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Press release from PR Newswire

LyondellBasell Reports Third-Quarter 2010 Results

Friday, October 29, 2010

LyondellBasell Reports Third-Quarter 2010 Results06:00 EDT Friday, October 29, 2010ROTTERDAM, Netherlands, Oct. 29 /PRNewswire-FirstCall/ --Highlights Net income of $467 million; Earnings per share of $0.84 Third quarter EBITDA of $1,230 million, excluding $32 million non-cash Lower of Cost or Market (LCM) inventory charge; Year-to-Date EBITDA(R) of $3,273 million excluding non-cash LCM charges of $365 million(1) Sales of $10,302 million, up 20% from the prior year New York Stock Exchange listing completed; ticker symbols LYB and LYB.B Solid operating performance with results near second quarter levels; combined global Olefins and Polyolefins results approximate second-quarter 2010 resultsLyondellBasell Industries (NYSE: LYB) today announced net income for the third quarter 2010 of $467 million, or $0.84 per share. Third quarter 2010 EBITDA was $1,230 million, excluding a $32 million non-cash LCM inventory charge.(1)  Quarterly sales were $10,302 million.  Comparisons with the prior quarter, third quarter 2009 and first nine months of 2009 are available in the following table.Table 1 - Earnings Summary (a)Three months endedNine months ended Sept. 30Millions of U.S. dollars (except where noted)Sept. 30, 2010June 30, 2010 (b)Sept. 30, 20092010 (c)2009Sales and other operating revenues$10,302$10,484$8,612$30,541$22,011Net income (loss) (d) 4678,843(651)9,318(2,021)Earnings per diluted share (U.S. dollars)0.84N/AN/AN/AN/ADiluted share count (millions)565N/AN/AN/AN/AEBITDA(R) (e)1,1981,0707832,9081,710EBITDA(R) excluding LCM and other inventory valuation adjustments1,2301,4038033,2731,819(a) For all periods prior to May 1, 2010, EBITDAR 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) 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.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(c) Results for the first nine months of 2010 represent the combined predecessor (Jan. 1, 2010 - April 30, 2010) and successor (May 1, 2010 ? Sept. 30, 2010) periods.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(d) Includes net income (loss) attributable to non-controlling interests.  See Table 11.(e) See Table 9 for reconciliations of EBITDAR and EBITDA to net income.Table 2 ? Charges (Benefits) Included in Net IncomeThree months endedNine months ended Sept. 30Millions of dollars Sept. 30, 2010June 30, 2010Sept. 30, 200920102009Pretax charges (benefits):Charge/(benefit) ? Reorganization items$13$169$928$(28)$2,000Gain 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 adjustments3233320365109Unplanned maintenance at the Houston refinery-14-14-Warrants ? mark to market76(17)-59-Change related to dispute over environmental indemnity64--64-Provision for income tax related to these items(13)(498)(332)(440)(738)After-tax effect of net charges (credits)  172(7,960)616(7,927)1,371Effect on earnings per share$0.30NANANANA"We achieved excellent results in the third quarter as most of our segments performed very well," said LyondellBasell Chief Executive Officer Jim Gallogly.  "Globally, our Olefins & Polyolefins results were approximately equal to the strong results of the second quarter.  As a result, we again generated significant cash during the quarter and further improved our liquidity.  In early October, we completed our listing on the New York Stock Exchange, another milestone in the creation of the new LyondellBasell."  OUTLOOKCommenting on the near-term outlook, Gallogly said, "Industry conditions have held up reasonably well during October.  However, we expect to see the typical seasonal impacts in the Refining and Oxyfuels area as well as end-of-year holiday reduced sales to some customers.  With these anticipated impacts, our outlook for the quarter is somewhat tempered compared to the strong second and third quarters." 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, ethylene co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins.  Table 3 ? O&P-Americas Financial Overview (a)Three months endedNine months ended Sept. 30Millions of dollars Sept. 30, 2010June 30, 2010 (b)Sept. 30, 20092010 (c)2009Operating income $448$324$132$917$100EBITDA(R)4924142721,180499EBITDA(R) excluding LCM charges518585N/A1,377N/A(a)  For all periods prior to May 1, 2010, operating income and EBITDAR 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.  (b)  Represents the combined second quarter 2010 predecessor (April 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? June 30, 2010) periods.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(c)  Represents the combined predecessor (Jan. 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? Sept. 30, 2010) periods for the first nine months of 2010.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.Three months ended Sept. 30, 2010 versus three months ended June 30, 2010 ? Excluding non-cash LCM inventory charges of $171 million and $26 million in the second quarter and third quarters 2010, respectively, underlying EBITDA declined by $67 million versus the second quarter 2010, as an average ethylene sales price decrease of approximately 10 cents per pound was partially offset by an approximately 2 cent per pound decline in the company's average cost-of-ethylene-production metric (COE).  Ethylene sales volume increased by approximately 130 million pounds compared to the second quarter 2010, as the scheduled maintenance turnaround at the Morris, Ill. facility was completed during the second quarter.  Polyethylene (PE) results improved by approximately $75 million versus second quarter 2010 as PE benefitted from the lower ethylene price and additional production at Morris.  Polypropylene results for the third quarter improved approximately $10 million.  Total polyolefins sales volumes increased approximately 275 million pounds (14 percent) versus the second quarter with polyethylene sales accounting for the majority of the increase.Three months ended Sept. 30, 2010 versus three months ended Sept. 30, 2009 ? Excluding a non-cash third-quarter 2010 LCM inventory charge of $26 million, O&P ? Americas results improved significantly versus the third quarter 2009 as the average ethylene sales price increased approximately 7 cents per pound while the company's COE remained relatively unchanged.  Segment polyethylene results improved by approximately $10 million compared to third quarter 2009 based on an improved sales mix favoring domestic sales.  Polypropylene results for the third quarter 2010 increased approximately $15 million versus third quarter 2009.  Total polyolefins sales volumes increased approximately 100 million pounds (4 percent) versus the third quarter 2009.  Increased polypropylene sales accounted for the majority of the sales volume increase.Olefins & Polyolefins ? Europe, Asia, International (O&P-EAI) ? The primary products of this segment include ethylene, ethylene 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 endedNine months ended Sept. 30Millions of dollars Sept. 30, 2010June 30, 2010 (b)Sept. 30, 20092010 (c)2009Operating income $231$158$118$460$46EBITDA(R)289252186693290EBITDA(R) excluding LCM charges294257N/A703N/A(a)  For all periods prior to May 1, 2010, operating income and EBITDAR 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.(b)  Represents the combined second quarter 2010 predecessor (April 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? June 30, 2010) periods.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(c)  Represents the combined predecessor (Jan. 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? Sept. 30, 2010) periods for the first nine months of 2010.  The predecessor and successor periods are not necessarily comparable in all respects.   See Table 8 and endnote (1) of this release.Three months ended Sept. 30, 2010 versus three months ended June 30, 2010 ? Excluding non-cash LCM inventory charges of $5 million in each of the second and third quarters, EBITDA increased by $37 million versus the second quarter 2010.  Higher olefins margins due to tight market conditions, caused in part by competitor outages and increased sales volumes due to the completion of the Berre olefins and polyolefins plant maintenance turnarounds during the second quarter, drove results higher.  Higher polyolefins sales volumes of approximately 190 million pounds also contributed to the improved third-quarter results.  Dividends received from joint ventures decreased by approximately $30 million as compared to the second quarter 2010.Three months ended Sept. 30, 2010 versus three months ended Sept. 30, 2009 ? Excluding a non-cash LCM inventory charge of $5 million in the third quarter 2010, EBITDA increased $108 million versus the third 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, 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, 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 ? I&D Financial Overview (a)Three months endedNine months ended Sept. 30Millions of dollars Sept. 30, 2010June 30, 2010 (b)Sept. 30, 20092010 (c)2009Operating income $207$143$72$473$191EBITDA(R)243184143623401EBITDA(R) excluding LCM charges243209N/A648N/A(a)  For all periods prior to May 1, 2010, operating income and EBITDAR 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. (b)  Represents the combined second quarter 2010 predecessor (April 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? June 30, 2010) periods.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(c)  Represents the combined predecessor (Jan. 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? Sept. 30, 2010) periods for the first nine months of 2010.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.Three months ended Sept. 30, 2010 versus three months ended June 30, 2010 ? Excluding a non-cash LCM inventory charge of $25 million in the second quarter 2010, EBITDA improved by $34 million versus the second quarter 2010.  PO and PO derivatives results improved by approximately $50 million due to increased volumes and the benefit of price increases implemented in the second quarter that were realized in the third quarter.  Intermediates results declined versus the second quarter 2010 due in part to operating problems within the ethylene oxide business, which have since been resolved.Three months ended Sept. 30, 2010 versus three months ended Sept. 30, 2009 ? I&D results improved significantly in the third quarter 2010 compared to the third quarter 2009.  PO and PO derivatives results improved by approximately $120 million due to higher sales volumes of PO derivatives and improved margins of most products.  Intermediates results declined by approximately $15 million versus third quarter 2009 as a result of the ethylene oxide operating problems and lower styrene results.  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 endedNine months ended Sept. 30Millions of dollars Sept. 30, 2010June 30, 2010 (b)Sept. 30, 20092010 (c)2009Operating income (loss)$83$43$(33)$(2)$(157)EBITDA(R)14097107240262EBITDA(R) excluding LCM charges141229N/A373N/A(a)  For all periods prior to May 1, 2010, operating income and EBITDAR 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.  (b)  Represents the combined second quarter 2010 predecessor (April 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? June 30, 2010) periods.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(c)  Represents the combined predecessor (Jan. 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? Sept. 30, 2010) periods for the first nine months of 2010.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.Three months ended Sept. 30, 2010 versus three months ended June 30, 2010 ? Excluding non-cash LCM inventory charges of $132 million and $1 million in the second-quarter and third-quarter 2010, respectively, EBITDA declined $88 million in the third quarter versus the second quarter 2010.  Houston refinery performance declined by approximately $50 million.  Crude volumes at the Houston refinery increased approximately 72,000 barrels per day compared to the second-quarter volumes which were low as a result of the May 17 crude unit fire.  However, the average industry benchmark margin decreased approximately $4 per barrel during the quarter as gasoline and distillate spreads and the heavy crude differential all contracted.  At the Berre refinery, industry benchmark margins decreased by approximately $1 per barrel, while volumes remained relatively unchanged.  Oxyfuels results were relatively unchanged. Three months ended Sept. 30, 2010 versus three months ended Sept. 30, 2009 ? Excluding a non-cash 2010 LCM inventory charge of $1 million in the third quarter 2010, segment EBITDA improved $34 million versus the third quarter 2009.  At the Houston refinery, an increase in the industry benchmark margin of approximately $5 per barrel was the primary contributor to the improved results.  Berre refinery results were relatively unchanged.  Oxyfuels results declined from a very strong third quarter 2009 due to lower margins. 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 endedNine months ended Sept. 30Millions of dollars Sept. 30, 2010June 30, 2010 (b)Sept. 30, 20092010 (c)2009Operating income $38$31$31$100$148EBITDA(R)784366168233EBITDA(R) excluding LCM charges7843N/A168N/A(a)  For all periods prior to May 1, 2010, operating income and EBITDAR 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. (b)  Represents the combined second quarter 2010 predecessor (April 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? June 30, 2010) periods.  The predecessor and successor periods are not necessarily comparable in all respects.  See Table 8 and endnote (1) of this release.(c)  Represents the combined predecessor (Jan. 1, 2010 ? April 30, 2010) and successor (May 1, 2010 ? Sept. 30, 2010) periods for the first nine months of 2010.  The predecessor and successor periods are not necessarily comparable in all respects.    See Table 8 and endnote (1) of this release.Three months ended Sept. 30, 2010 versus three months ended June 30, 2010 ? Results increased due to licensing and technology services improvement.Three months ended Sept. 30, 2010 versus three months ended Sept. 30, 2009 ? Results increased due to licensing and technology services improvement.LiquidityCompany liquidity, which we define as cash and cash equivalents plus funds available through established lines of credit (less appropriate reserves and letters of credit), was approximately $6.1 billion at Sept. 30, 2010.  The $6.1 billion of liquidity consisted of approximately $4.8 billion cash and approximately $1.2 billion of undrawn funds available through the $1.75 billion asset-based loan facility.Capital SpendingCapital expenditures including maintenance turnaround and information technology related expenditures were $161 million during third quarter 2010, and $578 million for the first nine months of 2010.CONFERENCE CALLLyondellBasell will host a conference call today, Oct. 29, 2010, at 11:00 a.m. Eastern Time (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 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 5300668. A replay of the call will be available from 2:00 p.m. ET Oct. 29 to 08:00 a.m. ET on Nov. 29. The dial-in numbers are 866-510-4832 (U.S.) and +1 203-369-1941 (international). The pass code for each is 6352. A copy of the slides that accompany the call will be available on our website at http://www.lyondellbasell.com/earnings.ABOUT LYONDELLBASELLLyondellBasell (NYSE: LYB) 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 registration statements filed with the Securities and Exchange Commission, which are available at www.lyondellbasell.com/InvestorRelations.(1) NON-GAAP MEASURESThis 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 reported its second quarter financial information for a predecessor period ending on April 30, 2010, the date of emergence from bankruptcy, 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 2010 and for the nine months ended Sept. 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 nine months ended Sept. 30, 2010, the combined results are the sum of (i) the first four months of 2010, representing the predecessor and (ii) the five months ended September 30, 2010, representing the successor period.  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.   The primary impacts of both the Company's reorganization under Chapter 11 and the application of fresh-start accounting include (i) an increase in the value of inventory at April 30, 2010 required as a result of our emergence from Chapter 11 and the application of fresh-start accounting and a significant decrease from those values at June 30, 2010, as the market values of crude oil significantly decreased between those dates; (ii) lower depreciation and amortization expense in periods after April 30, 2010 as a result of the revaluation of assets in connection with fresh-start accounting; and (iii) lower interest expense in periods after April 30, 2010 as a result of the discharge of $9 billion of debt and the conversion of $9 billion of debt into equity as a result of the reorganization pursuant to Chapter 11.  The significant decrease in inventory values at June 30, 2010 was a result of the application of U.S. GAAP; however, the amount of the decrease was exacerbated by the previous significant increase in values at April 30, 2010, when market values of crude oil had risen to annual highs.  Inventory charges since the second quarter are required by U.S. GAAP and a result of changes in market values of crude oil.We also include certain other non-GAAP measures, such as EBITDAR and EBITDA.  While we believe that EBITDAR and EBITDA are measures commonly used by investors, EBITDAR and 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, EBITDAR means earnings before interest, taxes, depreciation, amortization and restructuring costs, as adjusted for certain unusual and non-recurring items such as impairment charges, reorganization items, the effect of mark-to-market accounting on our warrants and current cost inventory adjustments.  EBITDA means earnings before interest, taxes, depreciation and amortization, as adjusted for the same items, to the extent applicable in the successor periods.  EBITDAR and EBITDA both also include dividends from joint ventures.  EBITDAR and EBITDA should not be considered as alternatives 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.  Additionally, this release contains EBITDA(R), which represents a combined predecessor and successor periods when the predecessor period is adjusted for restructuring costs, therefore representing EBITDAR, and the successor period is not adjusted, because there were no restructuring costs, or any such costs are included in net income.  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.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 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 EBITDAR and 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) 309-4125Investor Contact:  Doug Pike (713) 309-4590Table 8 - LyondellBasell Industries ? Reconciliation of Segment Information to Consolidated Financial InformationPredecessor2009(Millions of dollars)Q1Q2Q3Q4YTDSales and other operating revenues: (a)Olefins and Polyolefins - Americas$ 1,578$ 2,037$ 2,404$ 2,595$   8,614Olefins and Polyolefins - Europe, Asia, International1,7192,1702,6512,8619,401Intermediates and Derivatives7618101,0511,1563,778Refining and Oxyfuels2,2653,1673,5063,14012,078Technology116150135142543Other/elims(539)(835)(1,135)(1,077)(3,586)Total$ 5,900$ 7,499$ 8,612$ 8,817$ 30,828Operating income (loss): (a)Olefins and Polyolefins - Americas$  (101)$      69$    132$      69$      169Olefins and Polyolefins - Europe, Asia, International(74)2118(44)2Intermediates and Derivatives78417259250Refining and Oxyfuels(44)(80)(33)(200)(357)Technology50673162210Other(9)(28)123914Current cost adjustment(41)1888(36)29Total$  (141)$      89$    420$    (51)$      317Depreciation and amortization:Olefins and Polyolefins - Americas$    121$    138$    135$    120$      514Olefins and Polyolefins - Europe, Asia, International70986286316Intermediates and Derivatives69686970276Refining and Oxyfuels137142139139557Technology16313518100Other323311Total$    416$    479$    443$    436$   1,774EBITDA(R): (a) (b)Olefins and Polyolefins - Americas$      20$    207$    272$    244$      743Olefins and Polyolefins - Europe, Asia, International(5)10918651341Intermediates and Derivatives148110143134535Refining and Oxyfuels9362107(7)255Technology661016676309Other68(52)92853Total EBITDAR3905377835262,236LCM and other inventory valuation adjustments55342018127Total excluding LCM and other inventory valuation adjustments$    445$    571$    803$    544$   2,363Capital, turnarounds and IT deferred spending:Olefins and Polyolefins - Americas$      39$      31$      31$      68$      169Olefins and Polyolefins - Europe, Asia, International11710454133408Intermediates and Derivatives5592443Refining and Oxyfuels44353878195Technology10610632Other23218Total217184144310855Deferred charges included above(20)(11)(16)(29)(76)Capital expenditures(c)$    197$    173$    128$    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 EBITDA 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.   (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 8 - LyondellBasell Industries ? Reconciliation of Segment Information to Consolidated Financial InformationPredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010April 1 -May 1 -Jan. 1 -May 1 -(Millions of dollars)Q1April 30June 30Q2Q3April 30Sept. 30YTDSales and other operating revenues: (a)Olefins and Polyolefins - Americas$ 3,020$ 1,163$          2,004$         3,167$   3,247$              4,183$             5,251$         9,434Olefins and Polyolefins - Europe, Asia, International3,1191,0662,1403,2063,2474,1055,3879,492Intermediates and Derivatives1,3165049401,4441,4531,8202,3934,213Refining and Oxyfuels3,4151,3332,4033,7363,8674,7486,27011,018Technology1103575110157145232377Other/elims(1,225)(389)(790)(1,179)(1,669)(1,534)(2,459)(3,993)Total$ 9,755$ 3,712$          6,772$       10,484$ 10,302$            13,467$           17,074$       30,541Operating income (loss): (a)Olefins and Polyolefins - Americas$    145$    175$             149$            324$      448$                 320$                597$            917Olefins and Polyolefins - Europe, Asia, International7144114158231115345460Intermediates and Derivatives12334109143207157316473Refining and Oxyfuels(128)29144383(99)97(2)Technology3182331383961100Other(59)181331(19)(41)(6)(47)Current cost adjustment18415-15-199-199Total$    367$    323$             422$            745$         988$                 690$             1,410$         2,100Depreciation and amortization:Olefins and Polyolefins - Americas$    119$      41$               51$              92$        42$                 160$                  93$            253Olefins and Polyolefins - Europe, Asia, International812633596010793200Intermediates and Derivatives69222345309153144Refining and Oxyfuels135459545518064244Technology17661240234669Other3178(5)426Total$    424$    141$             129$            270$      222$                 565$                351$            916EBITDA(R): (a) (b)Olefins and Polyolefins - Americas$    274$    216$             198$            414$      492$                 490$                690$         1,180Olefins and Polyolefins - Europe, Asia, International15278174252289230463693Intermediates and Derivatives19656128184243252371623Refining and Oxyfuels376219714079161240Technology471429437861107168Other(32)87280(44)(24)284Total EBITDA(R)6404486221,0701,1981,0881,8202,908LCM and other inventory valuation adjustments--33333332-365365Total excluding LCM and other inventory valuation adjustments$      640$    448$      955$      1,403$      1,230$      1,088$      2,185$      3,273Capital, turnarounds and IT deferred spending:Olefins and Polyolefins - Americas$      69$      20$               50$              70$        40$                   89$                  90$            179Olefins and Polyolefins - Europe, Asia, International594331743210263165Intermediates and Derivatives7551039124456Refining and Oxyfuels64152237347956135Technology102357121022Other4358971421Total21388116204161301277578Deferred charges included above(74)(1)(3)(4)(8)(75)(11)(86)Capital expenditures(c)$    139$      87$             113$            200$      153$                 226$                266$            492(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 EBITDA 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.   (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 ? LyondellBasell Industries ? Reconciliation of EBITDAR to Net IncomePredecessor2009 (Millions of dollars)Q1Q2Q3Q4YTDSegment EBITDAR:Olefins and Polyolefins - Americas$       20$  207$  272$  244$     743Olefins and Polyolefins - Europe, Asia, International(5)10918651341Intermediates and Derivatives148110143134535Refining and Oxyfuels9362107(7)255Technology661016676309Other68(52)92853Total EBITDAR 3905377835262,236LCM and other inventory valuation adjustments55342018127Total EBITDAR excluding LCM and other inventory valuation adjustments4455718035442,363Add:Income (loss) from equity investment(20)22(168)(15)(181)Unrealized foreign exchange (loss) gain1598141(61)193Deduct:LCM and other inventory valuation adjustments(55)(34)(20)(18)(127)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 taxes432873325601,411Fair value change in warrants-----Current cost adjustment to inventory(41)1888(36)29Other(2)(2)(3)3(4)Net loss(1,017)(353)(651)(850)(2,871)Less: Net loss attributable to non-controlling interests12126Net loss attributable to the Company$ (1,016)$ (351)$ (650)$ (848)$ (2,865)Table 9 ? LyondellBasell Industries ? Reconciliation of EBITDAR to Net IncomePredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010April 1 -May 1 -Jan. 1 -May 1 -(Millions of dollars)Q1April 30June 30Q2Q3April 30Sept. 30YTDSegment EBITDA(R):Olefins and Polyolefins - Americas$ 274$    216$             198$            414$  492$                 490$                690$         1,180Olefins and Polyolefins - Europe, Asia, International15278174252289230463693Intermediates and Derivatives19656128184243252371623Refining and Oxyfuels376219714079161240Technology471429437861107168Other(32)87280(44)(24)284Total EBITDA(R) (a)6404486221,0701,1981,0881,8202,908LCM and other inventory valuation adjustments--33333332-365365Total EBITDA(R) excluding LCM and other inventory valuation adjustments6404489551,4031,2301,0882,1853,273Add:Income from equity investment55292756298456140Unrealized foreign exchange loss(202)(62)(14)(76)(7)(264)(21)(285)Deduct:LCM and other inventory valuation adjustments--(333)(333)(32)-(365)(365)Depreciation and amortization(424)(141)(129)(270)(222)(565)(351)(916)Impairment charge(3)(6)-(6)-(9)-(9)Reorganization items2077,803(8)7,795(13)8,010(21)7,989Interest expense, net(409)(299)(120)(419)(186)(708)(306)(1,014)Joint venture dividends received(13)(5)(28)(33)-(18)(28)(46)(Provision for) benefit from income taxes(12)705(28)677(254)693(282)411Fair value change in warrants--1717(76)-(59)(59)Current cost adjustment to inventory18415-15-199-199Other(15)9817(2)(6)6-Net income 88,4963478,8434678,5048149,318Less: Net (income) loss attributable to non-controlling interests258(5)53760262Net income attributable to the Company$   10$ 8,554$             342$         8,896$  474$              8,564$                816$         9,380Table 10 ? LyondellBasell Industries ? Selected Segment Operating Information 2009Q1Q2Q3Q4YTDOlefins and Polyolefins - AmericasVolumes  (million pounds)Ethylene produced1,9882,0942,0372,0108,129Propylene produced6767317997062,912Polyethylene sold1,2361,3421,5051,4165,499Polypropylene sold5416566066132,416Market PricesWest Texas Intermediate crude oil (USD per barrel)43.3159.7968.2476.1362.09Natural gas (USD per million BTUs)4.223.443.324.163.78U.S. weighted average cost of ethylene production (cents/pound)23.8424.6323.8032.5526.20U.S. ethylene (cents/pound)31.5031.5032.2540.5033.94U.S. polyethylene (high density) (cents/pound)59.6765.0069.3372.0066.50U.S. propylene (cents/pound)24.8332.0046.1748.6737.92U.S. polypropylene (homopolymer) (cents/pound)51.5058.5072.6775.0064.42Olefins and Polyolefins - Europe, Asia, InternationalVolumes (million pounds)Ethylene produced7859269248683,503Propylene produced4675675865292,149Polyethylene sold1,1171,2341,2601,4165,027Polypropylene sold1,5911,7491,5052,0136,858Market PricesWestern Europe weighted average cost of ethylene production (euro 0.01 per pound)22.123.322.827.023.8Western Europe ethylene (euro 0.01 per pound)27.031.237.038.333.4Western Europe polyethylene (high density) (euro 0.01 per pound)37.539.947.247.042.9Western Europe propylene (euro 0.01 per pound)20.923.932.033.927.7Western Europe polypropylene (homopolymer) (euro 0.01 per pound)34.335.844.045.239.9Intermediates and DerivativesVolumes  (million pounds)Propylene oxide and derivatives6815767377012,695Ethylene oxide and derivatives2242752992651,063Styrene monomer3945146667172,291Acetyls2904644954331,682TBA Intermediates2902743864311,381Refining and OxyfuelsVolumes Houston Refining crude processing rate (thousands of barrels per day)269231262212244Berre refinery crude processing rate (thousands of barrels per day)8693848186MTBE/ETBE sales volumes (million gallons)205220243163831Market marginsWTI - 2-1-1 (USD per barrel)9.647.396.254.656.98WTI - Maya  (USD per barrel)4.464.585.036.655.18Urals 4-1-2-1 (USD per barrel)6.965.695.104.525.57ETBE - Northwest Europe (cents per gallon)46.4101.270.156.868.6Source: CMAI, Bloomberg, LyondellBasell Industries.Table 10 ? LyondellBasell Industries ? Selected Segment Operating Information 2010Q1Q2Q3YTDOlefins and Polyolefins - AmericasVolumes  (million pounds)Ethylene produced2,0191,9982,1846,201Propylene produced7557777902,322Polyethylene sold1,3391,2651,5174,121Polypropylene sold6156706721,957Market PricesWest Texas Intermediate crude oil (USD per barrel)78.8878.0576.0977.65Natural gas (USD per million BTUs)5.364.044.354.58U.S. weighted average cost of ethylene production (cents/pound)34.3626.7125.3628.81U.S. ethylene (cents/pound)52.3345.5838.3345.42U.S. polyethylene (high density) (cents/pound)83.3384.0077.6781.67U.S. propylene (cents/pound)61.5063.3356.1760.33U.S. polypropylene (homopolymer) (cents/pound)87.8389.8382.6786.78Olefins and Polyolefins - Europe, Asia, InternationalVolumes  (million pounds)Ethylene produced8618429942,697Propylene produced5095406241,673Polyethylene sold1,3641,2301,3163,910Polypropylene sold1,5901,7631,8895,242Market PricesWestern Europe weighted average cost of ethylene production (euro 0.01 per pound)28.727.326.527.5Western Europe ethylene (euro 0.01 per pound)41.643.743.142.8Western Europe polyethylene (high density) (euro 0.01 per pound)51.453.852.452.5Western Europe propylene (euro 0.01 per pound)38.945.143.142.4Western Europe polypropylene (homopolymer) (euro 0.01 per pound)51.360.360.357.3Intermediates and DerivativesVolumes  (million pounds)Propylene oxide and derivatives8697818722,522Ethylene oxide and derivatives265250206721Styrene monomer5897808272,196Acetyls3794394051,223TBA Intermediates4724704541,396Refining and OxyfuelsVolumes Houston Refining crude processing rate (thousands of barrels per day)263189261237Berre refinery crude processing rate (thousands of barrels per day)73999990MTBE/ETBE sales volumes (million gallons)189236248673Market marginsWTI - 2-1-1 (USD per barrel)6.8510.457.608.31WTI - Maya  (USD per barrel)8.949.548.549.00Urals 4-1-2-1 (USD per barrel)5.917.335.896.32ETBE - Northwest Europe (cents per gallon)49.171.745.256.0Source: CMAI, Bloomberg, LyondellBasell IndustriesTable 11 ? LyondellBasell Industries ? Unaudited Income Statement InformationPredecessor2009 (Millions of dollars, except per share data)Q1Q2Q3Q4YTDSales and other operating revenues $  5,900$ 7,499$ 8,612$ 8,817$ 30,828Cost of sales5,7927,1587,9568,61029,516Selling, general and administrative expenses 207227199217850Research and development expenses42253840145Operating income (loss)(141)89419(50)317Income (loss) from equity investments(20)22(168)(15)(181)Interest expense, net(425)(498)(441)(413)(1,777)Other income (expense), net857113529320Income (loss) before income taxes and reorganization items(501)(316)(55)(449)(1,321)Reorganization items(948)(124)(928)(961)(2,961)Income (loss) before income taxes(1,449)(440)(983)(1,410)(4,282)Provision for (benefit from) income taxes(432)(87)(332)(560)(1,411)Net income (loss)(1,017)(353)(651)(850)(2,871)Less: Net (income) loss attributable to non-controlling interests12126Net income (loss) attributable to the Company$ (1,016)$  (351)$  (650)$  (848)$ (2,865)Table 11 ? LyondellBasell Industries ? Unaudited Income Statement InformationPredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010April 1 -May 1 -Jan. 1 -May 1 -(Millions of dollars, except per share data)Q1April 30June 30Q2Q3April 30Sept. 30YTDSales and other operating revenues $ 9,755$ 3,712$          6,772$       10,484$ 10,302$            13,467$           17,074$       30,541Cost of sales9,1303,2846,1989,4829,07512,41415,27327,687Selling, general and administrative expenses 21791129220204308333641Research and development expenses41142337355558113Operating income (loss)3673234227459886901,4102,100Income (loss) from equity investments55292756298456140Interest expense, net(409)(299)(120)(419)(186)(708)(306)(1,014)Other income (expense), net(200)(65)54(11)(97)(265)(43)(308)Income (loss) before income taxes and reorganization items(187)(12)383371734(199)1,117918Reorganization Items2077,803(8)7,795(13)8,010(21)7,989Income (loss) before income taxes207,7913758,1667217,8111,0968,907Provision for (benefit from) income taxes12(705)28(677)254(693)282(411)Net income (loss)88,4963478,8434678,5048149,318Less: Net (income) loss attributable to non-controlling interests258(5)53760262Net income (loss) attributable to the Company$      10$ 8,554$             342$         8,896$      474$              8,564$                816$         9,380Table 12 ? LyondellBasell Industries ?  Unaudited Cash Flow InformationPredecessor2009 (Millions of dollars)Q1Q2Q3Q4YTDCash flows from operating activities:Net loss$ (1,017)$       (353)$ (651)$ (850)$ (2,871)Adjustments:Depreciation and amortization4164794434361,774Amortization of debt-related costs98144136128506Inventory valuation adjustment55342018127Equity investments -Equity (income) loss20(22)16815181Distributions of earnings 2712526Deferred income taxes(434)(122)(338)(505)(1,399)Reorganization-related payments, net(22)(68)(93)(157)(340)Reorganization and fresh-start accounting adjustments, net9481249289612,961Payment of Claims under Plan of ReorganizationUnrealized foreign currency exchange (gain) loss.(15)(98)(141)61(193)Changes in assets and liabilities:Accounts receivable332(470)(79)88(129)Inventories310140(211)(279)(40)Accounts payable  (213)193(102)22199Repayment of accounts receivable securitization facility(503)---(503)Prepaid expenses and other current assets(107)(189)54(87)(329)Other, net(441)(90)17(143)(657)Net cash provided by (used in) operating activities(571)(291)163(88)(787)Cash flows from investing activities:Expenditures for property, plant and equipment(197)(173)(128)(281)(779)Proceeds from insurance claims1656-48120Other828(16)2848Net cash used in investing activities(173)(89)(144)(205)(611)Cash flows from financing activities:Issuance of Class B common stock-----Net borrowings (repayments) under debtor-in-possession facilities and notes2,048270(145)1382,311Net repayments under pre-petition revolving credit facilities(766)---(766)Net borrowings (repayments) under revolving credit facilities and other short-term debts(539)1542598(262)Net borrowings (repayments) under long-term debt(49)(5)(9)(5)(68)Payments of debt and equity issuance costs(93)---(93)Other --(25)4(21)Net cash provided by (used in) financing activities601419(154)2351,101Effect of exchange rate changes on cash(25)178(3)(3)Increase (decrease) in cash and cash equivalents(168)56(127)(61)(300)Cash and cash equivalents at beginning of period858690746619858Cash and cash equivalents at end of period$     690$        746$  619$  558$     558Table 12 ? LyondellBasell Industries ? Unaudited Cash Flow InformationPredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010April 1 -May 1 -January 1 -May 1 -(Millions of dollars)Q1April 30June 30Q2Q3April 30Sept. 30YTDCash flows from operating activities:Net income $     8$        8,496$             347$         8,843$   467$              8,504$                814$         9,318Adjustments:Depreciation and amortization424141129270222565351916Amortization of debt-related costs10620152061030715322Inventory valuation adjustment--33333332-365365Equity investments -Equity (income) loss(55)(29)(27)(56)(29)(84)(56)(140)Distributions of earnings 1352833-182846Deferred income taxes(15)(755)(3)(758)188(770)185(585)Reorganization-related payments, net(87)(60)(92)(152)(45)(147)(137)(284)Reorganization and fresh-start accounting adjustments, net(207)(7,803)8(7,795)13(8,010)21(7,989)Payment of claims under Plan of Reorganization-(260)(183)(443)(14)(260)(197)(457)Unrealized foreign currency exchange loss202621476726421285Changes in assets and liabilities:Accounts receivable(480)(170)139(31)(105)(650)34(616)Inventories(384)16567275(368)131(237)Accounts payable  122127226353(59)249167416Repayment of accounts receivable securitization facility--------Prepaid expenses and other current assets158(111)(8)(119)15847150197Other, net(178)(423)132(291)205(601)337(264)Net cash provided by (used in) operating activities(373)(563)1,1045411,125(936)2,2291,293Cash flows from investing activities:Expenditures for property, plant and equipment(139)(87)(113)(200)(153)(226)(266)(492)Proceeds from insurance claims--------Other12145(4)13-13Net cash used in investing activities(127)(86)(109)(195)(157)(213)(266)(479)Cash flows from financing activities:Issuance of Class B common stock-2,800-2,800-2,800-2,800Net borrowings (repayments) under debtor-in-possession facilities and notes522(3,017)-(3,017)-(2,495)-(2,495)Net repayments under pre-petition revolving credit facilities--------Net borrowings (repayments) under revolving credit facilities and other short-term debts(4)36130166(79)325183Net borrowings (repayments) under long-term debt(9)3,242-3,242-3,233-3,233Payments of debt and equity issuance costs(13)(240)(2)(242)-(253)(2)(255)Other (6)459(9)(2)(4)(6)Net cash provided by (used in) financing activities4902,8251332,958(88)3,315453,360Effect of exchange rate changes on cash(11)(2)(86)(88)199(13)113100Increase (decrease) in cash and cash equivalents(21)2,1741,0423,2161,0792,1532,1214,274Cash and cash equivalents at beginning of period5585372,7115373,7535582,711558Cash and cash equivalents at end of period$ 537$        2,711$          3,753$         3,753$     4,832$              2,711$             4,832$         4,832Table 13 ? LyondellBasell Industries ? Unaudited Balance Sheet Information Predecessor2009(Millions of dollars)March 31June 30Sept. 30Dec. 31Cash and cash equivalents$       690$      746$                619$              558Short-term investments22182111Accounts receivable, net2,7103,2733,3743,287Inventories2,8722,7552,9843,277Prepaid expenses and other current assets9211,2849791,133    Total current assets7,2158,0767,9778,266Property, plant and equipment, net15,37215,35115,29915,152Investments and long-term receivables:    Investment in PO joint ventures942934943922    Equity investments1,0931,1481,0141,085    Other investments and long-term receivables848590112Goodwill----Intangible assets, net2,3802,2571,9591,861Other assets, net344324361363    Total assets$  27,430$ 28,175$           27,643$         27,761Current maturities of long-term debt$  10,483$   9,207$                501$              497Short-term debt5,6135,9955,9126,182Accounts payable1,6832,2641,7802,128Accrued liabilities1,4881,3881,3871,390Deferred income taxes235269240170    Total current liabilities19,50219,1239,82010,367Long-term debt304302307305Other liabilities1,5171,4061,4331,361Deferred income taxes2,7452,7062,4722,081Liabilities subject to compromise10,46612,01921,63622,494Stockholders' equity (7,221)(7,502)(8,149)(8,976)Non-controlling interests117121124129    Total liabilities and stockholders' equity$  27,430$ 28,175$           27,643$         27,761Table 13 ? LyondellBasell Industries ? Unaudited Balance Sheet Information PredecessorSuccessorMarch 31,June 30,Sept. 30,(Millions of dollars)201020102010Cash and cash equivalents$                 537$     3,753$             4,832Short-term investments2--Accounts receivable, net3,6423,5333,800Inventories3,5904,3724,412Prepaid expenses and other current assets9461,029899    Total current assets8,71712,68713,943Property, plant and equipment, net14,6876,8397,216Investments and long-term receivables:    Investment in PO joint ventures880434447    Equity investments1,1251,5071,572    Other investments and long-term receivables907764Goodwill-1,0611,105Intangible assets, net1,7481,4271,411Other assets, net338257272    Total assets$            27,585$   24,289$           26,030Current maturities of long-term debt$                 487$            8$                    8Short-term debt6,675557518Accounts payable2,2132,5262,562Accrued liabilities1,2201,1991,513Deferred income taxes163444446    Total current liabilities10,7584,7345,047Long-term debt3046,7456,799Other liabilities1,3172,0132,086Deferred income taxes2,0128671,155Liabilities subject to compromise22,058--Stockholders' equity (8,975)9,86810,882Non-controlling interests1116261    Total liabilities and stockholders' equity$            27,585$   24,289$           26,030SOURCE LyondellBasell IndustriesFor further information: Media, David Harpole, +1-713-309-4125, or Investors, Doug Pike, +1-713-309-4590, both of LyondellBasell Industries