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LyondellBasell Reports Second-Quarter 2010 Results (1)
16 Aug, 2010 @ 08:00 am EDT
ROTTERDAM, Netherlands, Aug. 16 /PRNewswire-FirstCall/ --
Highlights
-- Generated net income of $8,843 million or $203 million excluding a net
$8,640 million after-tax gain on the discharge of liabilities subject to
compromise related to emergence from Chapter 11 and fresh-start
accounting adjustments
-- EBITDAR of $1,403 million excluding emergence-related non-cash Lower of
Cost or Market (LCM) inventory charge - more than double 2Q09 and 1Q10
-- Generally improved business conditions across most segments; strength in
U.S. olefins driven by reliable operations coupled with industry supply
disruptions
-- Significant cash generation; ended quarter with ~$3.8 billion cash,
~$5.0 billion liquidity, net debt of ~$3.6 billion
LyondellBasell Industries today announced net income for the second quarter 2010 of $8,843 million, or $203 million excluding a net $8,640 million after-tax gain on the discharge of liabilities subject to compromise and fresh-start accounting adjustments. Excluding reorganization items, and a $333 million non-cash LCM inventory charge, second-quarter 2010 earnings before interest, income taxes, depreciation and amortization, and restructuring costs (EBITDAR) was $1,403 million. Comparisons with the prior quarter, second quarter 2009 and first six months of 2009 are available in the following table.
Table 1 - LyondellBasell Industries Earnings Summary (a)
2Q 2010 First
(b) 2Q 2009 1Q 2010 Six First Six
Months Months
2010
Millions of dollars (c) 2009
Sales and other operating
revenues $10,484 $7,499 $9,755 $20,239 $13,399
Net income (loss) (d) 8,843 (353) 8 8,851 (1,370)
EBITDAR (e) 1,070 537 640 1,710 927
----------- ----- --- --- ----- ---
EBITDAR excluding LCM and other
inventory valuation
adjustments 1,403 571 640 2,043 1,016
------------------------------- ----- --- --- ----- -----
(a) For all periods prior to May 1, 2010, EBITDAR figures in the table have been prepared on a current cost inventory basis. For periods beginning May 1, 2010, and thereafter, net income, and EBITDAR figures have been prepared using the LIFO (Last-In, First-Out) method of inventory accounting.
(b) Results for the second quarter 2010 represent the combined predecessor (April 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(c) Results for the first six months of 2010 represent the combined predecessor (January 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(d) Includes net income (loss) attributable to non-controlling interests. See Table 11.
(e) Earnings before interest, income taxes, depreciation and amortization, and restructuring costs. EBITDAR figures include dividends received from joint ventures. See Table 9 for a reconciliation of EBITDAR to net income.
On April 30, 2010, LyondellBasell emerged from Chapter 11 bankruptcy with a greatly improved balance sheet, approximately $3.6 billion of liquidity and reduced legal and environmental exposures. The company generated a significant amount of cash during the second quarter and ended June 30 with approximately $3.8 billion of cash, $5.0 billion of liquidity and net debt of approximately $3.6 billion.
Second-quarter 2010 EBITDAR improved versus the first quarter 2010 primarily due to improved ethylene and polyolefin margins in North America and Europe, improved refining and oxyfuel margins and a continued focus on cost control.
Additionally, results reflect the following:
Table 2 - Charges (Benefits) Included in LyondellBasell Industries'
Net Income
First First
2Q 2010 2Q 2009 1Q 2010 Six Six
Months Months
Millions of dollars 2010 2009
Pretax charges
(benefits):
Charge/(benefit) -
Reorganization Items $169 $124 $(207) $(38) $1,072
Gain on discharge of
liabilities subject to
compromise (13,617) - - (13,617) -
Change in net assets
resulting from
application of fresh-
start accounting 5,656 - - 5,656 -
LCM and other inventory
valuation adjustments 333 34 - 333 89
Unplanned maintenance at
the Houston refinery 14 - - 14 -
Provision for (benefit
from) income tax
related to these items (498) (55) 72 (571) (406)
After-tax effect of net
charges (credits) $(7,943) $103 $(135) $(8,223) $755
----------------------- ------- ---- ----- ------- ----
"We emerged from Chapter 11 as a much stronger company," said Jim Gallogly, chief executive officer of LyondellBasell. "Our significantly improved capital and cost structures, coupled with our industry-defining technologies and new management team, position us as a formidable competitor for the future. I am extremely proud of the job our employees have done to restructure the company and move us through bankruptcy in such a short time."
Commenting on the second quarter, Gallogly said, "The second quarter was an excellent start for our new company. Strong U.S. ethylene margins experienced late in the first quarter continued into the second quarter. Our feedstock flexibility and reliable operations, coupled with the leverage of our sizeable portfolio, resulted in improved earnings. European olefins and polyolefins results also improved during the quarter due to higher margins across most products. In the Intermediates and Derivatives segment, the strong performance of the first quarter continued through the second quarter. Industry refining spreads remained close to where they finished the first quarter and oxyfuel margins and volumes experienced their normal seasonal uptick. Overall, we generated a significant amount of cash during the quarter and further enhanced our liquidity."
OUTLOOK
The U.S. ethylene market is in the process of rebalancing following the turnarounds and unplanned industry downtime of the second quarter. In Europe, unplanned industry outages have resulted in improved olefin plant co-product margins. Refining and oxyfuel margins have experienced some decline. Trends in the remaining businesses are generally consistent with those of the first half of the year.
"We took advantage of supply-driven market tightness in several of our businesses during the first half of the year," said Gallogly. "However, our view is that the long-term fundamentals have not changed appreciably. The rates at which the world economy recovers and new capacity comes online in the Middle East and Asia will significantly influence operating rates and margins going forward."
LYONDELLBASELL INDUSTRIES 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 Segment - The primary products of this segment are ethylene, ethylene co-products (propylene, butadiene and benzene), polyethylene, polypropylene, and Catalloy process resins.
Table 3 - Olefins & Polyolefins - Americas Segment Financial Overview (a)
2Q 2010 (b) 2Q 2009 1Q 2010 First Six First Six
Months Months
Millions of dollars 2010 (c) 2009
Operating income (loss) $324 $69 $145 $469 $(32)
EBITDAR 414 207 274 688 227
EBITDAR excluding LCM
charge 585 N/A 274 859 N/A
--------------------- --- --- --- --- ---
(a) For all periods prior to May 1, 2010, operating income and EBITDAR figures in the table have been prepared on a current cost inventory basis. For periods beginning May 1, 2010, and thereafter, operating income and EBITDAR figures have been prepared using the LIFO method of inventory accounting. See Table 8.
(b) Represents the combined second quarter 2010 predecessor (April 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(c) Represents the combined predecessor (January 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods for the first six months of 2010. See Table 8.
2Q10 v. 1Q10 - Excluding a non-cash second-quarter 2010 Lower of Cost or Market (LCM) inventory charge of $171 million, underlying EBITDAR results improved by $311 million versus the first quarter 2010, as an average ethylene sales price decrease of approximately 5 cents per pound was more than offset by an approximately 9 cent per pound decline in the company's average cost-of-ethylene-production metric (COE). Ethylene sales volumes decreased by approximately 90 million pounds compared to the first quarter 2010, due in part to the scheduled maintenance turnaround at the Morris, Ill., facility. Segment polyethylene (PE) results improved by approximately $100 million versus the first quarter as PE benefitted from the lower ethylene price. Polypropylene (including Catalloy) results for the second quarter improved approximately $15 million. Total polyolefins sales volumes were nearly unchanged versus the first quarter 2010.
2Q10 v. 2Q09 - Excluding a non-cash second-quarter 2010 LCM inventory charge of $171 million, segment results improved significantly versus the second quarter 2009 as the average ethylene sales price increased approximately 18 cents per pound while the company's average cost-of-ethylene-production metric (COE) decreased approximately 2 cents per pound. Ethylene sales volumes increased by approximately 100 million pounds versus the second quarter 2009. Segment polyethylene results were relatively unchanged versus the second quarter 2009 as lower volumes due to the Morris, Ill., maintenance turnaround were offset by improved margins. Polypropylene (including Catalloy) results for the second quarter 2010 were also relatively unchanged versus second quarter 2009. Total polyolefins sales volumes decreased approximately 50 million pounds (3 percent) versus the second quarter 2009. Reduced polyethylene sales, partially related to the Morris, Ill., maintenance activity and optimization in favor of spot ethylene sales, accounted for the majority of the volume decrease.
Olefins & Polyolefins - Europe, Asia, International Segment - The primary products of this segment are ethylene, ethylene co-products (propylene, butadiene and benzene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and Polybutene-1 resins.
Table 4 - Olefins & Polyolefins - Europe, Asia, International Segment
Financial Overview (a)
2Q 2010 (b) 2Q 2009 1Q 2010 First Six First Six
Months Months
Millions of dollars 2010 (c) 2009
Operating income (loss) $158 $2 $71 $229 $(72)
EBITDAR 252 109 152 404 104
EBITDAR excluding LCM
charge 257 N/A 152 409 N/A
--------------------- --- --- --- --- ---
(a) For all periods prior to May 1, 2010, operating income and EBITDAR figures in the table have been prepared on a current cost inventory basis. For periods beginning May 1, 2010, and thereafter, operating income and EBITDAR figures have been prepared using the LIFO method of inventory accounting. See Table 8.
(b) Represents the combined second quarter 2010 predecessor (April 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(c) Represents the combined predecessor (January 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods for the first six months of 2010. See Table 8.
2Q10 v. 1Q10 - Excluding a non-cash second-quarter 2010 LCM inventory charge of $5 million, segment EBITDAR increased approximately $105 million versus the first quarter 2010. Higher prices for butadiene and increased volumes of polymers helped drive results. Higher margins for polypropylene and low density polyethylene in Europe also were key, contributing an approximate $45 million to the improved second-quarter results. Dividends also increased approximately $30 million with the majority originating in one of our Saudi Arabian joint ventures.
2Q10 v. 2Q09 - Excluding a non-cash second-quarter 2010 LCM inventory charge of $5 million, segment EBITDAR increased $148 million versus the second quarter 2009. Improved olefins and polyolefins margins accounted for the majority of the improved performance. Volume growth in polypropylene and polypropylene compounding, due in large part to increased demand from the automotive sector, accounted for the remainder of the improvement.
Intermediates & Derivatives Segment - The primary products of this segment are 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 flavors and fragrances chemicals.
Table 5 - Intermediates & Derivatives Segment Financial Overview (a)
2Q 2010 (b) 2Q 2009 1Q 2010 First Six First Six
Months Months
Millions of dollars 2010 (c) 2009
Operating income $143 $41 $123 $266 $119
EBITDAR 184 110 196 380 258
EBITDAR excluding LCM
charge 209 N/A 196 405 N/A
--------------------- --- --- --- --- ---
(a) For all periods prior to May 1, 2010, operating income and EBITDAR figures in the table have been prepared on a current cost inventory basis. For periods beginning May 1, 2010, and thereafter, operating income and EBITDAR figures have been prepared using the LIFO method of inventory accounting. See Table 8.
(b) Represents the combined second quarter 2010 predecessor (April 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(c) Represents the combined predecessor (January 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods for the first six months of 2010. See Table 8.
2Q10 v. 1Q10 - Excluding a non-cash second-quarter 2010 LCM inventory charge of $25 million, segment EBITDAR improved approximately $13 million versus the first quarter 2010. PO and PO derivatives results declined by approximately $15 million primarily due to reduced volumes sold to cover first-quarter competitor outages and seasonal deicer demand. Overall demand for PO and its derivatives, however, remains good. Intermediates results improved approximately $30 million versus the first quarter 2010. Expanded acetyls margins, a result of lower ethylene and natural gas prices, and increased acetyls volumes drove the improvement.
2Q10 v. 2Q09 - Segment results improved significantly versus the second quarter 2009. Excluding a non-cash second-quarter 2010 LCM inventory charge of $25 million, PO and PO derivatives improved by approximately $99 million due to higher sales volumes and lower fixed costs. Intermediates results improved by approximately $30 million primarily as a result of improved TBA Intermediates results.
Refining & Oxyfuels Segment - The primary products of this segment are gasoline, diesel, heating oil, jet fuel, petrochemical raw materials, methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE).
Table 6 - Refining & Oxyfuels Segment Financial Overview (a)
2Q 2010 (b) 2Q 2009 1Q 2010 First Six First Six
Months Months
Millions of dollars 2010 (c) 2009
Operating income (loss) $43 $(80) $(128) $(85) $(124)
EBITDAR 97 62 4 101 155
EBITDAR excluding LCM
charge 229 N/A 4 233 N/A
--------------------- --- --- --- --- ---
(a) For all periods prior to May 1, 2010, operating income and EBITDAR figures in the table have been prepared on a current cost inventory basis. For periods beginning May 1, 2010, and thereafter, operating income and EBITDAR figures have been prepared using the LIFO method of inventory accounting. See Table 8.
(b) Represents the combined second quarter 2010 predecessor (April 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(c) Represents the combined predecessor (January 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods for the first six months of 2010. See Table 8.
2Q10 v. 1Q10 - Excluding a non-cash second-quarter 2010 LCM inventory charge of $132 million, segment EBITDAR improved $225 million versus the first quarter 2010. Houston refinery performance improved by approximately $145 million. Crude volumes at the Houston refinery decreased approximately 74,000 barrels per day primarily as a result of the May 17 crude unit fire; however, it was possible to purchase intermediate streams to keep downstream units running closer to capacity during the crude unit outage. The direct cost impact of crude unit downtime was approximately $14 million, and lost opportunity costs are estimated to be approximately $60 million. The average industry benchmark margin increased approximately $4 per barrel during the quarter as gasoline and distillate spreads widened while our results outpaced this improvement. At the Berre refinery, industry benchmark margins increased by approximately $1 per barrel, while volumes increased with the completion of first-quarter maintenance at the facility. Oxyfuels results, following seasonal trends, improved in the second quarter 2010. Higher sales volumes and margins drove the improvement.
2Q10 v. 2Q09 - Excluding a non-cash second-quarter 2010 LCM inventory charge of $132 million, segment EBITDAR improved $167 million versus the second quarter 2009. At the Houston refinery, an increase in the industry benchmark margin of approximately $8 per barrel more than offset a crude volume decline of 42,000 barrels per day. Berre refinery results improved as a result of an increase in the industry benchmark margin of approximately $2 per barrel. Oxyfuels results declined from a very strong second quarter 2009 due to lower margins.
Technology Segment - The principal products of the Technology segment are polyolefin catalysts and production process technology licenses.
Table 7 - Technology Segment Financial Overview (a)
2Q 2010 (b) 2Q 2009 1Q 2010 First Six First Six
Months Months
Millions of dollars 2010 (c) 2009
Operating income $31 $67 $31 $62 $117
EBITDAR 43 101 47 90 167
EBITDAR excluding LCM
charge 43 N/A 47 90 N/A
--------------------- --- --- --- --- ---
(a) For all periods prior to May 1, 2010, operating income and EBITDAR figures in the table have been prepared on a current cost inventory basis. For periods beginning May 1, 2010, and thereafter, operating income and EBITDAR figures have been prepared using the LIFO method of inventory accounting. See Table 8.
(b) Represents the combined second quarter 2010 predecessor (April 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods. See Table 8.
(c) Represents the combined predecessor (January 1, 2010 - April 30, 2010) and successor (May 1, 2010 - June 30, 2010) periods for the first six months of 2010. See Table 8.
2Q10 v. 1Q10 - As in the first quarter, the majority of the EBITDAR generated during the second quarter was through the sale of catalysts.
2Q10 v. 2Q09 - Segment results declined versus the second quarter 2009 primarily due to reduced licensing and technology services income.
Liquidity
Company liquidity, defined as cash and cash equivalents plus funds available through established lines of credit (less appropriate reserves and letters of credit), was approximately $5.0 billion at June 30, 2010. The $5.0 billion of liquidity consisted of approximately $3.8 billion cash and $1.2 billion of undrawn funds available through the $1.75 billion asset-based loan facility.
Key "Fresh-Start" and Other Accounting Impacts
As a result of emergence from Chapter 11, LyondellBasell Industries N.V. has applied "fresh-start" accounting to the opening May 2010 consolidated financial statements as required under ASC 852, "Reorganizations." Under "fresh-start" accounting, LyondellBasell's consolidated assets and liabilities are revalued at their estimated fair values as of the emergence date (April 30, 2010) in a manner similar to purchase accounting and consistent with the Bankruptcy Court-approved total reorganized enterprise value of approximately $15.2 billion.
Listed below are key fair value adjustments applied to the opening balance sheet on May 1, 2010:
-- Property, Plant, and Equipment reduction of approximately $7.5 billion
-- Inventory increase of approximately $1.3 billion
-- Goodwill recognition of approximately $1.1 billion
Annual depreciation and amortization expenses will decline by approximately $1.0 billion as a result of the changes listed above.
Listed below are additional key items related to the reorganization of the company:
-- Debt decrease of approximately $18.3 billion
-- After-tax gain on settlement of pre-petition liabilities and
"fresh-start" accounting adjustments of approximately $8.6 billion
-- Cash interest expense reduction to approximately $170 million per
quarter
For a more complete listing of the "fresh-start" adjustments applied to the opening balance sheet, please see the LyondellBasell Industries N.V. Quarterly Financial Report for the period ending June 30, 2010 which will be posted on our website, www.lyondellbasell.com.
LCM Adjustment
Upon emergence from bankruptcy, LyondellBasell Industries N.V. adopted the Last-In, First-Out, or LIFO, inventory accounting methodology for U.S. GAAP purposes. In addition, as part of "fresh-start" accounting associated with our emergence from bankruptcy, inventories were written up by approximately $1.3 billion to their estimated fair market values as of April 30. At April 30, crude oil was selling for approximately $85 per barrel, and benchmark U.S. ethylene and propylene prices were approximately 55 and 75 cents per pound, respectively. By June 30, the end of the quarter, crude oil prices had fallen to approximately $75 per barrel, and U.S. ethylene and propylene benchmark prices had fallen to approximately 35 and 55 cents, respectively. In accordance with U.S. GAAP, it became necessary, due to the fall in the market value of the inventory, to make a non-cash Lower of Cost or Market (LCM) adjustment to the book value of the inventory. The LCM adjustment made in the second quarter 2010 was $333 million. This LCM adjustment is included in reported second-quarter 2010 and first six months 2010 net income, operating income and EBITDAR.
CONFERENCE CALL
LyondellBasell will host a conference call today, August 16, 2010, at 12:00 noon Eastern Time (ET). Participating on the call will be: Jim Gallogly, chief executive officer; Kent Potter, executive vice president and chief financial officer; and Doug Pike, vice president of Investor Relations. The toll-free dial-in number in the U.S. is 800-369-1176. 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 4465383.
A replay of the call will be available from 3:00 p.m. ET August 16 to 12:59 a.m. ET on September 17. The dial-in numbers are 800-934-9468 (U.S.) and +1 203-369-3394 (international). The pass code for each is 3692.
A copy of the slides that accompany the call will be available on our website at http://www.lyondellbasell.com/earnings.
ABOUT LYONDELLBASELL
LyondellBasell is one of the world's largest plastics, chemical and refining companies. The company manufactures products at 59 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 www.lyondellbasell.com.
FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the ability to comply with the terms of our credit facilities and other financing arrangements; the costs and availability of financing; the ability to maintain adequate liquidity; the ability to implement business strategies; availability, cost and price volatility of raw materials and utilities; supply/demand balances; industry production capacities and operating rates; uncertainties associated with the U.S. and worldwide economies; legal, tax and environmental proceedings; cyclical nature of the chemical and refining industries; operating interruptions; current and potential governmental regulatory actions; terrorist acts; international political unrest; competitive products and pricing; technological developments; risks of doing business outside of the United States; access to capital markets; and other risk factors. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in our financial reports, which are available at www.lyondellbasell.com/InvestorRelations.
(1) 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.
As a result of the company's emergence from Chapter 11 bankruptcy and the application of fresh-start accounting, the company is reporting its second quarter financial information for a predecessor period ending on April 30, 2010, the date of emergence, and a successor period after such date in accordance with GAAP. For purposes of this press release, we have presented "combined" results of operations for the second quarter and six months ended June 30, 2010. The combined results for the three months ended June 30, 2010 are the sum of (i) the predecessor period of April 1, 2010 through April 30, 2010 and (ii) the successor period of May 1, 2010 through June 30, 2010. For the six months ended June 30, 2010, the combined results are the sum of (i) the first quarter 2010 results of operations; (ii) the predecessor period of April 1, 2010 through April 30, 2010 and (ii) the successor period of May 1, 2010 through June 30, 2010. The results of operations on the combined basis are non-GAAP because they combine two separate reporting entities. We have included the combined financial information because we believe it gives investors a better understanding of the year-over-year and sequential quarter comparisons.
We also include certain other non-GAAP measures, such as EBITDAR and net debt. While we believe that EBITDAR is a measure commonly used by investors, EBITDAR, 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, EBITDAR means earnings before interest, taxes, depreciation, amortization and restructuring costs. EBITDAR should not be considered as an alternative to profit or operating profit for any period as an indicator of our performance, or as an alternative to operating cash flows as a measure of our liquidity. While we also believe that net debt is a measure commonly used by investors, net debt, 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, net debt means short-term debt plus current maturities of long-term debt plus long-term debt minus cash and cash equivalents.
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 EBITDAR 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 EBITDAR 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 EBITDAR, therefore use both current cost and LIFO methodologies.
Reconciliations of certain non-GAAP financial measures to their nearest comparable GAAP financial measures are provided in the financial tables at the end of this release.
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.
For information, contact:
Media - David Harpole (713) 309-4125
Investors - Doug Pike (713) 309-4590
Table 8 -LyondellBasell Industries - Reconciliation of Segment
Information to Consolidated Financial Information
Predecessor
-----------
2009
----
(Millions of dollars) Q1 Q2 Q3
--------------------- --- --- ---
Operating income (loss): (a)
Olefins & Polyolefins - Americas $(101) $69 $132
Olefins & Polyolefins -Europe, Asia,
International (74) 2 118
Intermediates & Derivatives 78 41 72
Refining & Oxyfuels (44) (80) (33)
Technology 50 67 31
Other (9) (28) 12
Current cost adjustment (41) 18 88
---
Total $(141) $89 $420
===== === ====
Depreciation and amortization:
Olefins & Polyolefins - Americas $121 $138 $135
Olefins & Polyolefins -Europe, Asia,
International 70 98 62
Intermediates & Derivatives 69 68 69
Refining & Oxyfuels 137 142 139
Technology 16 31 35
Other 3 2 3
--- --- ---
Total $416 $479 $443
==== ==== ====
EBITDAR: (a) (b)
Olefins & Polyolefins - Americas $20 $207 $272
Olefins & Polyolefins -Europe, Asia,
International (5) 109 186
Intermediates & Derivatives 148 110 143
Refining & Oxyfuels 93 62 107
Technology 66 101 66
Other 68 (52) 9
--- --- ---
Total EBITDAR 390 537 783
--- --- ---
LCM and other inventory valuation adjustments 55 34 20
---
Total excluding LCM and other inventory valuation
adjustments $445 $571 $803
==== ==== ====
Capital expenditures:
Olefins & Polyolefins - Americas $34 $29 $26
Olefins & Polyolefins -Europe, Asia,
International 117 104 54
Intermediates & Derivatives 4 3 3
Refining & Oxyfuels 31 30 33
Technology 10 6 10
Other 1 1 2
--- --- ---
Total $197 $173 $128
==== ==== ====
Predecessor
-----------
2009
----
(Millions of dollars) Q4 YTD
--------------------- --- ---
Operating income (loss): (a)
Olefins & Polyolefins - Americas $69 $169
Olefins & Polyolefins -Europe, Asia,
International (44) 2
Intermediates & Derivatives 59 250
Refining & Oxyfuels (200) (357)
Technology 62 210
Other 39 14
Current cost adjustment (36) 29
Total $(51) $317
==== ====
Depreciation and amortization:
Olefins & Polyolefins - Americas $120 $514
Olefins & Polyolefins -Europe, Asia,
International 86 316
Intermediates & Derivatives 70 276
Refining & Oxyfuels 139 557
Technology 18 100
Other 3 11
--- ---
Total $436 $1,774
==== ======
EBITDAR: (a) (b)
Olefins & Polyolefins - Americas $244 $743
Olefins & Polyolefins -Europe, Asia,
International 51 341
Intermediates & Derivatives 134 535
Refining & Oxyfuels (7) 255
Technology 76 309
Other 28 53
--- ---
Total EBITDAR 526 2,236
--- -----
LCM and other inventory valuation adjustments 18 127
Total excluding LCM and other inventory valuation
adjustments $544 $2,363
==== ======
Capital expenditures:
Olefins & Polyolefins - Americas $53 $142
Olefins & Polyolefins -Europe, Asia,
International 136 411
Intermediates & Derivatives 11 21
Refining & Oxyfuels 73 167
Technology 6 32
Other 2 6
--- ---
Total $281 $779
==== ====
(a) For periods prior to May 1, 2010, Predecessor segment operating
income and EBITDAR were determined on a current cost basis. For
periods following May 1, 2010, Successor operating income and
EBITDAR were determined using the LIFO method of inventory
accounting.
(b) See Table 9 for a reconciliation of total EBITDAR excluding LCM
and other inventory valuation adjustments to net income.
Table 8 -LyondellBasell Industries - Reconciliation of Segment
Information to Consolidated Financial Information
Predecessor
-----------
April 1
-
April
(Millions of dollars) Q1 30
--------------------- --- ------
Operating income (loss): (a)
Olefins & Polyolefins - Americas $145 $175
Olefins & Polyolefins -Europe, Asia,
International 71 44
Intermediates & Derivatives 123 34
Refining & Oxyfuels (128) 29
Technology 31 8
Other (59) 18
Current cost adjustment 184 15
--- ---
Total $367 $323
==== ====
Depreciation and amortization:
Olefins & Polyolefins - Americas $119 $41
Olefins & Polyolefins -Europe, Asia,
International 81 26
Intermediates & Derivatives 69 22
Refining & Oxyfuels 135 45
Technology 17 6
Other 3 1
--- ---
Total $424 $141
==== ====
EBITDAR: (a) (b)
Olefins & Polyolefins - Americas $274 $216
Olefins & Polyolefins -Europe, Asia,
International 152 78
Intermediates & Derivatives 196 56
Refining & Oxyfuels 3 76
Technology 47 14
Other (32) 8
--- ---
Total EBITDAR 640 448
--- ---
LCM adjustment - -
--- ---
Total excluding LCM adjustment $640 $448
==== ====
Capital expenditures:
Olefins & Polyolefins - Americas $30 $22
Olefins & Polyolefins -Europe, Asia,
International 59 43
Intermediates & Derivatives 4 4
Refining & Oxyfuels 35 14
Technology 10 2
Other 1 2
--- ---
Total $139 $87
==== ===
Successor Combined
--------- --------
2010
----
May 1 -
(Millions of dollars) June 30 Q2
--------------------- ------- ---
Operating income (loss): (a)
Olefins & Polyolefins - Americas $149 $324
Olefins & Polyolefins -Europe, Asia,
International 114 158
Intermediates & Derivatives 109 143
Refining & Oxyfuels 14 43
Technology 23 31
Other 13 31
Current cost adjustment - 15
--- ---
Total $422 $745
==== ====
Depreciation and amortization:
Olefins & Polyolefins - Americas $51 $92
Olefins & Polyolefins -Europe, Asia,
International 33 59
Intermediates & Derivatives 23 45
Refining & Oxyfuels 9 54
Technology 6 12
Other 7 8
--- ---
Total $129 $270
==== ====
EBITDAR: (a) (b)
Olefins & Polyolefins - Americas $198 $414
Olefins & Polyolefins -Europe, Asia,
International 174 252
Intermediates & Derivatives 128 184
Refining & Oxyfuels 21 97
Technology 29 43
Other 72 80
--- ---
Total EBITDAR 622 1,070
--- -----
LCM adjustment 333 333
--- ---
Total excluding LCM adjustment $955 $1,403
==== ======
Capital expenditures:
Olefins & Polyolefins - Americas $50 $72
Olefins & Polyolefins -Europe, Asia,
International 31 74
Intermediates & Derivatives 5 9
Refining & Oxyfuels 22 36
Technology 3 5
Other 2 4
--- ---
Total $113 $200
==== ====
Predecessor Successor
----------- ---------
January 1
- May 1 -
(Millions of dollars) April 30 June 30
--------------------- -------- -------
Operating income (loss): (a)
Olefins & Polyolefins - Americas $320 $149
Olefins & Polyolefins -Europe, Asia,
International 115 114
Intermediates & Derivatives 157 109
Refining & Oxyfuels (99) 14
Technology 39 23
Other (41) 13
Current cost adjustment 199 -
--- ---
Total $690 $422
==== ====
Depreciation and amortization:
Olefins & Polyolefins - Americas $160 $51
Olefins & Polyolefins -Europe, Asia,
International 107 33
Intermediates & Derivatives 91 23
Refining & Oxyfuels 180 9
Technology 23 6
Other 4 7
--- ---
Total $565 $129
==== ====
EBITDAR: (a) (b)
Olefins & Polyolefins - Americas $490 $198
Olefins & Polyolefins -Europe, Asia,
International 230 174
Intermediates & Derivatives 252 128
Refining & Oxyfuels 79 21
Technology 61 29
Other (24) 72
--- ---
Total EBITDAR 1,088 622
----- ---
LCM adjustment - 333
--- ---
Total excluding LCM adjustment $1,088 $955
====== ====
Capital expenditures:
Olefins & Polyolefins - Americas $52 $50
Olefins & Polyolefins -Europe, Asia,
International 102 31
Intermediates & Derivatives 8 5
Refining & Oxyfuels 49 22
Technology 12 3
Other 3 2
--- ---
Total $226 $113
==== ====
Combined
--------
(Millions of dollars) YTD
--------------------- ---
Operating income (loss): (a)
Olefins & Polyolefins - Americas $469
Olefins & Polyolefins -Europe, Asia,
International 229
Intermediates & Derivatives 266
Refining & Oxyfuels (85)
Technology 62
Other (28)
Current cost adjustment 199
---
Total $1,112
======
Depreciation and amortization:
Olefins & Polyolefins - Americas $211
Olefins & Polyolefins -Europe, Asia,
International 140
Intermediates & Derivatives 114
Refining & Oxyfuels 189
Technology 29
Other 11
---
Total $694
====
EBITDAR: (a) (b)
Olefins & Polyolefins - Americas $688
Olefins & Polyolefins -Europe, Asia,
International 404
Intermediates & Derivatives 380
Refining & Oxyfuels 100
Technology 90
Other 48
---
Total EBITDAR 1,710
-----
LCM adjustment 333
---
Total excluding LCM adjustment $2,043
======
Capital expenditures:
Olefins & Polyolefins - Americas $102
Olefins & Polyolefins -Europe, Asia,
International 133
Intermediates & Derivatives 13
Refining & Oxyfuels 71
Technology 15
Other 5
---
Total $339
====
(a) For periods prior to May 1, 2010, Predecessor segment operating
income and EBITDAR were determined on a current cost basis. For
periods following May 1, 2010, Successor operating income and
EBITDAR were determined using the LIFO method of inventory
accounting.
(b) See Table 9 for a reconciliation of total EBITDAR excluding LCM
and other inventory valuation adjustments to net income.
Table 9 - LyondellBasell Industries - Reconciliation of EBITDAR to
Net Income
Predecessor
-----------
2009
----
(Millions of dollars) Q1 Q2 Q3
--------------------- --- --- ---
Total EBITDAR excluding LCM and
other inventory valuation
adjustments $445 $571 $803
Deduct:
LCM and other inventory
valuation adjustments (55) (34) (20)
--- --- ---
Total EBITDAR (a) 390 537 783
Add:
Income (loss) from equity
investment (20) 22 (168)
Unrealized foreign exchange
(loss) gain 15 98 141
Income (loss) from discontinued
operations (4) 2 (1)
Deduct:
Depreciation and amortization (416) (479) (443)
Impairment charge - (5) -
Reorganization items (948) (124) (928)
Interest expense, net (425) (498) (441)
Joint venture dividends received (2) (7) (12)
Benefit from income taxes 432 87 332
Loss attributable to non-
controlling interest (1) (2) (1)
Current cost adjustment to
inventory (41) 18 88
Other 3 (2) (1)
LyondellBasell Industries net
loss $(1,017) $(353) $(651)
======= ===== =====
Predecessor
-----------
2009
----
(Millions of dollars) Q4 YTD
--------------------- --- ---
Total EBITDAR excluding LCM and
other inventory valuation
adjustments $544 $2,363
Deduct:
LCM and other inventory
valuation adjustments (18) (127)
--- ----
Total EBITDAR (a) 526 2,236
Add:
Income (loss) from equity
investment (15) (181)
Unrealized foreign exchange
(loss) gain (61) 193
Income (loss) from discontinued
operations 4 1
Deduct:
Depreciation and amortization (436) (1,774)
Impairment charge (12) (17)
Reorganization items (961) (2,961)
Interest expense, net (413) (1,777)
Joint venture dividends received (5) (26)
Benefit from income taxes 560 1,411
Loss attributable to non-
controlling interest (2) (6)
Current cost adjustment to
inventory (36) 29
Other 1 1
LyondellBasell Industries net
loss $(850) $(2,871)
===== =======
(a) See Table 8 for components of total EBITDAR
Table 9 - LyondellBasell Industries - Reconciliation of EBITDAR to
Net Income
Predecessor Successor Combined
----------- --------- --------
2010
----
April
1 - May 1 -
April
(Millions of dollars) Q1 30 June 30 Q2
--------------------- --- ------ ------- ---
LYONDELLBASELL
Total EBITDAR excluding LCM
adjustment $640 $448 $955 $1,403
Deduct:
LCM adjustment - - 333 333
Total EBITDAR (a) 640 448 622 1,070
--- --- --- -----
Add:
Income from equity investment 55 29 27 56
Unrealized foreign exchange loss (202) (62) (14) (76)
Loss from discontinued operations - (2) (1) (3)
Deduct:
Depreciation and amortization (424) (141) (129) (270)
Impairment charge (3) (6) - (6)
Reorganization items 207 7,803 (8) 7,795
Interest expense, net (409) (299) (120) (419)
Joint venture dividends received (13) (5) (28) (33)
(Provision for) benefit from income
taxes (12) 705 (28) 677
Income (loss) on non-controlling
interest (2) - 5 5
Fair value change in warrants - - 17 17
Current cost adjustment to inventory 184 15 - 15
Other (13) 11 4 15
LyondellBasell Industries net income $8 $8,496 $347 $8,843
=== ====== ==== ======
Predecessor Successor Combined
----------- --------- --------
January 1 - May 1 -
(Millions of dollars) April 30 June 30 YTD
--------------------- -------- ------- ---
LYONDELLBASELL
Total EBITDAR excluding LCM
adjustment $1,088 $955 $2,043
Deduct:
LCM adjustment - 333 333
Total EBITDAR (a) 1,088 622 1,710
----- --- -----
Add: - - -
Income from equity investment 84 27 111
Unrealized foreign exchange
loss (264) (14) (278)
Loss from discontinued
operations (2) (1) (3)
Deduct:
Depreciation and amortization (565) (129) (694)
Impairment charge (9) - (9)
Reorganization items 8,010 For more iinformation, go to www.prnewswire.com
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23rd, 2011
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