LyondellBasell Reports First-Quarter 2011 Results
Margin Expansion Drives Strong Results
ROTTERDAM, The Netherlands, May 2, 2011 /PRNewswire via COMTEX/ -- First-Quarter
2011 Highlights
Net income of $660 million; Diluted earnings per share of $1.15
Quarterly EBITDA of $1,402 million; 84 percent increase from fourth quarter 2010,
119 percent increase from first quarter 2010
Sales of $12.3 billion, a 15 percent increase from fourth quarter 2010
Margin expansion in global Olefins & Polyolefins, U.S. Refining, and Oxyfuels
businesses
Significant dividend from Saudi Arabian joint venture
LyondellBasell Industries (LYB) today announced net income for the first quarter
2011 of $660 million, or $1.15 per share. First-quarter 2011 EBITDA was $1,402
million, an 84 percent increase from the fourth quarter 2010 figure which
excludes a $323 million lower of cost or market (LCM) inventory adjustment. Sales
in the first quarter were $12,252 million, an increase of 15 percent from the
prior quarter.
Comparisons with the prior quarter and first quarter 2010 are available in the
following table.
Table 1 - Earnings Summary (a)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three months ended
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Millions of U.S. dollars (except share data)Mar. 31,Dec. 31, Mar. 31,
201120102010
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
Sales and other operating revenues$12,252$10,610$9,755
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
Net income(b)6607668
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
Diluted earnings per share (U.S. dollars)1.151.34NA
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
Diluted share count (millions)569566NA
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
EBITDA (c)1,4021,085640
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
EBITDA excluding 2010 LCM inventory valuation adjustments1,402762640
------------------------------------------------------------- ------------------------------------------------------------- -------- ----------------------------------------------------------------------------------------------------------------
(a)For all periods prior to May 1, 2010, EBITDA is calculated using a current cost inventory basis.For periods on and after May 1, 2010, net income and EBITDA are calculated using the LIFO (Last-In, First-Out) method of inventory accounting.
(b)Includes net income (loss) attributable to non-controlling interests.See Table 11.
(c)See the end of this release for an explanation of the Company's use of EBITDA and Table 9 for reconciliations of EBITDA to net income.
During the first quarter 2011, results improved across all business segments.
Most notable were improvements in global Olefins & Polyolefins and the Refining &
Oxyfuels segment as increased margins were realized in spite of significant crude
oil price increases during the quarter.
In addition, results reflect the following:
Table 2 - Charges (Benefits) Included in Net Income
-----------------------------------------------------------------------------------------------------
Three months ended
--------------------------------------
Millions of U.S. dollars (except share data)Mar. 31,Dec. 31,Mar. 31,
201120102010
-------------------------------------------------------------- ------------ ------------ ------------
Pretax charges (benefits):
--------------------------------------------------------------
Charge/(benefit) - Reorganization items$2$2$(207)
-------------------------------------------------------------- ------------ ------------ ------------
LCM inventory valuation adjustments-(323)-
-------------------------------------------------------------- ------------ ------------ ------------
Warrants - mark to market5955-
-------------------------------------------------------------- ------------ ------------ ------------
Impairments5283
-------------------------------------------------------------- ------------ ------------ ------------
Premiums and charges on early repayment of debt-27-
-------------------------------------------------------------- ------------ ------------ ------------
Gain on sale of Flavors & Fragrances business-(64)-
-------------------------------------------------------------- ------------ ------------ ------------
Insurance settlement(34)--
-------------------------------------------------------------- ------------ ------------ ------------
Provision for (benefit from) income tax related to these items 1112471
-------------------------------------------------------------- ------------ ------------ ------------
After-tax effect of net charges (credits)43(151)(133)
-------------------------------------------------------------- ------------ ------------ ------------
Effect on diluted earnings per share(0.08)$0.27NA
-------------------------------------------------------------- ------------ ------------ ------------
"During the first quarter, we again demonstrated the earnings potential of our
company as margins increased in nearly all businesses compared to the fourth
quarter 2010 despite significant raw material pricing pressures," said
LyondellBasell Chief Executive Officer Jim Gallogly. "Our EBITDA of $1.4 billion
reflects solid operations, an improved cost structure and improving markets,
particularly in the U.S.," Gallogly continued.
"In U.S. olefins operations, we continued to optimize plant operations to take
advantage of low-cost ethane while in European olefins we saw a recovery of
margins from depressed fourth quarter levels. We received an $82 million dividend
from one of our Saudi Arabian joint ventures during the quarter. Our
Intermediates & Derivatives segment delivered record quarterly results as higher
propylene prices were largely passed through," said Gallogly. "In our Refining &
Oxyfuels segment, we completed a major turnaround at our Houston refinery fluid
catalytic cracker, and we are realizing the benefits of the upgrade. The Maya 211
spread increased more than $5 per barrel this quarter to nearly $24 per barrel,
and oxyfuels spreads have rebounded from their typical winter lows," Gallogly
said.
OUTLOOK
Commenting on the near-term outlook, Gallogly said, "The second quarter is off to
a good start. Conditions experienced in the first quarter were maintained and, in
some areas, improved during April. We continue to advance our internal programs
and are taking another step towards reducing our debt by redeeming 10 percent of
our outstanding 8% Notes due in 2017. On May 5, we will hold our Annual Meeting
of shareholders in Rotterdam. Items to be voted upon at the meeting include
expanding the Supervisory Board and initiating a dividend."
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell operates in five business segments: 1) Olefins & Polyolefins -
Americas; 2) Olefins & Polyolefins - Europe, Asia, International; 3)
Intermediates & Derivatives; 4) Refining & Oxyfuels; and 5) Technology.
Olefins & Polyolefins - Americas (O&P-Americas) - The primary products of this
segment include ethylene and its co-products (propylene, butadiene and benzene),
polyethylene, polypropylene and Catalloy process resins.
Table 3 - O&P-Americas Financial Overview (a)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three months ended
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Millions of U.S. dollarsMar. 31,Dec. 31, Mar. 31,
201120102010
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
Operating income$421$446$145
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA484505274
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA excluding LCM charges484342274
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
(a)For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting.See Table 8.
Three months ended Mar. 31, 2011 versus three months ended Dec. 31, 2010 -
Excluding a $163 million non-cash LCM reversal in the fourth quarter 2010,
underlying EBITDA increased $142 million versus the fourth quarter 2010. Olefins
profitability improved approximately $70 million as an average ethylene sales
price increase of approximately 2 cents per pound was coupled with an
approximately 3 cent per pound decrease in the company's average
cost-of-ethylene-production to drive margins higher. Higher sales volumes
contributed to an approximately $30 million improvement of polyethylene (PE)
results compared to fourth quarter 2010. Polypropylene (PP) profits for the first
quarter increased approximately $10 million. Total polyolefins sales volumes were
approximately equal to fourth-quarter volumes.
Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 -
O&P-Americas results improved significantly versus the first quarter 2010.
Olefins results improved primarily due to improved margins. PE results improved
approximately $140 million versus the prior year period largely due to
significantly improved margins and increased volumes. PP results were largely
unchanged compared to the prior year period.
Olefins & Polyolefins-Europe, Asia, International (O&P-EAI) - The primary
products of this segment include ethylene and its co-products (propylene and
butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy
process resins and Polybutene-1 resins.
Table 4 - O&P-EAI Financial Overview (a)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three months ended
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Millions of U.S. dollarsMar. 31,Dec. 31, Mar. 31,
201120102010
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
Operating income (loss)$179$66$71
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA333125152
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA excluding LCM charges333115152
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
(a)For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting.See Table 8.
Three months ended Mar. 31, 2011 versus three months ended Dec. 30, 2010 -
Excluding a $10 million non-cash LCM reversal in the fourth quarter 2010, EBITDA
increased by $218 million versus the fourth quarter 2010. Olefins results
improved approximately $100 million from the fourth quarter due to increased
volumes and significantly improved margins. Polyethylene and polypropylene
results were approximately equal to the prior period while PP compounding profits
increased approximately $10 million from fourth quarter 2010 primarily as a
result of increased volumes. An $82 million dividend received from our Saudi
Ethylene and Polyethylene Company joint venture accounted for the majority of the
$96 million of dividends received from joint ventures during the first quarter
2010.
Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - EBITDA
increased $181 million versus the first quarter 2010. Improved olefins and
polypropylene margins and increased dividends from joint ventures accounted for
the majority of the improved performance compared to the prior year period.
Increased sales volumes of most products also contributed to the improvement.
Intermediates & Derivatives (I&D) - The primary products of this segment include
propylene oxide (PO) and its co-products (styrene monomer, tertiary butyl alcohol
(TBA), isobutylene and tertiary butyl hydroperoxide), and derivatives (propylene
glycol, propylene glycol ethers and butanediol); acetyls, and ethylene oxide and
its derivatives.
Table 5 - I&D Financial Overview (a)
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three months ended
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Millions of U.S. dollarsMar. 31,Dec. 31, Mar. 31,
201120102010
----------------------------------------------------------------------------------------------------------------------------------- ------------------ -------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Operating income$234$196$123
----------------------------------------------------------------------------------------------------------------------------------- ------------------ -------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EBITDA270228196
----------------------------------------------------------------------------------------------------------------------------------- ------------------ -------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
EBITDA excluding LCM charges270211196
----------------------------------------------------------------------------------------------------------------------------------- ------------------ -------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(a)For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting.See Table 8.I&D results in Table 5 do not reflect the $64 million gain on the sale of the Flavors & Fragrances (F&F) business on December 22, 2010.The $64 million gain appears as "Income (loss) from discontinued operations, net of tax" on the income statement (Table 11).
Three months ended Mar. 31, 2011 versus three months ended Dec. 30, 2010 -
Excluding a non-cash LCM inventory reversal of $17 million in the fourth quarter
2010, EBITDA increased $59 million versus the fourth quarter 2010. Increased
sales volumes, partially as a result of seasonal deicer sales, were partially
offset by slightly lower margins in PO and PO derivatives. Intermediates
profitability increased significantly versus the fourth quarter as ethylene
oxide/ethylene glycol and TBA intermediates accounted for the majority of the
improvement.
Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 - I&DEBITDA increased $74 million compared to the first quarter 2010. PO and PO
derivatives EBITDA increased primarily due to higher margins for most products.
Improved Intermediates results versus the prior year period were mainly the
result of higher sales volumes of most products and higher acetyls and ethylene
oxide/ethylene glycol margins.
Refining & Oxyfuels (R&O) - The primary products of this segment include
gasoline, diesel fuel, heating oil, jet fuel, petrochemical raw materials, methyl
tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE).
Table 6 - R&O Financial Overview (a)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three months ended
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Millions of U.S. dollarsMar. 31,Dec. 31, Mar. 31,
201120102010
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
Operating income (loss)$164$144$(128)
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA2102123
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA excluding LCM charges210793
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
(a)For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting.See Table 8.
Three months ended Mar. 31, 2011 versus three months ended Dec. 31, 2010 -
Excluding a non-cash LCM reversal of $133 million in the fourth quarter 2010,
EBITDA increased $131 million versus the fourth quarter 2010. Houston refinery
financial performance improved approximately $80 million versus fourth quarter
2010. First-quarter Houston refinery results include a $34 million insurance
settlement. Crude oil volume at the Houston refinery increased by approximately
25,000 barrels per day (9 percent of nameplate capacity) compared to the fourth
quarter primarily due to the absence of unplanned outages experienced during the
fourth quarter 2010. Refining margins improved as the average industry benchmark
margin increased approximately $5 per barrel during the quarter. Also notable
during the quarter was the completion of the Fluid Catalytic Cracking Unit (FCCU)
turnaround at the Houston refinery. At the Berre refinery, volumes increased
approximately 21,000 barrels per day while margins decreased slightly as naphtha
price did not keep pace with increased crude oil costs. Oxyfuels results improved
compared to the fourth quarter 2010 as seasonally higher margins accounted for
the majority of the approximately $40 million EBITDA increase.
Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 -
Segment EBITDA increased $207 million versus the first quarter 2010. At the
Houston refinery, an increase in the industry benchmark margin of approximately
$8 per barrel was the primary contributor to the improved results. Berre refinery
results were relatively unchanged. Oxyfuels results improved primarily as a
result of strength in gasoline pricing versus the prior year period.
Technology Segment - The principal products of the Technology segment include
polyolefin catalysts and production process technology licenses and related
services.
Table 7 - Technology Financial Overview (a)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Three months ended
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Millions of U.S. dollarsMar. 31,Dec. 31, Mar. 31,
201120102010
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
Operating income$66$8$31
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA914447
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
EBITDA excluding LCM charges914447
----------------------------------------------------------------- ----------------------------------------------------------------- -------- --------------------------------------------------------------------------------------------------------------------------
(a)For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting.See Table 8.
Three months ended Mar. 31, 2011 versus three months ended Dec. 31, 2010 -
Results improved due to increased polyolefin catalyst sales and licensing income
and the absence of the $17 million fourth-quarter 2010 LIFO inventory adjustment.
Three months ended Mar. 31, 2011 versus three months ended Mar. 31, 2010 -
Results improved primarily due to increased licensing income versus the prior
year period.
Liquidity
Company liquidity, which we define as cash and cash equivalents plus funds
available through established lines of credit, was approximately $6.3 billion at
Mar. 31, 2011. The $6.3 billion of liquidity consisted of approximately $4.4
billion cash, approximately $1.4 billion of undrawn funds available through the
$1.75 billion asset-based loan facility and approximately $0.6 billion available
through the euro 450 million European securitization facility.
Capital Spending
Capital expenditures, including maintenance turnaround, catalyst and information
technology related expenditures, were $221 million during first quarter 2010.
CONFERENCE CALL
LyondellBasell will host a conference call today, May 2, 2011, at 10:30 a.m. ET.
Participating on the call will be: Jim Gallogly, Chief Executive Officer; Kent
Potter, Executive Vice President and Chief Financial Officer; Sergey Vasnetsov,
Senior Vice President - Strategic Planning and Transactions; and Doug Pike, Vice
President of Investor Relations. The toll-free dial-in number in the U.S. is
888-982-4611. For international numbers, please go to our website,
lyondellbasell.com, for a complete listing of toll-free
numbers by country. The pass code for all numbers is 9777386.
A replay of the call will be available from 2:00 p.m. ET May 2 to 8:00 a.m. ET on
June 2. The replay dial-in numbers are 800-964-3620 (U.S.) and +1 203-369-3425
(international). The pass code for each is 5674.
A copy of the slides that accompany the call will be available on our website at
lyondellbasell.com.
ABOUT LYONDELLBASELL
LyondellBasell (LYB) is one of the world's largest plastics, chemical and
refining companies. The company manufactures products at 58 sites in 18
countries. LyondellBasell products and technologies are used to make items that
improve the quality of life for people around the world including packaging,
electronics, automotive components, home furnishings, construction materials and
biofuels. More information about LyondellBasell can be found at
lyondellbasell.com.
FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters
that are not historical facts are forward-looking statements. These
forward-looking statements are based upon assumptions of management which are
believed to be reasonable at the time made and are subject to significant risks
and uncertainties. Actual results could differ materially based on factors
including, but not limited to, the business cyclicality of the chemical, polymers
and refining industries; the availability, cost and price volatility of raw
materials and utilities, particularly the cost of oil and natural gas;
competitive product and pricing pressures; labor conditions; our ability to
attract and retain key personnel; operating interruptions (including leaks,
explosions, fires, weather-related incidents, mechanical failure, unscheduled
downtime, supplier disruptions, labor shortages, strikes, work stoppages or other
labor difficulties, transportation interruptions, spills and releases and other
environmental risks); the supply/demand balances for our and our joint ventures'
products, and the related effects of industry production capacities and operating
rates; our ability to achieve expected cost savings and other synergies; legal
and environmental proceedings; tax rulings, consequences or proceedings;
technological developments, and our ability to develop new products and process
technologies; current and potential governmental regulatory actions; political
unrest and terrorist acts; risks and uncertainties posed by international
operations, including foreign currency fluctuations; and our ability to comply
with debt covenants and service our substantial debt. Additional factors that
could cause results to differ materially from those described in the
forward-looking statements can be found in the "Risk Factors" section of our Form
10-K for the year ended December 31, 2010, which can be found at
lyondellbasell.com on the Investor Relations page and on the
Securities and Exchange Commission's website at sec.gov.
NON-GAAP MEASURES
This release makes reference to certain "non-GAAP" financial measures as defined
in Regulation G of the U.S. Securities Exchange Act of 1934, as amended. We
report our financial results in accordance with U.S. generally accepted
accounting principles, but believe that certain non-GAAP financial measures
provide useful supplemental information to investors regarding the underlying
business trends and performance of the company's ongoing operations and are
useful for period-over-period comparisons of such operations. These non-GAAP
financial measures should be considered as a supplement to, and not as a
substitute for, or superior to, the financial measures prepared in accordance
with GAAP.
We have included EBITDA in this press release, as we believe that EBITDA is a
measure commonly used by investors. However, EBITDA, as presented herein, may not
be comparable to a similarly titled measure reported by other companies due to
differences in the way the measure is calculated. For purposes of this release,
EBITDA for predecessor periods means earnings before interest, taxes,
depreciation, amortization and restructuring costs, as adjusted for other items
management does not believe are indicative of the Company's underlying results of
operations such as impairment charges, reorganization items, the effect of
mark-to-market accounting on our warrants and current cost inventory adjustments.
EBITDA for successor periods means earnings before interest, taxes, depreciation
and amortization, as adjusted for the same items, to the extent applicable in the
successor periods. EBITDA also includes dividends from joint ventures. EBITDA
should not be considered an alternative to profit or operating profit for any
period as an indicator of our performance, or as alternatives to operating cash
flows as a measure of our liquidity.
Reconciliations of non-GAAP financial measures to their nearest comparable GAAP
financial measures are provided in the financial tables at the end of this
release.
OTHER FINANCIAL MEASURE PRESENTATION NOTES
As a result of the Company's reorganization proceedings and its emergence from
Chapter 11, financial results are prepared and disclosed for a predecessor
company for the time period before May 1, 2010, and the successor company for
time periods after April 30, 2010, the date of emergence. For financial
accounting purposes, the predecessor and successor companies are considered to be
two separate entities. Further, the reorganization under Chapter 11 and the
application of fresh-start accounting make comparisons of the predecessor and
successor periods difficult. The primary impacts affecting the comparisons
include (i) significant changes to our inventory valuations; (ii) lower
depreciation and amortization expense; and (iii) lower interest expense. In
connection with the application of fresh-start accounting, we were required to
write our inventory up to fair market value, which was significant given the high
crude oil prices at April 30, 2010. However, in the fourth quarter 2010, prices
rose to levels close to those at April 30, 2010, and it became necessary to
reverse significant portions of the LCM charges taken in the second and third
quarters. The lower depreciation and amortization expenses in the successor
period are the result of the revaluation of assets in connection with fresh-start
accounting. Lower interest expense is the result of the substantial changes to
the balance sheet as a result of the reorganization.
Prior to emergence from Chapter 11, we utilized a combination of First-In,
First-Out and Last-In, First-Out inventory methods for financial reporting. For
purposes of evaluating segment results, management reviewed operating results
using current cost, which approximates LIFO. As supplementary information, and
for our segment reporting, we provide EBITDA information on a current cost basis
for periods prior to our emergence from Chapter 11. Since emergence from Chapter
11, we have utilized the LIFO inventory methodology and EBITDA information for
periods after our emergence is on a LIFO basis. The combined financial results
and measures that are disclosed in this press release, including EBITDA,
therefore use both current cost and LIFO methodologies.
This release contains time sensitive information that is accurate only as of the
time hereof. Information contained in this release is unaudited and subject to
change. LyondellBasell undertakes no obligation to update the information
presented herein except to the extent required by law.
Media Contact: David Harpole (713) 309-4125 Investor Contact: Doug Pike (713)
309-4590
Table 8 - Reconciliation of Segment Information to Consolidated Financial Information
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PredecessorSuccessor
-----------------------------------------------------------------------------------------------------------------------------------
20102011
------------------------------------------------------------------------------------------------------------------------------------
(Millions of U.S. dollars)Q1Q4Q1
----------------------------------------------------------------------------------------------------------------------------------
Sales and other operating revenues: (a)
Olefins & Polyolefins - Americas$3,020$3,155$ 3,572
Olefins & Polyolefins - Europe, Asia, International3,1193,3423,988
Intermediates & Derivatives1,3161,3611,648
Refining & Oxyfuels3,4154,0514,720
Technology110133139
Other/elims(1,225)(1,432)(1,815)
------------------------------------------------------------------------------------------------------------
Total$9,755$10,610$ 12,252
Operating income (loss): (a)
Olefins & Polyolefins - Americas$145$446$ 421
Olefins & Polyolefins - Europe, Asia, International7166179
Intermediates & Derivatives123196234
Refining & Oxyfuels(128)144164
Technology31866
Other(59)(16)1
Current cost adjustment184--
------------------------------------------------------------------------------------------------------------
Total$367$844$ 1,065
Depreciation and amortization:
Olefins & Polyolefins - Americas$119$58$ 58
Olefins & Polyolefins - Europe, Asia, International815357
Intermediates & Derivatives692834
Refining & Oxyfuels1354342
Technology173224
Other3(7)-
------------------------------------------------------------------------------------------------------------
Total$424$207$ 215
EBITDA: (a)(b)
Olefins & Polyolefins - Americas$274$505$ 484
Olefins & Polyolefins - Europe, Asia, International152125333
Intermediates & Derivatives196228270
Refining & Oxyfuels3212210
Technology474491
Other(32)(29)14
------------------------------------------------------------------------------------------------------------
Total EBITDA6401,0851,402
2010 LCM inventory valuation adjustments-(323)-
------------------------------------------------------------------------------------------------------------
Total excluding 2010 LCM inventory valuation adjustments$640$762$ 1,402
Capital, turnarounds and IT deferred spending:
Olefins & Polyolefins - Americas$69$56$ 66
Olefins & Polyolefins - Europe, Asia, International594342
Intermediates & Derivatives7325
Refining & Oxyfuels6452101
Technology1097
Other4121
------------------------------------------------------------------------------------------------------------
Total213204222
Deferred charges included above(74)(4)(1)
------------------------------------------------------------------------------------------------------------
Capital expenditures(c)$139$200$ 221
(a)For periods prior to May 1, 2010, Predecessor segment operating income and EBITDA were determined on a current cost basis.For periods following May 1, 2010, Successor operating income and EBITDA were determined using the LIFO method of inventory accounting.
(b)See Table 9 for a reconciliation of total EBITDA, excluding LCM inventory valuation adjustments, to net income.
(c)Deferred IT spending is excluded from capital expenditures for all periods presented.Turnarounds, which are classified as property, plant and equipment from May 1, 2010, were excluded from capital expenditures for periods prior to May 1, 2010.
Table 9 - Reconciliation of EBITDA to Net Income
------------------------------------------------------------------------------------------------------------------------------------------------------
Predecessor
---------------------------------------------------------------------------
2009
---------------------------------------------------------------------------
(Millions of U.S. dollars)Q1Q2Q3Q4YTD
-------------------------------------------------------------------
Segment EBITDA:(a)
Olefins & Polyolefins - Americas$20$207$272$244$743
Olefins & Polyolefins - Europe, Asia, International(5)10918651341
Intermediates & Derivatives148110143134535
Refining & Oxyfuels9362107(7)255
Technology661016676309
Other68(52)92853
--------------------------------
Total EBITDA3905377835262,236
--------------------------------
Total EBITDA excluding LCM inventory valuation adjustments$390$537$783$526$2,236
Add:
Income (loss) from equity investment(20)22(168)(15)(181)
Unrealized foreign exchange (loss) gain1598141(61)193
Deduct:
Depreciation and amortization(416)(479)(443)(436)(1,774)
Impairment charge- -(5)- -(12)(17)
Reorganization items(948)(124)(928)(961)(2,961)
Interest expense, net(425)(498)(441)(413)(1,777)
Joint venture dividends received(2)(7)(12)(5)(26)
Benefit from income taxes432873325601,411
Current cost adjustment to inventory(41)1888(36)29
Other(2)(2)(3)3(4)
--------------------------------
LyondellBasell Industries net loss(1,017)(353)(651)(850)(2,871)
Less: Net loss attributable to non-controlling interests12126
--------------------------------
$(1,016)$(351)$(650)$(848)$(2,865)
(a) For periods prior to May 1, 2010, Predecessor segment operating income and EBITDA were determined on a current cost basis.
Table 9 - Reconciliation of EBITDA to Net Income
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombinedSuccessor
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
20102011
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
April 1 -May 1 -Jan. 1 -May 1 -
(Millions of U.S. dollars)Q1April 30June 30Q2Q3Q4April 30Dec. 31YTDQ1
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Segment EBITDA: (a)
Olefins & Polyolefins - Americas$274$216$198$414$492$505$490$1,195$1,685$484
Olefins & Polyolefins - Europe, Asia, International15278174252289125230588818333
Intermediates & Derivatives19656128184243228252599851270
Refining & Oxyfuels376219714021279373452210
Technology4714294378446115121291
Other(32)87280(44)(29)(24)(1)(25)14
-----------------------------------------------------------------------------------------------
Total EBITDA6404486221,0701,1981,0851,0882,9053,9931,402
-----------------------------------------------------------------------------------------------
2010 LCM inventory valuation adjustments- -- -33333332(323)- -4242- -
Total EBITDA excluding LCM
inventory valuation adjustments$640$448$955$1,403$1,230$762$1,088$2,947$4,035$1,402
Add:
Income (loss) from equity investment552927562930848617058
Unrealized foreign exchange (loss) gain(202)(62)(14)(76)(7)(1)(264)(22)(286)(3)
Gain on sale of Flavors and Fragrances business- -- -- -- -- -64- -6464- -
Deduct:
2010 LCM inventory valuation adjustments- -- -(333)(333)(32)323- -(42)(42)- -
Depreciation and amortization(424)(141)(129)(270)(222)(207)(565)(558)(1,123)(215)
Impairment charge(3)(6)- -(6)- -(28)(9)(28)(37)(5)
Reorganization items2077,373(8)7,365(13)(2)7,580(23)7,557(2)
Interest expense, net(409)(299)(120)(419)(186)(222)(708)(528)(1,236)(155)
Joint venture dividends received(13)(5)(28)(33)-(6)(18)(34)(52)(96)
(Provision for) benefit from income taxes(12)1,135(28)1,107(254)1121,123(170)953(263)
Fair value change in warrants- -- -1717(76)(55)- -(114)(114)(59)
Current cost adjustment to inventory18415- -15- -- -199- -199- -
Other(15)9817(2)(4)(6)2(4)(2)
-----------------------------------------------------------------------------------------------
LyondellBasell Industries88,4963478,8434677668,5041,58010,084660
net income (loss)
Less: Net (income) loss attributable to258(5)5375607673
non-controlling interests
-----------------------------------------------------------------------------------------------
$10$8,554$342$8,896$474$771$8,564$1,587$10,151$663
(a)For periods prior to May 1, 2010, Predecessor segment operating income and EBITDA were determined on a current cost basis.For periods following May 1, 2010, Successor operating income and EBITDA were determined using the LIFO method of inventory accounting.
Table 10 - Selected Segment Operating Information
---------------------------------------------------------------------------------------------------------------------------------
20102011
-----------------
Q1Q4Q1
---------------
Olefins and Polyolefins - Americas
Volumes (million pounds)
Ethylene produced2,0192,1522,089
Propylene produced755695769
Polyethylene sold1,3301,3471,415
Polypropylene sold615611593
Benchmark Market Prices
West Texas Intermediate crude oil (USD per barrel)78.8885.2494.60
Natural gas (USD per million BTUs)5.364.174.19
U.S. weighted average cost of ethylene production (cents/pound)34.333.832.6
U.S. ethylene (cents/pound)52.347.349.3
U.S. polyethylene [high density] (cents/pound)83.383.787.7
U.S. propylene (cents/pound)61.557.371.7
U.S. polypropylene [homopolymer] (cents/pound)87.883.8100.8
Olefins and Polyolefins - Europe, Asia, International
Volumes (million pounds)
Ethylene produced861913997
Propylene produced509560608
Polyethylene sold1,2391,2751,314
Polypropylene sold1,5381,8321,704
Benchmark Market Prices
Western Europe weighted average cost of ethylene production (euro 0.01 per pound)28.735.734.7
Western Europe ethylene (euro 0.01 per pound)41.644.352.0
Western Europe polyethylene [high density] (euro 0.01 per pound)51.452.562.1
Western Europe propylene (euro 0.01 per pound)38.942.650.8
Western Europe polypropylene [homopolymer] (euro 0.01 per pound)51.358.966.6
Intermediates and Derivatives
Volumes (million pounds)
Propylene oxide and derivatives869860838
Ethylene oxide and derivatives265251288
Styrene monomer589685852
Acetyls379484439
TBA Intermediates472425485
Refining and Oxyfuels
Volumes
Houston Refining crude processing rate (thousands of barrels per day)263233258
Berre Refinery crude processing rate (thousands of barrels per day)7380101
MTBE/ETBE sales volumes (million gallons)189218196
Benchmark Market Margins
WTI - 2-1-1 (USD per barrel)6.858.9719.06
WTI - Maya (USD per barrel)8.949.414.63
Urals 4-1-2-1 (USD per barrel)5.916.647.81
MTBE - Northwest Europe (cents per gallon)48.218.458.0
Source: CMAI, Bloomberg, LyondellBasell Industries
Table 11 - Unaudited Income Statement Information
------------------------------------------------------------------------------------------------------------------
PredecessorSuccessor
---------------------------------
20102011
---------------------------------
(Millions of U.S. dollars, except per share data)Q1Q4Q1
-------------------------------
Sales and other operating revenues$9,755$10,610$12,252
Cost of sales9,1309,49410,943
Selling, general and administrative expenses217231211
Research and development expenses414133
-----------------
Operating income3678441,065
Income from equity investments553058
Interest expense, net(409)(222)(155)
Other expense, net(200)(60)(43)
-----------------
Income (loss) before income taxes and reorganization items(187)592925
Reorganization items207(2)(2)
-----------------
Income before taxes20590923
Provision for (benefit from) income taxes12(112)263
-----------------
Income from continuing operations8702660
Income from discontinued operations, net of tax- -64- -
-----------------
Net income8766660
Less: Net loss attributable to non-controlling interests253
-----------------
Net income attributable to the Company$10$771$663
Table 12 - Unaudited Cash Flow Information
--------------------------------------------------------------------------------------------
PredecessorSuccessor
---------------------------------
20102011
-----------------------------
(Millions of U.S. dollars)Q1Q4Q1
---------------------------
Net cash provided by (used in) operating activities$(373)$728$221
Net cash used in investing activities(127)(46)(216)
Net cash provided by (used in) financing activities490(1,239)28
Table 13 - Unaudited Balance Sheet Information
------------------------------------------------------------------------------------------------------------
PredecessorSuccessor
-------------------------------------
Mar. 31,Dec. 31,Mar. 31,
(Millions of U.S. dollars)201020102011
-----------------------------------
Cash and cash equivalents$537$4,222$4,383
Short-term investments2- -- -
Accounts receivable, net3,6423,7474,764
Inventories3,5904,8245,726
Prepaid expenses and other current assets9329861,100
-------------------
Total current assets8,70313,77915,973
Property, plant and equipment, net14,6877,1907,440
Investments and long-term receivables:
Investment in PO joint ventures880437444
Equity investments1,1251,5871,586
Related party receivable141414
Other investments and long-term receivables906766
Goodwill- -787807
Intangible assets, net1,7481,3601,344
Other assets, net338273274
-------------------
Total assets$27,585$25,494$27,948
Current maturities of long-term debt$487$4$253
Short-term debt6,6754251
Accounts payable2,2132,7614,099
Accrued liabilities1,2201,7051,711
Deferred income taxes163244246
-------------------
Total current liabilities10,7584,7566,360
Long-term debt3046,0365,805
Other liabilities1,3172,1832,043
Deferred income taxes2,0129231,027
Liabilities subject to compromise22,058- -- -
Stockholders' equity (deficit)(8,975)11,53512,671
Non-controlling interests1116142
-------------------
Total liabilities and stockholders' equity (deficit)$27,585$25,494$27,948 |
