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Press release from PR Newswire

LyondellBasell Reports Record Third-Quarter 2011 Results

Friday, October 28, 2011

LyondellBasell Reports Record Third-Quarter 2011 Results06:00 EDT Friday, October 28, 2011Strong Operations and Advantaged Asset Positions Drive Record Quarterly Results Third-Quarter 2011 Highlights - Net income of $895 million; diluted earnings per share of $1.51; Sales of $13.3 billion - Quarterly EBITDA of $1,788 million; 15 percent increase from second quarter 2011, 45 percent increase from third quarter 2010 - Excellent results across the portfolio, particularly in U.S. olefins and Refining & Oxyfuels businesses - Closed third quarter with no net debt - Initiated bond tender and covenant amendment effort - Quarterly dividend doubled to 20 cents per shareROTTERDAM, Netherlands, Oct. 28, 2011 /PRNewswire/ -- LyondellBasell Industries (NYSE: LYB) today announced net income for the third quarter 2011 of $895 million, or $1.51 per share.  Third-quarter 2011 EBITDA was $1,788 million, a 15 percent increase from the second quarter 2011.  Sales in the third quarter were $13,297 million.  During the third quarter 2011, results improved over a very strong second quarter 2011.  Improvements in the performance of U.S. olefins and the Refining & Oxyfuels segment were most notable.Table 1 - Earnings Summary(a)Three Months EndedNine Months EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars (except share data)20112011201020112010 Sales and other operating revenues $13,297$14,042$10,302$39,591$30,541Net income(b) (c)8958044672,3589,318Diluted earnings per share (U.S. dollars) 1.511.380.844.12N/ADiluted share count (millions)  575575564570N/AEBITDA(d)1,7881,5531,1984,7432,908EBITDA excluding LCM inventory valuation adjustments 1,7881,5531,2304,7433,273(a)  For all periods prior to May 1, 2010, EBITDA is calculated using a current cost inventory basis.  For periods on and after May 1, 2010, net income and EBITDA are calculated using the LIFO (Last-In, First-Out) method of inventory accounting.(b)  Includes net income (loss) attributable to non-controlling interests.  See Table 11.(c)  The nine months ended September 30, 2010 includes an $8,640 million after-tax gain on the discharge of liabilities subject to compromise related to emergence from Chapter 11 and fresh-start accounting adjustments.  (d)  See the end of this release for an explanation of the Company's use of EBITDA and Table 9 for reconciliations of EBITDA to net income.In addition, results reflect the following:Table 2 - Charges (Benefits) Included in Net IncomeThree Months EndedNine Months EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars (except share data)2011201120102011 2010 Pretax charges (benefits): Reorganization items$ -$28$13$30($28)Gain on discharge of liabilities subjectto compromise----(13,617)Change in net assets resulting from application of fresh-start accounting----6,278Lower of cost or market inventory adjustment--32-365Unplanned maintenance at the Houston refinery----14Sale of precious metals-(41)-(41)-Corporate restructurings1461-75-Environmental accruals-16-16-Asset retirement obligation10--10-Warrants - mark to market(22)(6)763159Impairments2613-44-Charge related to dispute over environmental indemnity--6464Premiums and charges on early repayment of debt-12-12-Insurance settlement---(34)-Total pretax charges (benefits)2883185143(6,865)Provision for (benefit from) income tax related to these items(14)(21)(13)(24)(1,062)After-tax effect of net charges (credits)$14$62$172$119($7,927)Effect on diluted earnings per share($0.02)($0.11)$0.30($0.21)N/A"We earned $895 million during the third quarter and eclipsed our previous record quarterly net income set last quarter.  EBITDA during the quarter was nearly $1.8 billion ? also a record," said Jim Gallogly, LyondellBasell Chief Executive Officer."In U.S. olefins, we benefited from both very strong ethane- and naphtha-based ethylene margins.  Our Midwest ethylene plants were especially advantaged," added Gallogly.  "We achieved good results in our Olefins & Polyolefins ? Europe, Asia, International segment due to our differentiated positions in polypropylene compounding, butadiene and our joint ventures.  Intermediates & Derivatives continued its strong, stable performance with EBITDA margins of 18%.  Results for Refining & Oxyfuels were particularly strong as the Houston refinery operated above nameplate capacity, and we took full advantage of our flexibility optimizing the crude oil feed slate," he said."Our strong results over the last year and a half have enabled us to close the quarter with no net debt and begin to restructure our balance sheet," Gallogly said.  Details on LyondellBasell's plans to improve its capital structure can be found in a news release dated Oct. 20, 2011."Additionally, we increased our dividend during the quarter, doubling it to 20 cents per share," added Gallogly.OUTLOOK"We are currently operating in a period of global economic uncertainty, which has introduced significant raw material price and profit margin volatility.  The volatility limits our near-term visibility, but our strategy of focusing on the basics and running our assets safely and efficiently has proven successful in any environment," commented Gallogly."Certain underlying fundamentals that have supported our business remain intact.  A low ratio of U.S. natural gas to crude oil prices creates a favorable condition for our U.S. operations although ethane prices have increased in recent weeks.  The spread between heavy and light crude oil continues to benefit the Houston refinery.  We also have several businesses that have less volatile earnings such as our propylene oxide and polypropylene compounding businesses, and our Saudi joint ventures," added Gallogly.    "During the coming months, in addition to olefins chain margin volatility, we expect to see typical seasonal impacts in the Refining & Oxyfuels and polyolefins areas," said Gallogly.LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT LyondellBasell operates in five business segments: 1) Olefins & Polyolefins ? Americas; 2) Olefins & Polyolefins ? Europe, Asia, International; 3) Intermediates & Derivatives; 4) Refining & Oxyfuels; and 5) Technology.Olefins & Polyolefins - Americas  (O&P-Americas) ? The primary products of this segment include ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins.  Table 3 - O&P?Americas Financial Overview(a)Three Months EndedNine Months EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars20112011201020112010 Operating income $599$509$448$1,529$917EBITDA 6735784921,7351,180EBITDA excluding LCM charges 6735785181,7351,377(a)  For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.  For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.  Three months ended September 30, 2011 versus three months ended June 30, 2011 ? O&P-Americas segment EBITDA increased $95 million versus the second quarter 2011.  Olefins profitability improved approximately $155 million from the prior period.  An ethylene sales price decrease of approximately 2 cents per pound was more than offset by an approximately 6 cents per pound decrease in the company's average cost-of-ethylene-production metric.  Ethylene production volume increased during the quarter primarily as a result of the return to service of one of the Channelview olefins plants which had undergone scheduled maintenance activity during the second quarter.  Polyethylene (PE) results declined approximately $35 million chiefly as a result of lower sales prices.  Polypropylene (PP) profits for the third quarter 2011 declined approximately $15 million primarily due to lower margins.  We received $10 million of JV dividends in the third quarter 2011.Three months ended September 30, 2011 versus three months ended September 30, 2010 ? O&P-Americas results increased $155 million versus the third quarter 2010 after excluding a third-quarter 2010 Lower of Cost or Market (LCM) charge of $26 million.  Olefins results increased approximately $300 million compared to the prior year period largely as a result of significantly improved margins.  This increase was partially offset by PE results which declined approximately $120 million compared to the third quarter 2010 as a result of lower margins caused by higher ethylene prices.  PP results declined approximately $30 million compared to the third quarter 2010 due to lower sales volumes and margins.Olefins & Polyolefins ? Europe, Asia, International (O&P-EAI) ? The primary products of this segment include ethylene and its co-products (propylene and butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and Polybutene-1 resins.  Table 4 - O&P?EAI Financial Overview(a)Three Months EndedNine Months EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars20112011201020112010 Operating income $144$207$231$530$460EBITDA 261275289869693EBITDA excluding LCM charges 261275294869698(a)  For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.  For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.  Three months ended September 30, 2011 versus three months ended June 30, 2011 ? O&P-EAI segment EBITDA decreased $14 million versus the second quarter 2011.  Olefins results declined approximately $55 million from the second quarter 2011 due to lower cracker margins and lower ethylene and co-product production volumes.  Polyethylene results declined approximately $15 million from the prior period chiefly due to lower margins.  Polypropylene results declined approximately $65 million due to lower margins.  Polypropylene compounds results improved approximately $15 million from the second quarter 2011.  We received $45 million of dividends from joint ventures during the third quarter 2011.  Second quarter 2011 results included approximately $60 million of accruals related to a proposed European staff reorganization and possible environmental remediation charges.    Three months ended September 30, 2011 versus three months ended September 30, 2010 ? Excluding a $5 million third-quarter 2010 LCM adjustment, EBITDA declined $33 million versus the third quarter 2010.  Underlying olefins results were relatively unchanged while polyethylene results declined approximately $20 million compared to the prior year period primarily as a result of lower margins.  Polypropylene EBITDA fell approximately $90 million compared to the prior year period due to lower sales volumes and compressed margins.  Polypropylene compounding results improved slightly compared to the prior year.  Third quarter 2010 results included a charge of approximately $43 million related to a dispute over an environmental indemnity.Intermediates & Derivatives (I&D) ? The primary products of this segment include propylene oxide (PO) and its co-products (styrene monomer, tertiary butyl alcohol (TBA), isobutylene and tertiary butyl hydroperoxide), and derivatives (propylene glycol, propylene glycol ethers and butanediol); acetyls, and ethylene oxide and its derivatives.  Table 5 - I&D Financial Overview(a)Three Months EndedNine Months EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars20112011201020112010 Operating income $259$235$207$728$473EBITDA 297314243881623EBITDA excluding LCM charges 297314243881648(a)  For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.  For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.  Three months ended September 30, 2011 versus three months ended June 30, 2011 ? I&D segment EBITDA decreased $17 million versus the second quarter 2011.  PO and PO derivatives results improved versus the prior period due to higher margins which were partially a result of industry outages.  Underlying Intermediates profitability declined slightly versus the second quarter which included a $41 million gain on the sale of spent silver catalyst. Three months ended September 30, 2011 versus three months ended September 30, 2010 ?I&D EBITDA increased $54 million compared to the third quarter 2010.  PO and PO derivatives EBITDA improved versus the prior year period due to increased PO derivative margins.  Increased acetyls and ethylene oxide / ethylene glycol volumes and margins also contributed to improved results compared to the third quarter 2010.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 EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars20112011201020112010 Operating income (loss) $454$296$83$914($2)EBITDA 5193531401,082240EBITDA excluding LCM charges 5193531411,082373(a)  For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.  For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.  Three months ended September 30, 2011 versus three months ended June 30, 2011 ? Refining & Oxyfuels segment EBITDA increased $166 million versus the second quarter 2011.  The Houston refinery financial performance improved approximately $135 million.  Crude oil throughput at the Houston refinery increased to 269,000 barrels per day, slightly above nameplate capacity.  Although the industry average benchmark margin declined approximately $2 per barrel during the quarter, margins at the Houston refinery expanded due to optimization of the crude oil mix.  The Berre refinery continued to record a loss.  A labor strike at the end of the third quarter 2011 had minimal impact on results.  Oxyfuels results improved approximately $20 million due to improved margins.Three months ended September 30, 2011 versus three months ended September 30, 2010 ? Excluding a $1 million LCM charge in the third quarter 2010, segment EBITDA increased $378 million versus the third quarter 2010.  At the Houston refinery, EBITDA increased approximately $330 million versus the prior year period.  A higher industry average benchmark margin and optimization of the crude oil feed slate drove results.  Berre refinery results were relatively unchanged versus the prior year period.  Oxyfuels results improved approximately $40 million between the periods mainly as a result of higher 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 EndedSeptember 30, June 30, September 30, September 30,Millions of U.S. dollars20112011201020112010 Operating income $7$23$38$96$100EBITDA 454278178168EBITDA excluding LCM charges 454278178168(a)  For all periods prior to May 1, 2010, operating income and EBITDA are calculated on a current cost inventory basis.  For periods on and after May 1, 2010, operating income and EBITDA are calculated using the LIFO method of inventory accounting. See Table 8.  Three months ended September 30, 2011 versus three months ended June 30, 2011 ? Catalyst results were relatively unchanged compared to the second quarter 2011.  Three months ended September 30, 2011 versus three months ended September 30, 2010 ? Catalyst results improved compared to the prior year period while licensing and technology services results declined compared to third quarter 2010.LiquidityCompany liquidity, which we define as cash and cash equivalents plus funds available through established lines of credit, was approximately $7.9 billion on Sept. 30, 2011.  The cash balance was approximately $5.9 billion including restricted cash on Sept. 30, 2011.Capital SpendingCapital expenditures, including maintenance turnaround, catalyst and information technology related expenditures, were $281 million during the third quarter 2011. This figure includes approximately $75 million for a pipeline acquisition.CONFERENCE CALLLyondellBasell will host a conference call today, Oct. 28, 2011, at 11:00 a.m. ET.  Participating on the call will be: Jim Gallogly, Chief Executive Officer; Karyn Ovelmen, Executive Vice President and Chief Financial Officer; Kent Potter, Principal Financial Officer; Sergey Vasnetsov, Senior Vice President - Strategic Planning and Transactions; and Doug Pike, Vice President of Investor Relations.  The toll-free dial-in number in the U.S. is 888-982-4611.  For international numbers, please go to our website, www.lyondellbasell.com/teleconference, for a complete listing of toll-free numbers by country.  The pass code for all numbers is 7379598. A replay of the call will be available from 1:00 p.m. ET Oct. 28 to 11:00 p.m. ET on Nov. 28.  The replay dial-in numbers are 800-789-9018 (U.S.) and +1 203-369-3337 (international). The pass code for each is 6798. 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 58 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive components, home furnishings, construction materials and biofuels. More information about LyondellBasell can be found at www.lyondellbasell.com.FORWARD-LOOKING STATEMENTSThe statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil and natural gas; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt.  Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2010, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.NON-GAAP 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.We have included EBITDA in this press release, as we believe that EBITDA is a measure commonly used by investors.  However, EBITDA, as presented herein, may not be comparable to a similarly titled measure reported by other companies due to differences in the way the measure is calculated. For purposes of this release, EBITDA for predecessor periods means earnings before interest, taxes, depreciation, amortization and restructuring costs, as adjusted for other items management does not believe are indicative of the Company's underlying results of operations such as impairment charges, reorganization items, the effect of mark-to-market accounting on our warrants and current cost inventory adjustments.  EBITDA for successor periods means earnings before interest, taxes, depreciation and amortization, as adjusted for the same items, to the extent applicable in the successor periods.  EBITDA also includes dividends from joint ventures.  EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternatives to operating cash flows as a measure of our liquidity.  Reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures are provided in the financial tables at the end of this release.OTHER FINANCIAL MEASURE PRESENTATION NOTESAs a result of the Company's reorganization proceedings and its emergence from Chapter 11, financial results are prepared and disclosed for a predecessor company for the time period before May 1, 2010, and the successor company for time periods after April 30, 2010, the date of emergence.  For financial accounting purposes, the predecessor and successor companies are considered to be two separate entities.  Further, the reorganization under Chapter 11 and the application of fresh-start accounting make comparisons of the predecessor and successor periods difficult.  The primary impacts affecting the comparisons include (i) significant changes to our inventory valuations; (ii) lower depreciation and amortization expense; and (iii) lower interest expense.  In connection with the application of fresh-start accounting, we were required to write our inventory up to fair market value, which was significant given the high crude oil prices at April 30, 2010.  However, in the fourth quarter 2010, prices rose to levels close to those at April 30, 2010, and it became necessary to reverse significant portions of the LCM charges taken in the second and third quarters.  The lower depreciation and amortization expenses in the successor period are the result of the revaluation of assets in connection with fresh-start accounting.  Lower interest expense is the result of the substantial changes to the balance sheet as a result of the reorganization. Prior to emergence from Chapter 11, we utilized a combination of First-In, First-Out and Last-In, First-Out inventory methods for financial reporting. For purposes of evaluating segment results, management reviewed operating results using current cost, which approximates LIFO. As supplementary information, and for our segment reporting, we provide EBITDA information on a current cost basis for periods prior to our emergence from Chapter 11. Since emergence from Chapter 11, we have utilized the LIFO inventory methodology and EBITDA information for periods after our emergence is on a LIFO basis.  The combined financial results and measures that are disclosed in this press release, including EBITDA, therefore use both current cost and LIFO methodologies.This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.Table 8 - Reconciliation of Segment Information to Consolidated Financial Information2011 (Millions of U.S. dollars) Q1Q2Q3YTDSales and other operating revenues:  Olefins & Polyolefins - Americas $3,572$4,010$3,875$11,457Olefins & Polyolefins - Europe, Asia, International 3,9444,2643,91812,126Intermediates & Derivatives 1,6921,7771,6175,086Refining & Oxyfuels 4,7205,8335,86916,422Technology 139126129394Other/elims (1,815)(1,968)(2,111)(5,894)Total $12,252$14,042$13,297$39,591Operating income (loss):  Olefins & Polyolefins - Americas $421$509$599$1,529Olefins & Polyolefins - Europe, Asia, International 179207144530Intermediates & Derivatives 234235259728Refining & Oxyfuels 164296454914Technology 6623796Other 1(5)4- -Current cost adjustment - -- -- -- -Total $1,065$1,265$1,467$3,797Depreciation and amortization: Olefins & Polyolefins - Americas $58$59$64$181Olefins & Polyolefins - Europe, Asia, International 576669192Intermediates & Derivatives 343735106Refining & Oxyfuels 424648136Technology 24162161Other - -- -- -- -Total $215$224$237$676EBITDA: (a)Olefins & Polyolefins - Americas $484$578$673$1,735Olefins & Polyolefins - Europe, Asia, International 333275261869Intermediates & Derivatives 270314297881Refining & Oxyfuels 2103535191,082Technology 914245178Other 14(9)(7)(2)Total EBITDA $1,402$1,553$1,788$4,743Capital, turnarounds and IT deferred spending:  Olefins & Polyolefins - Americas $66$138$149$353Olefins & Polyolefins - Europe, Asia, International 423746125Intermediates & Derivatives 5152545Refining & Oxyfuels 1015853212Technology 73818Other 110- -11Total   222261281764Deferred charges included above (1)- -(2)(3)Capital expenditures $221$261$279$761(a) See Table 9 for a reconciliation of total EBITDA, excluding LCM inventory valuation adjustments, to net income.  Table 8 - Reconciliation of Segment Information to Consolidated Financial InformationPredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010 April 1 -May 1 -January 1 -May 1 -(Millions of U.S. dollars) Q1April 30June 30Q2Q3April 30September 30YTDSales and other operating revenues: (a)Olefins & Polyolefins - Americas $3,020$1,163$2,004$3,167$3,247$4,183$5,251$9,434Olefins & Polyolefins - Europe, Asia, International 3,1191,0662,1403,2063,2474,1055,3879,492Intermediates & Derivatives 1,3165049401,4441,4531,8202,3934,213Refining & Oxyfuels 3,4151,3332,4033,7363,8674,7486,27011,018Technology 1103575110157145232377Other/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 & Polyolefins - Americas $145$175$149$324$448$320$597$917Olefins & Polyolefins - Europe, Asia, International 7144114158231115345460Intermediates & Derivatives 12334109143207157316473Refining & Oxyfuels (128)29144383(99)97(2)Technology 3182331383961100Other (59)181331(19)(41)(6)(47)Current cost adjustment 18415- -15- -199- -199Total $367$323$422$745$988$690$1,410$2,100Depreciation and amortization: Olefins & Polyolefins - Americas $119$41$51$92$42$160$93$253Olefins & Polyolefins - Europe, Asia, International 812633596010793200Intermediates & Derivatives 69222345309153144Refining & Oxyfuels 135459545518064244Technology 17661240234669Other 3178(5)426Total $424$141$129$270$222$565$351$916EBITDA: (a)(b)Olefins & Polyolefins - Americas $274$216$198$414$492$490$690$1,180Olefins & Polyolefins - Europe, Asia, International 15278174252289230463693Intermediates & Derivatives 19656128184243252371623Refining & Oxyfuels 376219714079161240Technology 471429437861107168Other (32)87280(44)(24)284Total EBITDA 6404486221,0701,1981,0881,8202,908LCM inventory valuation adjustments - -- -33333332- -365365Total excluding LCM inventory valuation adjustments$640$448$955$1,403$1,230$1,088$2,185$3,273Capital, turnarounds and IT deferred spending:  Olefins & Polyolefins - Americas $69$20$50$70$40$89$90$179Olefins & Polyolefins - Europe, Asia, International 594331743210263165Intermediates & Derivatives 7551039124456Refining & Oxyfuels 64152237347956135Technology 102357121022Other 4358971421Total   21388116204161301277578Deferred 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 EBITDA were determined on a current cost basis.  For periods following May 1, 2010, Successor operating income and EBITDA were determined using the LIFO method of inventory accounting.(b)See Table 9 for a reconciliation of total EBITDA, excluding LCM inventory valuation adjustments, to net income.  (c)Deferred IT spending is excluded from capital expenditures for all periods presented.  Turnarounds, which are classified as property, plant and equipment from May 1, 2010, were excluded from capital expenditures for periods prior to May 1, 2010.  Table 9 - Reconciliation of EBITDA to Net IncomeSuccessor2011 (Millions of U.S. dollars) Q1Q2Q3YTDSegment EBITDA: Olefins & Polyolefins - Americas $484$578$673$1,735Olefins & Polyolefins - Europe, Asia, International 333275261869Intermediates & Derivatives 270314297881Refining & Oxyfuels 2103535191,082Technology 914245178Other 14(9)(7)(2)Total EBITDA 1,4021,5531,7884,743LCM inventory valuation adjustments - -- -- -- -Total EBITDA excluding LCM inventory valuation adjustments 1,4021,5531,7884,743Add:  Income from equity investment 587352183Unrealized foreign exchange (loss) gain (3)4(17)(16)Deduct:  Depreciation and amortization  (215)(224)(237)(676)Impairment charge (5)(13)(26)(44)Reorganization items (2)(28)- -(30)Interest expense, net (155)(164)(145)(464)Joint venture dividends received (96)(11)(55)(162)Provision for income taxes (263)(388)(489)(1,140)Fair value change in warrants (59)622(31)Other (2)(5)2(5)LyondellBasell Industries net income 6608038952,358Less: Net loss attributable to non-controlling interests 31- -4Net Income $663$804$895$2,362Table 9 - Reconciliation of EBITDA to Net IncomePredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010 April 1 -May 1 -January 1 - May 1 -(Millions of U.S. dollars) Q1April 30June 30Q2Q3Q4April 30September 30YTDSegment EBITDA: (a)Olefins & Polyolefins - Americas $ 274 $ 216 $ 198 $ 414 $ 492 $ 505 $ 490 $ 690 $ 1,180 Olefins & Polyolefins - Europe, Asia, International 152  78  174  252  289  125  230  463  693 Intermediates & Derivatives 196  56  128  184  243  228  252  371  623 Refining & Oxyfuels 3  76  21  97  140  212  79  161  240 Technology 47  14  29  43  78  44  61  107  168 Other (32) 8  72  80  (44) (29) (24) 28  4 Total EBITDA 640  448  622  1,070  1,198  1,085  1,088  1,820  2,908 LCM inventory valuation adjustments - -  - - 333 333 32 (323) - - 365 365 Total EBITDA excluding LCM inventory valuation adjustments 640  448  955  1,403  1,230  762  1,088  2,185  3,273 Add:  Income from equity investment 55  29  27  56  29  30  84  56  140 Unrealized foreign exchange loss (202) (62) (14) (76) (7) (1) (264) (21) (285)Gain on sale of Flavors and Fragrances business - -  - -  - -  - -  - - 64  - -  - -  - - Deduct:  LCM inventory valuation adjustments - -  - - (333)(333)(32)323  - - (365)(365)Depreciation and amortization   (424) (141) (129) (270) (222) (207) (565) (351) (916)Impairment charge (3) (6) - -  (6) - -  (28) (9) - -  (9)Reorganization items 207  7,181  (8) 7,173  (13) (2) 7,388  (21) 7,367 Interest expense, net (409) (299) (120) (419) (186) (222) (708) (306) (1,014)Joint venture dividends received (13) (5) (28) (33) -  (6) (18) (28) (46)(Provision for) benefit from income taxes (12) 1,327  (28) 1,299  (254) 112  1,315  (282) 1,033 Fair value change in warrants - -  - -  17 17 (76)(55) - - (59)(59)Current cost adjustment to inventory 184  15  - -  15  - -  - -  199  - -  199 Other (15) 9  8  17  (2) (4) (6) 6  - - LyondellBasell Industries net income 8  8,496  347  8,843  467  766  8,504  814  9,318 Less: Net (income) loss attributable to non-controlling interests 2  58  (5) 53  7  5  60  2  62 $ 10 $ 8,554 $ 342 $ 8,896 $ 474 $ 771 $ 8,564 $ 816 $ 9,380 (a)  For periods prior to May 1, 2010, Predecessor segment operating income and EBITDA were determined on a current cost basis.  For periods following May 1, 2010, Successor operating income and EBITDA were determined using the LIFO method of inventory accounting.  Table 10 - Selected Segment Operating Information2010 2011 Q1Q2Q3YTDQ1Q2Q3YTDOlefins and Polyolefins - Americas Volumes (million pounds) Ethylene produced 2,0191,9982,1846,2012,0891,9292,1346,152Propylene produced 7557777902,3227695568382,163Polyethylene sold 1,3301,3201,4724,1221,4051,3771,3684,150Polypropylene sold 6156706751,9605856116351,831Benchmark Market Prices West Texas Intermediate crude oil (USD per barrel) 78.978.176.177.794.6102.389.595.5Light Louisiana Sweet ("LLS") crude oil (USD per barrel)80.082.279.681.1107.8118.3112.5113.2Natural gas (USD per million BTUs) 5.44.04.44.64.24.44.34.3U.S. weighted average cost of ethylene production (cents/pound) 34.326.725.228.732.633.834.333.6U.S. ethylene (cents/pound) 52.345.638.345.449.357.555.854.2U.S. polyethylene [high density] (cents/pound) 83.384.077.781.787.795.389.090.7U.S. propylene (cents/pound) 61.563.356.260.371.787.376.578.5U.S. polypropylene [homopolymer] (cents/pound) 87.889.882.786.8100.8113.8103.0105.9Olefins and Polyolefins - Europe, Asia, International Volumes (million pounds) Ethylene produced 8618429942,6979979999262,922Propylene produced 5095406361,6856086315601,799Polyethylene sold 1,2391,2301,3163,7851,3051,2791,3493,933Polypropylene sold 1,5381,7621,8915,1911,7041,6311,6384,973Benchmark Market Prices Western Europe weighted average cost of ethylene production (euro 0.01 per pound)28.727.326.527.434.735.437.335.8Western Europe ethylene (euro 0.01 per pound) 41.643.743.142.852.054.750.352.3Western Europe polyethylene [high density] (euro 0.01 per pound) 51.453.852.452.562.165.959.962.6Western Europe propylene (euro 0.01 per pound) 38.945.143.142.450.855.350.252.1Western Europe polypropylene [homopolymer] (euro 0.01 per pound) 51.360.360.357.366.669.462.066.0Intermediates and Derivatives Volumes (million pounds) Propylene oxide and derivatives 8697818722,5228387917582,387Ethylene oxide and derivatives 265250206721288277281846Styrene monomer 5897808272,1968528177142,383Acetyls 3794394051,2234394174111,267TBA Intermediates 4724704541,3964854594331,377Refining and Oxyfuels Volumes Houston Refining crude processing rate (thousands of barrels per day) 263189261237258263269263Berre Refinery crude processing rate (thousands of barrels per day) 73999990101857988MTBE/ETBE sales volumes (million gallons) 189236248673196206264661Benchmark Market MarginsLight crude oil - 2-1-1(a)6.8510.457.608.3119.0610.289.548.64Light crude oil - Maya differential(a)8.949.548.549.004.6315.5013.9915.85Urals 4-1-2-1 (USD per barrel) 5.917.335.896.327.817.718.768.10MTBE - Northwest Europe (cents per gallon) 49.346.244.346.658.992.794.181.8Source: CMAI, Bloomberg, LyondellBasell Industries(a) Prices prior to 2011 use WTI as the light crude benchmark.  Beginning in 2011, LLS is used as the light crude benchmark.Table 11 - Unaudited Income Statement InformationSuccessor2011 (Millions of U.S. dollars)Q1Q2Q3YTDSales and other operating revenues$12,252$14,042$13,297$39,591Cost of sales10,94312,47411,53834,955Selling, general and administrative expenses211247239697Research and development expenses335653142Operating income1,0651,2651,4673,797Income from equity investments587352183Interest expense, net(155)(164)(145)(464)Other income (expense), net(43)451012Income before income taxes and reorganization items9251,2191,3843,528Reorganization items(2)(28)- -(30)Income before taxes9231,1911,3843,498Provision for income taxes2633884891,140Net income 6608038952,358Less: Net loss attributable to non-controlling interests31- -4Net income attributable to the Company$663$804$895$2,362Table 11 - Unaudited Income Statement InformationPredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010 April 1 -May 1 -January 1 -May 1 -(Millions of U.S. dollars)Q1April 30June 30Q2Q3April 30September 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 expenses21791129220204308333641Research and development expenses41142337355558113Operating income3673234227459886901,4102,100Income 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 items2077,181(8)7,173(13)7,388(21)7,367Income before taxes207,1693757,5447217,1891,0968,285Provision for (benefit from) income taxes12(1,327)28(1,299)254(1,315)282(1,033)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 12 - Unaudited Cash Flow InformationSuccessor2011 (Millions of U.S. dollars) Q1Q2Q3YTDNet cash provided by operating activities $221$1,026$1,531$2,778Net cash used in investing activities (216)(435)(320)(971)Net cash provided by (used in)  financing activities 28(327)(118)(417)Table 12 - Unaudited Cash Flow InformationPredecessorSuccessorCombinedSuccessorPredecessorSuccessorCombined2010 April 1 -May 1 -January 1 -May 1 -(Millions of U.S. dollars) Q1April 30June 30Q2Q3April 30September 30YTDNet cash provided by (used in) operating activities $(373)$(552)$1,105$553$1,124$(925)$2,229$1,304Net cash used in investing activities (127)(97)(110)(207)(156)(224)(266)(490)Net cash provided by (used in) financing activities 4902,8251332,958(88)3,315453,360Table 13 - Unaudited Balance Sheet InformationPredecessorSuccessorMarch 31,June 30,September 30,December 31,March 31,June 30,September 30,(Millions of U.S. dollars)2010 2010 2010 2010 2011 2011 2011 Cash and cash equivalents$537$3,753$4,832$4,222$4,383$4,687$5,609Restricted cash- -- -- -- -- -250292Short-term investments2- -- -- -- -- -- -Accounts receivable, net3,6423,5333,8003,7474,7644,9014,038Inventories3,5904,3724,4124,8245,7265,5775,682Prepaid expenses and other current assets9321,0168859861,1001,0981,097Total current assets8,70312,67413,92913,77915,97316,51316,718Property, plant and equipment, net14,6876,8397,2167,1907,4407,5697,363Investments and long-term receivables:Investment in PO joint ventures880434447437444436422Equity investments 1,1251,5071,5821,5871,5861,6541,594Related party receivable1413141414194Other investments and long-term receivables90775467666367Goodwill- -1,0611,105595807621598Intangible assets, net1,7481,4271,4111,3601,3441,3101,237Other assets, net338257272273274290264Total assets$27,585$24,289$26,030$25,302$27,948$28,475$28,267Current maturities of long-term debt$487$8$8$4$253$2$2Short-term debt6,67555751842515049Accounts payable2,2132,5262,5622,7614,0993,9993,307Accrued liabilities1,2201,1991,5131,7051,7111,6131,505Deferred income taxes163444446319246315315Total current liabilities10,7584,7345,0474,8316,3605,9795,178Long-term debt3046,7456,7996,0365,8055,8135,782Other liabilities1,3172,0132,0862,1832,0432,1102,021Deferred income taxes2,0128671,1556561,0279471,204Liabilities subject to compromise22,058- -- -- -- -- -- -Stockholders' equity (deficit)(8,975)9,86810,88211,53512,67113,57914,025Non-controlling interests111626161424757Total liabilities and stockholders' equity (deficit)$27,585$24,289$26,030$25,302$27,948$28,475$28,267SOURCE LyondellBasell IndustriesFor further information: Media, David Harpole, +1-713-309-4125, or Investors, Doug Pike, +1-713-309-4590, both of LyondellBasell Industries