011. Combined results for PO, PO
derivatives and intermediate chemicals products increased. Improved C4 chemical
margins more than offset moderate declines in PO derivatives and ethylene glycol
margins. Oxyfuels results increased by approximately $230 million due to improved
volumes and margins. Higher margins in 2012 were driven by higher gasoline prices
coupled with higher crude oil-to-natural gas spread compared to 2011. The I&Dsegment benefited in 2012 from $14 million in joint venture dividends and $18
million in proceeds from a hurricane insurance settlement, and in 2011 from $41
million related to the sale of precious metals.
Refining - The primary products of this segment include gasoline, diesel fuel,
heating oil, jet fuel, and petrochemical raw materials.
Table 6 - Refining Financial Overview
Three Months EndedYear Ended
December 31, September 30, December 31, December 31, December 31,
Millions of U.S. dollars 20122012201120122011
Operating income$86$114$3$334$809
EBITDA12215067481977
Three months ended December 31, 2012 versus three months ended September 30, 2012
- EBITDA decreased $28 million versus the third quarter 2012. Excluding the $24
million in proceeds related to a legal restitution in the third quarter 2012,
underlying business results were relatively unchanged. The Houston refinery
operated at 255,000 barrels per day, up 15,000 barrels per day from the prior
quarter. The Maya 2-1-1 benchmark crack spread decreased $2.29 per barrel to
$24.36 per barrel in the fourth quarter 2012. Relative to the benchmark spread,
results continue to be negatively impacted from depressed by-product values such
as petroleum coke and various natural gas based products.
Three months ended December 31, 2012 versus three months ended December 31, 2011
- EBITDA increased $55 million versus the fourth quarter 2011. The Houston
refinery operated at 255,000 barrels per day, down 7,000 barrels per day from the
fourth quarter in 2011. The throughput decline, which negatively impacted the
segment results by approximately $10 million, was more than offset by improved
fourth quarter 2012 margins. The Maya 2-1-1 benchmark crack spread increased
$11.65 per barrel to $24.36 per barrel in the fourth quarter 2012. The fourth
quarter 2011 results included $15 million in proceeds from the 2008 crane
incident settlement.
Full year ended December 31, 2012 versus full year ended December 31, 2011 -
EBITDA decreased $496 million in 2012 compared to 2011 due to fewer opportunities
to purchase discounted crude oils, reduced by-product values, and a throughput
decline of 8,000 barrels-per-day. The throughput decline was the result of a
combination of planned and unplanned outages at the Houston refinery. The Maya
2-1-1 benchmark crack spread increased $1.99 per barrel to $23.55 per barrel in
2012 compared to 2011. Relative to the benchmark spread, results were negatively
impacted from reduced opportunity to purchase discounted crude oils, and
depressed by-product values such as petroleum coke. The refining segment
benefited from proceeds of $77 million in 2012 and $49 million in 2011 from
insurance claims, recoveries and settlements.
Technology - The principal products of the Technology segment include polyolefin
catalysts and production process technology licenses and related services.
Table 7 - Technology Financial Overview
Three Months EndedYear Ended
December 31, September 30, December 31, December 31, December 31,
Millions of U.S. dollars 20122012201120122011
Operating income$23$31$11$122$107
EBITDA434836197214
Three months ended December 31, 2012 versus three months ended September 30, 2012
- EBITDA declined $5 million compared to the third quarter 2012. Higher catalyst
sales were more than offset by $18 million in charges related to research and
development restructuring activities.
Three months ended December 31, 2012 versus three months ended December 31, 2011
- EBITDA increased $7 million compared to the fourth quarter of the prior year
driven by higher catalyst sales and licensing activities. The fourth quarter 2012
includes $18 million in charges related to research and development restructuring
activities.
Full year ended December 31, 2012 versus full year ended December 31, 2011 -
EBITDA decreased $17 million due to charges related to research and development
restructuring activities.
Capital Spending and Cash balances
Capital expenditures, including growth projects, maintenance turnarounds,
catalyst and information technology-related expenditures, were $333 million
during the fourth quarter 2012 and $1.1 billion for the full year 2012. The
company's cash balance was approximately $2.7 billion on Dec. 31, 2012.
CONFERENCE CALL
LyondellBasell will host a conference call today, Feb. 01, 2013, at 11 a.m. ET.
Participants on the call will include Chief Executive Officer Jim Gallogly,
Executive Vice President and Chief Financial Officer Karyn Ovelmen, Senior Vice
President - Strategic Planning and Transactions Sergey Vasnetsov, and Vice
President of Investor Relations Doug Pike.
The toll-free dial-in number in the U.S. is 800-369-1609. For international
numbers, please go to our website, lyondellbasell.com,
for a complete listing of toll-free numbers by country. The pass code for all
numbers is 4807902.
A replay of the call will be available from 2 p.m. ET Feb. 1 to 11 p.m. ET on
March 1. The replay dial-in numbers are 866-454-2134 (U.S.) and +1 203-369-1248
(international). The pass code for each number is 7068.
The slides that accompany the call will be available at
lyondellbasell.com.
ABOUT LYONDELLBASELL
LyondellBasell (LYB) is one of the world's largest plastics, chemical and
refining companies and a member of the S&P 500 Index. LyondellBasell
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