LyondellBasell Reports Record 2012 Earnings
LyondellBasell Reports Record 2012 Earnings
PR Newswire
ROTTERDAM, Netherlands, Feb. 1, 2013
ROTTERDAM, Netherlands, Feb. 1, 2013 /PRNewswire/ --
Full Year 2012 Highlights
o Record earnings of $2,858 million income from continuing operations or
$4.96 diluted earnings per share; EBITDA of $5,856 million
o Strong performance led by advantaged positions in Olefins and Polyolefins
– Americas and Intermediates and Derivatives segments
o Paid $2.4 billion in dividends, or $4.20 per share, a yield of
approximately 7 percent
o Joined the S&P 500 index
Fourth Quarter 2012 Highlights
o $645 million income from continuing operations or $1.13 diluted earnings
per share, and EBITDA of $1,289 million
o Strong North America olefins margins with approximately 85 percent of
ethylene production sourced from natural gas liquids (NGLs)
o Business followed the typical fourth quarter trends
o Paid a special dividend of $2.75 per share or $1.6 billion
LyondellBasell Industries (NYSE: 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 Ended Year Ended
Millions of U.S. December September December December December
dollars 31, 30, 31, 31, 31,
(except share 2012 2012 2011 2012 2011
data)
Sales and other $11,097 $11,273 $10,981 $45,352 $48,183
operating revenues
Net income (loss)^(a) 623 844 (218) 2,834 2,140
Income from continuing 645 851 27 2,858 2,472
operations
Diluted earnings per
share (U.S. dollars):
Net income 1.09 1.46 (0.38) 4.92 3.74
(loss)^(b)
Income from
continuing 1.13 1.47 0.05 4.96 4.32
operations
Diluted share count 578 577 575 577 572
(millions)
EBITDA^(c) 1,289 1,565 766 5,856 5,585
EBITDA excluding LCM
inventory
1,289 1,494 766 5,856 5,585
valuation adjustments
(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 Ended Year Ended
Millions of U.S. dollars December September December December December
31, 30, 31, 31, 31,
(except share data) 2012 2012 2011 2012 2011
Pretax charges (benefits):
Charges and premiums related $ - - $ - - $431 $329 $443
to repayment of debt
Reorganization items - - - - 15 (4) 45
Corporate restructurings 53 - - 18 53 93
Impairments - - - - - - 22 23
Sale of precious metals - - - - - - - - (41)
Warrants - mark to market - - - - 6 11 37
Legal recovery - - (24) - - (24) - -
Insurance settlement - - - - - - (100) (34)
Unfavorable contract reserve (28) - - - - (28) - -
reversal
Environmental accruals - - - - - - - - 16
Asset retirement obligations - - - - - - - - 10
Settlement related to Houston - - - - (15) - - (15)
refinery crane incident
Lower of cost or market - - (71) - - - - - -
inventory adjustment
Total pretax charges (benefits) 25 (95) 455 259 577
Provision for (benefit from)
income tax related to these (17) 35 (154) (96) (169)
items
After-tax effect of net charges 8 (60) 301 163 408
(credits)
Effect on diluted earnings per $ - - $0.11 ($0.52) ($0.26) ($0.69)
share
"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 Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
Millions of U.S. 2012 2012 2011 2012 2011
dollars
Operating income $693 $738 $328 $2,650 $1,855
EBITDA 769 820 407 2,963 2,140
EBITDA excluding 769 749 407 2,963 2,140
LCM charges
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 Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
Millions of U.S. 2012 2012 2011 2012 2011
dollars
Operating income ($94) $15 ($73) $127 $435
(loss)
EBITDA 50 75 45 561 894
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 Ended Year Ended
December 31, September 30, December December December
31, 31, 31,
Millions of U.S. dollars 2012 2012 2011 2012 2011
Operating income $246 $424 $185 $1,430 $1,156
EBITDA 305 475 235 1,653 1,392
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&D segment 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 Ended Year Ended
December 31, September 30, December December December
31, 31, 31,
Millions of U.S. dollars 2012 2012 2011 2012 2011
Operating income $86 $114 $3 $334 $809
EBITDA 122 150 67 481 977
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 Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
Millions of U.S. 2012 2012 2011 2012 2011
dollars
Operating income $23 $31 $11 $122 $107
EBITDA 43 48 36 197 214
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, www.lyondellbasell.com/teleconference, 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
http://www.lyondellbasell.com/earnings.
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 Index. LyondellBasell
(www.lyondellbasell.com) 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 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; 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, 2011, which can be found at
www.lyondellbasell.com on the Investor Relations page and on the Securities
and Exchange Commission's website at www.sec.gov
NON-GAAP MEASURES
This release makes reference to certain "non-GAAP" financial measures as
defined in Regulation G of the U.S. Securities Exchange Act of 1934, as
amended. We report our financial results in accordance with U.S. generally
accepted accounting principles, but believe that certain non-GAAP financial
measures provide useful supplemental information to investors regarding the
underlying business trends and performance of the company's ongoing operations
and are useful for period-over-period comparisons of such operations. These
non-GAAP financial measures should be considered as a supplement to, and not
as a substitute for, or superior to, the financial measures prepared in
accordance with GAAP.
We have included EBITDA in this press release. 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 means net income before net interest expense,
income taxes, depreciation and amortization, reorganization items, income from
equity investments, income (loss) attributable to non-controlling interests,
net income (loss) from discontinued operations, plus joint venture dividends,
as adjusted for other items management does not believe are indicative of the
Company's underlying results of operations such as impairment charges, asset
retirement obligations and the effect of mark-to-market accounting on our
warrants. The specific items for which EBITDA is adjusted in each applicable
reporting period may only be relevant in certain periods and are disclosed in
the reconciliation of non-GAAP financial measures table. 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.
Quantitative reconciliations of non-GAAP financial measures are provided in
Table 9 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.
Media Contact: David A. Harpole +1 713-309-4125
Investor Contact: Douglas J. Pike +1 713-309-7141
Table 8 - Reconciliation of Segment Information to Consolidated Financial Information
2011 2012
(Millions of Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
U.S. dollars)
Sales and
other
operating
revenues:
Olefins &
Polyolefins - $ 3,572 $ 4,010 $ 3,875 $ 3,423 $ 14,880 $ 3,349 $ 3,283 $ 3,217 $ 3,085 $ 12,934
Americas
Olefins &
Polyolefins - 3,988 4,292 3,954 3,357 15,591 3,898 3,575 3,448 3,600 14,521
EAI
Intermediates 2,331 2,536 2,491 2,142 9,500 2,485 2,285 2,637 2,251 9,658
& Derivatives
Refining 2,867 3,996 3,955 2,888 13,706 3,203 3,496 3,272 3,320 13,291
Technology 139 126 129 112 506 119 115 124 140 498
Other/elims (1,517) (1,654) (1,888) (941) (6,000) (1,320) (1,506) (1,425) (1,299) (5,550)
Continuing $ 11,380 $ 13,306 $ 12,516 $ 10,981 $ 48,183 $ 11,734 $ 11,248 $ 11,273 $ 11,097 $ 45,352
Operations
Discontinued $ 872 $ 736 $ 781 $ 463 $ 2,852 $ 145 $ 42 $ 56 $ 35 $ 278
Operations
Operating
income (loss):
Olefins &
Polyolefins - $ 421 $ 508 $ 598 $ 328 $ 1,855 $ 519 $ 700 $ 738 $ 693 $ 2,650
Americas
Olefins &
Polyolefins - 175 203 130 (73) 435 3 203 15 (94) 127
EAI
Intermediates 276 327 368 185 1,156 370 390 424 246 1,430
& Derivatives
Refining 158 258 390 3 809 10 124 114 86 334
Technology 66 23 7 11 107 38 30 31 23 122
Other (1) (9) - - (15) (25) - - 2 6 5 13
Continuing $ 1,095 $ 1,310 $ 1,493 $ 439 $ 4,337 $ 940 $ 1,449 $ 1,328 $ 959 $ 4,676
Operations
Discontinued $ (30) $ (45) $ (26) $ (238) $ (339) $ 6 $ (15) $ (8) $ (6) $ (23)
Operations
Depreciation
and
amortization:
Olefins &
Polyolefins - $ 58 $ 59 $ 64 $ 65 $ 246 $ 65 $ 71 $ 69 $ 76 $ 281
Americas
Olefins &
Polyolefins - 57 66 69 70 262 69 69 63 84 285
EAI
Intermediates 44 48 46 48 186 47 48 49 50 194
& Derivatives
Refining 32 35 37 49 153 38 37 36 37 148
Technology 24 16 21 23 84 18 19 18 18 73
Other - - - - - - - - - - - - - - 1 1 2
Continuing $ 215 $ 224 $ 237 $ 255 $ 931 $ 237 $ 244 $ 236 $ 266 $ 983
Operations
Discontinued $ - - $ - - $ - - $ - - $ - - $ - - $ - - $ - - $ - - $ - -
Operations
EBITDA: ^(a)
Olefins &
Polyolefins - $ 484 $ 577 $ 672 $ 407 $ 2,140 $ 598 $ 776 $ 820 $ 769 $ 2,963
Americas
Olefins &
Polyolefins - 329 273 247 45 894 101 335 75 50 561
EAI
Intermediates 321 419 417 235 1,392 418 455 475 305 1,653
& Derivatives
Refining 190 293 427 67 977 48 161 150 122 481
Technology 91 42 45 36 214 57 49 48 43 197
Other 5 (11) (2) (24) (32) 6 (2) (3) - - 1
Continuing $ 1,420 $ 1,593 $ 1,806 $ 766 $ 5,585 $ 1,228 $ 1,774 $ 1,565 $ 1,289 $ 5,856
Operations
Discontinued $ (18) $ (40) $ (18) $ (230) $ (306) $ 8 $ (15) $ (9) $ (6) $ (22)
Operations
Capital,
turnarounds
and IT
deferred
spending:
Olefins &
Polyolefins - $ 66 $ 138 $ 149 $ 72 $ 425 $ 102 $ 135 $ 126 $ 105 $ 468
Americas
Olefins &
Polyolefins - 42 37 46 110 235 60 39 60 95 254
EAI
Intermediates 5 15 26 55 101 18 24 44 73 159
& Derivatives
Refining 96 49 45 34 224 38 27 24 47 136
Technology 7 3 8 8 26 9 8 12 14 43
Other 1 10 - - 6 17 2 3 1 (1) 5
Total 217 252 274 285 1,028 229 236 267 333 1,065
Deferred
charges (1) - - (2) (4) (7) (1) (3) (1) - - (5)
included
above
Continuing $ 216 $ 252 $ 272 $ 281 $ 1,021 $ 228 $ 233 $ 266 $ 333 $ 1,060
Operations
Discontinued $ 5 $ 9 $ 7 $ 8 $ 29 $ - - $ - - $ - - $ - - $ - -
Operations
(a) See Table 9 for a reconciliation of total EBITDA to income from continuing operations.
Table 9 - Reconciliation of EBITDA to Income from Continuing Operations
2011 2012
(Millions of Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
U.S. dollars)
Segment EBITDA:
Olefins &
Polyolefins - $ 484 $ 577 $ 672 $ 407 $ 2,140 $ 598 $ 776 $ 820 $ 769 $ 2,963
Americas
Olefins &
Polyolefins - 329 273 247 45 894 101 335 75 50 561
EAI
Intermediates & 321 419 417 235 1,392 418 455 475 305 1,653
Derivatives
Refining 190 293 427 67 977 48 161 150 122 481
Technology 91 42 45 36 214 57 49 48 43 197
Other 5 (11) (2) (24) (32) 6 (2) (3) - - 1
Total EBITDA 1,420 1,593 1,806 766 5,585 1,228 1,774 1,565 1,289 5,856
Adjustments to
EBITDA:
Legal recovery - - - - - - - - - - - - - - (24) - - (24)
Unfavorable
contract - - - - - - - - - - - - - - - - (28) (28)
reserve
reversal
Lower of cost
or market
inventory
- - - - - - - - - - - - 71 (71) - - - -
adjustment
Sale of - - (41) - - - - (41) - - - - - - - - - -
precious metals
Corporate - - 61 14 18 93 - - - - - - 53 53
restructurings
Environmental - - 16 - - - - 16 - - - - - - - - - -
accruals
Settlement
related to
Houston
refinery crane - - - - - - (15) (15) - - - - - - - - - -
incident
Insurance (34) - - - - - - (34) - - (100) - - - - (100)
settlement
Total Adjusted 1,386 1,629 1,820 769 5,604 1,228 1,745 1,470 1,314 5,757
EBITDA
Add:
Income from
equity 58 73 52 33 216 46 27 32 38 143
investments
Deduct:
Adjustments to 34 (36) (14) (3) (19) - - 29 95 (25) 99
EBITDA
Depreciation
and (215) (224) (237) (255) (931) (237) (244) (236) (266) (983)
amortization
Impairment - - (4) (19) - - (23) (22) - - - - - - (22)
charges
Asset
retirement - - - - (10) - - (10) - - - - - - - - - -
obligation
Reorganization (2) (28) - - (15) (45) 5 (1) - - - - 4
items
Interest (155) (164) (146) (542) (1,007) (95) (409) (67) (69) (640)
expense, net
Joint venture
dividends (96) (11) (55) (44) (206) (14) (73) (10) (50) (147)
received
Provision for (263) (388) (506) 98 (1,059) (301) (306) (435) (285) (1,327)
income taxes
Non-controlling (3) (1) - - (3) (7) (1) (2) (2) (9) (14)
interests
Fair value
change in (59) 6 22 (6) (37) (10) - - (1) - - (11)
warrants
Other (3) (1) 5 (5) (4) (5) 2 5 (3) (1)
Income from
continuing 682 851 912 27 2,472 594 768 851 645 2,858
operations
Adjustments to (34) 36 14 3 19 - - (29) (95) 25 (99)
EBITDA
Premiums and
charges on
early
repayment of - - 12 - - 431 443 - - 329 - - - - 329
debt
Reorganization 2 28 - - 15 45 (5) 1 - - - - (4)
items
Asset
retirement - - - - 10 - - 10 - - - - - - - - - -
obligation
Fair value
change in 59 (6) (22) 6 37 10 - - 1 - - 11
warrants
Impairment - - 4 19 - - 23 22 - - - - - - 22
charges
Tax impact of
net income
(loss)
11 (21) (5) (154) (169) (5) (109) 35 (17) (96)
adjustments
Adjusted income
from continuing $ 720 $ 904 $ 928 $ 328 $ 2,880 $ 616 $ 960 $ 792 $ 653 $ 3,021
operations
Earnings (loss)
per share:
Diluted
earnings per
share –
continuing $ 1.19 $ 1.46 $ 1.54 $ 0.05 $ 4.32 $ 1.03 $ 1.33 $ 1.47 $ 1.13 $ 4.96
operations
Adjustments to
continuing 0.07 0.09 0.03 0.52 0.69 0.04 0.32 (0.11) - - 0.26
operations
Adjusted
diluted $ 1.26 $ 1.55 $ 1.57 $ 0.57 $ 5.01 $ 1.07 $ 1.65 $ 1.36 $ 1.13 $ 5.22
earnings per
share
Table 10 - Selected Segment Operating Information
2011 2012
Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
Olefins and
Polyolefins -
Americas
Volumes
(million
pounds)
Ethylene 2,089 1,929 2,134 2,201 8,353 1,988 2,134 2,401 2,449 8,972
produced
Propylene 769 556 838 744 2,907 533 615 633 582 2,363
produced
Polyethylene 1,405 1,377 1,368 1,343 5,493 1,448 1,316 1,434 1,441 5,639
sold
Polypropylene 685 704 727 727 2,843 735 719 740 695 2,889
sold
Benchmark
Market Prices
West Texas
Intermediate
crude oil (USD 94.60 102.34 89.54 94.06 95.11 103.03 93.35 92.20 88.23 94.15
per barrel)
Light
Louisiana
Sweet ("LLS") 107.83 118.34 112.46 110.81 112.40 119.85 108.24 109.36 109.47 111.70
crude oil (USD
per barrel)
Natural gas
(USD per 4.19 4.43 4.31 3.64 4.14 2.65 2.33 2.92 3.49 2.90
million BTUs)
U.S. weighted
average cost
of ethylene
production
(cents/pound) 32.6 33.8 34.3 41.6 35.6 28.5 18.4 19.7 18.6 21.2
U.S. ethylene 49.3 57.5 55.8 54.4 54.3 54.9 46.9 45.4 45.7 48.3
(cents/pound)
U.S.
polyethylene 61.7 68.7 63.0 59.7 63.3 67.0 63.0 59.3 59.7 62.3
[high density]
(cents/pound)
U.S. propylene 71.7 87.3 76.5 57.8 73.3 67.2 64.2 49.8 54.5 58.9
(cents/pound)
U.S.
polypropylene 89.3 99.7 90.2 70.7 87.5 81.2 76.7 63.8 68.5 72.5
[homopolymer]
(cents/pound)
Olefins and
Polyolefins -
Europe, Asia,
International
Volumes
(million
pounds)
Ethylene 997 999 926 807 3,729 947 930 802 833 3,512
produced
Propylene 608 631 560 487 2,286 577 562 493 502 2,134
produced
Polyethylene 1,305 1,279 1,349 1,210 5,143 1,316 1,137 1,253 1,257 4,963
sold
Polypropylene 1,551 1,494 1,489 1,543 6,077 1,541 1,337 1,633 1,574 6,085
sold
Benchmark
Market Prices
Western Europe
weighted
average cost
of ethylene 34.7 35.4 37.3 38.5 36.5 45.4 31.7 39.6 38.9 38.9
production
(€0.01 per
pound)
Western Europe
ethylene 52.0 54.7 50.3 49.7 51.7 55.1 58.6 53.1 58.1 56.2
(€0.01 per
pound)
Western Europe
polyethylene
[high density] 55.9 59.3 54.0 52.5 55.4 58.6 60.9 57.2 61.0 59.4
(€0.01
per pound)
Western Europe
propylene 50.8 55.3 50.2 46.5 50.7 50.1 54.1 47.6 50.8 50.7
(€0.01 per
pound)
Western Europe
polypropylene
[homopolymer] 61.3 63.8 57.0 53.0 58.8 57.9 60.4 56.1 58.7 58.3
(€0.01
per pound)
Intermediates
and Derivatives
Volumes
(million
pounds)
Propylene
oxide and 798 737 721 684 2,940 774 743 762 663 2,942
derivatives
Ethylene oxide
and 288 277 281 254 1,100 312 275 311 260 1,158
derivatives
Styrene 852 817 714 682 3,065 704 678 798 794 2,974
monomer
Acetyls 439 417 411 370 1,637 489 444 499 404 1,836
TBA 485 459 433 418 1,795 462 448 441 399 1,750
Intermediates
Volumes
(million
gallons)
MTBE/ETBE 191 195 227 205 818 205 189 256 199 849
Benchmark
Market Margins
MTBE -
Northwest 58.9 92.7 94.1 87.0 83.1 125.1 122.0 149.9 76.3 118.2
Europe (cents
per gallon)
Refining
Volumes
(thousands of
barrels per
day)
Heavy crude
oil processing 258 263 269 262 263 259 267 240 255 255
rate
Benchmark
Market Margins
Light crude 6.00 10.28 9.54 5.26 7.80 9.34 14.04 14.71 7.91 11.50
oil - 2-1-1
Light crude
oil - Maya 17.87 15.50 13.99 7.45 13.76 10.81 9.12 11.94 16.45 12.05
differential
Source: IHS, Bloomberg, LyondellBasell Industries
Note - Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect
discounted prices.
Table 11 - Unaudited Income Statement Information
2011 2012
(Millions of Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
U.S. dollars)
Sales and other
operating
$ 11,380 $ 13,306 $ 12,516 $ 10,981 $ 48,183 $ 11,734 $ 11,248 $ 11,273 $ 11,097 $ 45,352
revenues
Cost of sales 10,037 11,704 10,734 10,257 42,732 10,532 9,561 9,670 9,832 39,595
Selling, general
and
administrative 215 236 236 231 918 223 201 236 249 909
expenses
Research and
development
expenses 33 56 53 54 196 39 37 39 57 172
Operating 1,095 1,310 1,493 439 4,337 940 1,449 1,328 959 4,676
income
Income from
equity 58 73 52 33 216 46 27 32 38 143
investments
Interest (156) (163) (146) (542) (1,007) (95) (409) (67) (69) (640)
expense, net
Other income (50) 47 19 14 30 (1) 8 (7) 2 2
(expense), net
Income (loss)
before income
taxes and
reorganization 947 1,267 1,418 (56) 3,576 890 1,075 1,286 930 4,181
items
Reorganization (2) (28) - - (15) (45) 5 (1) - - - - 4
items
Income (loss) 945 1,239 1,418 (71) 3,531 895 1,074 1,286 930 4,185
before taxes
Provision for
(benefit from)
263 388 506 (98) 1,059 301 306 435 285 1,327
income taxes
Income from
continuing
682 851 912 27 2,472 594 768 851 645 2,858
operations
Income (loss)
from
discontinued
operations, net (22) (48) (17) (245) (332) 5 - - (7) (22) (24)
of tax
Net income 660 803 895 (218) 2,140 599 768 844 623 2,834
(loss)
Net loss
attributable to
non-controlling 3 1 - - 3 7 1 2 2 9 14
interests
Net income
(loss)
attributable
to the Company
$ 663 $ 804 $ 895 $ (215) $ 2,147 $ 600 $ 770 $ 846 $ 632 $ 2,848
shareholders
Table 12 - Unaudited Cash Flow Information
2011 2012
(Millions
of U.S. Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
dollars)
Net cash
provided
by
operating $ 221 $ 1,023 $ 1,528 $ 88 $ 2,860 $ 913 $ 504 $ 2,042 $ 1,328 $ 4,787
activities
Net cash
used in
investing (216) (435) (320) (50) (1,021) (185) (245) (266) (317) (1,013)
activities
Net cash
provided
by (used
in)
28 (324) (115) (4,544) (4,955) (140) 55 (234) (1,826) (2,145)
financing
activities
Table 13 - Unaudited Balance Sheet Information
March June 30, September December March June 30, September December
31, 30, 31, 31, 30, 31,
(Millions of 2011 2011 2011 2011 2012 2012 2012 2012
U.S. dollars)
Cash and cash $ 4,383 $ 4,687 $ 5,609 $ 1,065 $ 1,670 $ 1,950 $ 3,527 $ 2,732
equivalents
Restricted cash - - 250 292 53 9 14 19 5
Accounts 4,764 4,901 4,038 3,778 4,209 3,888 4,083 3,904
receivable, net
Inventories 5,726 5,577 5,682 5,499 5,208 5,759 5,234 5,075
Prepaid
expenses and
other
1,100 1,098 1,097 1,040 1,002 755 532 570
current assets
Total current 15,973 16,513 16,718 11,435 12,098 12,366 13,395 12,286
assets
Property, plant
and equipment, 7,440 7,569 7,363 7,333 7,426 7,237 7,412 7,696
net
Investments and
long-term
receivables:
Investment in
PO joint 444 436 422 412 415 411 405 397
ventures
Equity 1,586 1,654 1,594 1,559 1,605 1,521 1,581 1,583
investments
Other
investments
and
long-term 80 82 71 72 76 70 361 383
receivables
Goodwill 615 621 598 585 595 576 585 591
Intangible 1,344 1,310 1,237 1,177 1,149 1,103 1,073 1,038
assets, net
Other assets, 274 290 264 266 245 261 292 246
net
Total assets $ 27,756 $ 28,475 $ 28,267 $ 22,839 $ 23,609 $ 23,545 $ 25,104 $ 24,220
Current
maturities of $ 253 $ 2 $ 2 $ 4 $ - - $ - - $ - - $ 1
long-term debt
Short-term debt 51 50 49 48 42 48 47 95
Accounts 4,099 3,999 3,307 3,414 3,545 3,004 3,297 3,285
payable
Accrued 1,711 1,613 1,505 1,242 1,049 915 1,177 1,157
liabilities
Deferred income 321 315 315 310 310 277 304 558
taxes
Total current 6,435 5,979 5,178 5,018 4,946 4,244 4,825 5,096
liabilities
Long-term debt 5,805 5,813 5,782 3,980 3,984 4,305 4,305 4,304
Other 2,043 2,110 2,021 2,277 2,281 2,208 2,153 2,327
liabilities
Deferred income 760 947 1,204 917 1,035 1,245 1,460 1,314
taxes
Stockholders' 12,671 13,579 14,025 10,593 11,310 11,492 12,312 11,139
equity
Non-controlling 42 47 57 54 53 51 49 40
interests
Total
liabilities
and
stockholders' $ 27,756 $ 28,475 $ 28,267 $ 22,839 $ 23,609 $ 23,545 $ 25,104 $ 24,220
equity
SOURCE LyondellBasell Industries
Website: http://www.lyondellbasell.com
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