LyondellBasell reports Q3 net income of US$851M, up from US$844M a year earlier, despite revenues down 1.1% to US$11.2B; earnings down on scheduled maintenance at US site, fewer market-related opportunities in European olefins, polyolefins units, says CEO
Allison Oesterle
HOUSTON and LONDON
,
October 29, 2013
(press release)
–
Third-Quarter 2013 Highlights
Table 1 - Earnings Summary Millions of U.S. dollars (except share data) Three Months Ended Nine Months Ended September 30, September 30, 2013 June 30, 2013 September 30, 2012 2013 2012 Sales and other operating revenues $11,152 $11,103 $11,273 $32,924 $34,255 Net income(a) 851 927 844 2,678 2,211 Income from continuing operations 854 923 851 2,683 2,213 Diluted earnings per share (U.S. dollars): Net income(b) 1.50 1.61 1.46 4.66 3.83 Income from continuing operations 1.51 1.60 1.47 4.67 3.83 Diluted share count (millions) 567 578 577 575 577 EBITDA(c)(d) 1,531 1,652 1,589 4,768 4,543 (a) Includes net loss attributable to non-controlling interests and loss from discontinued operations, net of tax. See Table 11. (b) Includes diluted loss per share attributable to discontinued operations. (c) See the end of this release for an explanation of the Company's use of EBITDA and Table 9 for reconciliations of EBITDA to income from continuing operations. (d) Includes a $71 million lower of cost or market inventory valuation adjustment in the third quarter 2012 which is a reversal of a $71 million charge in the second quarter of 2012. Results also reflect the following charges and benefits: Table 2 - Charges (Benefits) Included in Income from Continuing Operations Millions of U.S. dollars (except share data) Three Months Ended Nine Months Ended September 30, 2013 June 30, 2013 September 30, 2012 September 30, 2013 2012 Pretax charges (benefits): Charges and premiums related to repayment of debt $ - - $ - - $ - - $ - - $329 Reorganization items - - - - - - - - (5) Impairments - - - - - - - - 22 Warrants - mark to market - - - - - - - - 10 Insurance settlement - - - - - - - - (100) Legal recovery - - - - (24) - - (24) Lower of cost or market inventory adjustment - - - - (71) - - - - Total pretax charges (benefits) - - - - (95) - - 232 Provision for (benefit from) income tax related to these items - - - - 35 - - (79) After-tax effect of net charges (credits) $ - - $ - - ($60) $ - - $153 Effect on diluted earnings per share $0 $0 $0.11 $0 ($0.25) Table 3 - O&P–Americas Financial Overview Three Months Ended Nine Months Ended Millions of U.S. dollars September 30, 2013 June 30, 2013 September 30, 2012 September 30, 2013 2012 Operating income $759 $872 $738 $2,452 $1,957 EBITDA 841 951 814 2,690 2,190 Table 4 - O&P–EAI Financial Overview Three Months Ended Nine Months Ended Millions of U.S. dollars September 30, 2013 June 30, 2013 September 30, 2012 September 30, 2013 2012 Operating income $78 $189 $15 $360 $221 EBITDA 204 295 102 724 522 Table 5 - I&D Financial Overview Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, Millions of U.S. dollars 2013 2013 2012 2013 2012 Operating income $371 $285 $424 $979 $1,184 EBITDA 427 338 475 1,138 1,324 Table 6 - Refining Financial Overview Millions of U.S. dollars Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2013 2013 2012 2013 2012 Operating income (loss) ($37) ($16) $114 ($70) $248 EBITDA 8 20 150 48 358 Table 7 - Technology Financial Overview Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, Millions of U.S. dollars 2013 2013 2012 2013 2012 Operating income $35 $39 $31 $124 $99 EBITDA 52 59 49 177 155 Table 8 - Reconciliation of Segment Information to Consolidated Financial Information 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 YTD Sales and other operating revenues: Olefins & Polyolefins - Americas $ 3,349 $ 3,283 $ 3,217 $ 3,085 $ 12,934 $ 3,244 $ 3,251 $ 3,315 $ 9,810 Olefins & Polyolefins - Europe, Asia, International 3,898 3,575 3,448 3,600 14,521 3,800 3,708 3,594 11,102 Intermediates & Derivatives 2,485 2,285 2,637 2,251 9,658 2,282 2,217 2,452 6,951 Refining 3,203 3,496 3,272 3,320 13,291 2,468 3,077 3,177 8,722 Technology 119 115 124 140 498 134 132 124 390 Other (1,320) (1,506) (1,425) (1,299) (5,550) (1,259) (1,282) (1,510) (4,051) Continuing Operations $ 11,734 $ 11,248 $ 11,273 $ 11,097 $ 45,352 $ 10,669 $ 11,103 $ 11,152 $ 32,924 Operating income (loss): Olefins & Polyolefins - Americas $ 519 $ 700 $ 738 $ 693 $ 2,650 $ 821 $ 872 $ 759 $ 2,452 Olefins & Polyolefins - Europe, Asia, International 3 203 15 (94) 127 93 189 78 360 Intermediates & Derivatives 370 390 424 246 1,430 323 285 371 979 Refining 10 124 114 86 334 (17) (16) (37) (70) Technology 38 30 31 23 122 50 39 35 124 Other - - 2 6 5 13 (3) (5) 1 (7) Continuing Operations $ 940 $ 1,449 $ 1,328 $ 959 $ 4,676 $ 1,267 $ 1,364 $ 1,207 $ 3,838 Depreciation and amortization: Olefins & Polyolefins - Americas $ 65 $ 71 $ 69 $ 76 $ 281 $ 75 $ 69 $ 73 $ 217 Olefins & Polyolefins - Europe, Asia, International 69 69 63 84 285 77 76 78 231 Intermediates & Derivatives 47 48 49 50 194 48 50 50 148 Refining 38 37 36 37 148 36 37 45 118 Technology 18 19 18 18 73 17 20 16 53 Other - - - - 1 1 2 - - 2 - - 2 Continuing Operations $ 237 $ 244 $ 236 $ 266 $ 983 $ 253 $ 254 $ 262 $ 769 EBITDA: (a) Olefins & Polyolefins - Americas $ 595 $ 781 $ 814 $ 778 $ 2,968 $ 898 $ 951 $ 841 $ 2,690 Olefins & Polyolefins - Europe, Asia, International 115 305 102 26 548 225 295 204 724 Intermediates & Derivatives 417 432 475 297 1,621 373 338 427 1,138 Refining 48 160 150 123 481 20 20 8 48 Technology 56 50 49 42 197 66 59 52 177 Other (4) (1) (1) (1) (7) 3 (11) (1) (9) Continuing Operations $ 1,227 $ 1,727 $ 1,589 $ 1,265 $ 5,808 $ 1,585 $ 1,652 $ 1,531 $ 4,768 Capital, turnarounds and IT deferred spending: Olefins & Polyolefins - Americas $ 102 $ 135 $ 126 $ 105 $ 468 $ 122 $ 122 $ 218 $ 462 Olefins & Polyolefins - Europe, Asia, International 60 39 60 95 254 63 46 44 153 Intermediates & Derivatives 18 24 44 73 159 106 141 119 366 Refining 38 27 24 47 136 93 67 36 196 Technology 9 8 12 14 43 7 6 7 20 Other 2 3 1 (1) 5 - - 5 (1) 4 Total 229 236 267 333 1,065 391 387 423 1,201 Deferred charges included above (1) (3) (1) - - (5) - - - - - - - - Continuing Operations $ 228 $ 233 $ 266 $ 333 $ 1,060 $ 391 $ 387 $ 423 $ 1,201 (a) See Table 9 for EBITDA calculation. Table 9 - EBITDA Calculation 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 YTD Net income attributable to the Company shareholders $ 600 $ 770 $ 846 $ 632 $ 2,848 $ 901 $ 929 $ 853 $ 2,683 Net income (loss) attributable to non-controlling interests (1) (2) (2) (9) (14) (1) (2) (2) (5) (Income) loss from discontinued operations, net of tax (5) - - 7 22 24 6 (4) 3 5 Income from continuing operations 594 768 851 645 2,858 906 923 854 2,683 Provision for income taxes 301 306 435 285 1,327 357 410 339 1,106 Depreciation and amortization 237 244 236 266 983 253 254 262 769 Interest expense, net 95 409 67 69 640 69 65 76 210 EBITDA $ 1,227 $ 1,727 $ 1,589 $ 1,265 $ 5,808 $ 1,585 $ 1,652 $ 1,531 $ 4,768 Table 10 - Selected Segment Operating Information 2012 2013 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 YTD Olefins and Polyolefins - Americas Volumes (million pounds) Ethylene produced 1,988 2,134 2,401 2,449 8,972 2,337 2,412 2,111 6,860 Propylene produced 533 615 633 582 2,363 624 529 652 1,805 Polyethylene sold 1,371 1,327 1,430 1,438 5,566 1,396 1,389 1,378 4,163 Polypropylene sold 649 634 639 576 2,498 565 637 669 1,871 Benchmark Market Prices West Texas Intermediate crude oil (USD per barrel) 103.0 93.4 92.2 88.2 94.1 94.4 94.2 105.8 98.2 Light Louisiana Sweet ("LLS") crude oil (USD per barrel) 119.9 108.2 109.4 109.5 111.7 113.9 104.6 109.9 109.4 Natural gas (USD per million BTUs) 2.7 2.3 2.9 3.5 2.9 3.5 4.2 3.7 3.8 U.S. weighted average cost of ethylene production (cents/pound) 28.5 18.4 19.7 18.6 21.2 13.8 15.7 16.6 15.4 U.S. ethylene (cents/pound) 54.9 46.9 45.4 45.7 48.3 48.0 46.3 45.8 46.7 U.S. polyethylene [high density] (cents/pound) 67.0 63.0 59.3 59.7 62.3 66.7 68.7 71.7 69.0 U.S. propylene (cents/pound) 68.7 65.7 51.3 56.0 60.4 75.0 63.3 68.3 68.9 U.S. polypropylene [homopolymer] (cents/pound) 81.2 76.7 63.8 68.5 72.5 88.0 76.2 82.3 82.2 Olefins and Polyolefins - Europe, Asia, International Volumes (million pounds) Ethylene produced 945 930 802 833 3,510 912 991 984 2,887 Propylene produced 557 561 492 502 2,112 577 610 597 1,784 Polyethylene sold 1,320 1,130 1,243 1,250 4,943 1,206 1,314 1,212 3,732 Polypropylene sold 1,614 1,433 1,727 1,623 6,397 1,657 1,821 1,612 5,090 Benchmark Market Prices (€0.01 per pound) Western Europe weighted average cost of ethylene production 45.4 31.7 39.6 38.9 38.9 36.2 29.3 34.9 33.5 Western Europe ethylene 55.1 58.6 53.1 58.1 56.2 58.6 54.4 55.0 56.0 Western Europe polyethylene [high density] 58.6 60.9 57.2 61.0 59.4 61.2 56.8 57.9 58.6 Western Europe propylene 50.1 54.1 47.6 50.8 50.7 50.6 47.9 49.6 49.4 Western Europe polypropylene [homopolymer] 57.9 60.4 56.1 58.7 58.3 59.1 56.1 58.1 57.8 Intermediates and Derivatives Volumes (million pounds) Propylene oxide and derivatives 774 743 762 663 2,942 683 665 665 2,013 Ethylene oxide and derivatives 312 275 311 260 1,158 260 277 294 831 Styrene monomer 704 678 791 782 2,955 703 589 756 2,048 Acetyls 489 444 499 406 1,838 431 470 506 1,407 TBA Intermediates 462 448 441 399 1,750 434 357 425 1,216 Volumes (million gallons) MTBE/ETBE 205 189 256 199 849 185 235 241 661 Benchmark Market Margins (cents per gallon) MTBE - Northwest Europe 125.1 122.0 149.9 76.3 118.2 104.9 88.4 86.8 93.2 Refining Volumes (thousands of barrels per day) Heavy crude oil processing rate 259 267 240 255 255 173 265 250 230 Benchmark Market Margins Light crude oil - 2-1-1 10.29 15.30 16.82 8.99 12.81 11.53 14.63 12.63 12.96 Light crude oil - Maya differential 10.81 9.12 11.94 16.45 12.01 11.17 6.95 10.59 9.51 Source: LYB and third party consultants Note: Benchmark market prices for U.S. and Western Europe polyethylene and polypropylene reflect discounted prices. Table 11 - Unaudited Income Statement Information 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 YTD Sales and other operating revenues $ 11,734 $ 11,248 $ 11,273 $ 11,097 $ 45,352 $ 10,669 $ 11,103 $ 11,152 $ 32,924 Cost of sales 10,532 9,561 9,670 9,832 39,595 9,153 9,496 9,690 28,339 Selling, general and administrative expenses 223 201 236 249 909 213 208 220 641 Research and development expenses 39 37 39 57 172 36 35 35 106 Operating income 940 1,449 1,328 959 4,676 1,267 1,364 1,207 3,838 Income from equity investments 46 27 32 38 143 59 43 61 163 Interest expense, net (95) (409) (67) (69) (640) (69) (65) (76) (210) Other income (expense), net 4 7 (7) 2 6 6 (9) 1 (2) Income before taxes 895 1,074 1,286 930 4,185 1,263 1,333 1,193 3,789 Provision for income taxes 301 306 435 285 1,327 357 410 339 1,106 Income from continuing operations 594 768 851 645 2,858 906 923 854 2,683 Income (loss) from discontinued operations, net of tax 5 - - (7) (22) (24) (6) 4 (3) (5) Net income 599 768 844 623 2,834 900 927 851 2,678 Net loss attributable to non-controlling interests 1 2 2 9 14 1 2 2 5 Net income attributable to the Company shareholders $ 600 $ 770 $ 846 $ 632 $ 2,848 $ 901 $ 929 $ 853 $ 2,683 Table 12 - Unaudited Cash Flow Information 2012 2013 (Millions of U.S. dollars) Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 YTD Net cash provided by operating activities $ 913 $ 504 $ 2,042 $ 1,328 $ 4,787 $ 799 $ 1,264 $ 1,131 $ 3,194 Net cash used in investing activities (185) (245) (266) (317) (1,013) (408) (389) (438) (1,235) Net cash provided by (used in) financing activities (140) 55 (234) (1,826) (2,145) (234) (526) 437 (323) Table 13 - Unaudited Balance Sheet Information March 31, June 30, September 30, December 31, March 31, June 30, September 30, (Millions of U.S. dollars) 2012 2012 2012 2012 2013 2013 2013 Cash and cash equivalents $ 1,670 $ 1,950 $ 3,527 $ 2,732 $ 2,879 $ 3,233 $ 4,414 Restricted cash 9 14 19 5 6 2 4 Accounts receivable, net 4,209 3,888 4,083 3,904 3,878 4,023 4,041 Inventories 5,208 5,759 5,234 5,075 5,270 5,197 5,382 Prepaid expenses and other current assets 1,002 755 532 570 622 577 784 Total current assets 12,098 12,366 13,395 12,286 12,655 13,032 14,625 Property, plant and equipment, net 7,426 7,237 7,412 7,696 7,779 7,979 8,223 Investments and long-term receivables: Investment in PO joint ventures 415 411 405 397 401 409 423 Equity investments 1,605 1,521 1,581 1,583 1,607 1,622 1,615 Other investments and long-term receivables 76 70 361 383 421 231 164 Goodwill 595 576 585 591 582 588 598 Intangible assets, net 1,149 1,103 1,073 1,038 999 966 934 Other assets, net 245 261 292 246 233 221 229 Total assets $ 23,609 $ 23,545 $ 25,104 $ 24,220 $ 24,677 $ 25,048 $ 26,811 Current maturities of long-term debt $ - - $ - - $ - - $ 1 $ 1 $ 1 $ 1 Short-term debt 42 48 47 95 115 114 114 Accounts payable 3,545 3,004 3,297 3,285 3,217 3,324 3,241 Accrued liabilities 1,049 915 1,177 1,157 1,217 1,047 1,528 Deferred income taxes 310 277 304 558 557 550 494 Total current liabilities 4,946 4,244 4,825 5,096 5,107 5,036 5,378 Long-term debt 3,984 4,305 4,305 4,304 4,307 4,306 5,774 Other liabilities 2,281 2,208 2,153 2,327 2,306 2,325 2,278 Deferred income taxes 1,035 1,245 1,460 1,314 1,277 1,312 1,472 Stockholders' equity 11,310 11,492 12,312 11,139 11,641 12,032 11,874 Non-controlling interests 53 51 49 40 39 37 35 Total liabilities and stockholders' equity $ 23,609 $ 23,545 $ 25,104 $ 24,220 $ 24,677 $ 25,048 $ 26,811
LyondellBasell Industries (NYSE: LYB) today announced earnings from continuing operations for the third quarter 2013 of $1.51 diluted earnings per share or $854 million. Third quarter 2013 EBITDA was $1,531 million.
Comparisons with the prior quarter and third quarter 2012 are shown below:
"We achieved solid third quarter results, with earnings of $1.51 per share and EBITDA of $1.53 billion," said CEO Jim Gallogly. "This performance is sequentially down from the prior quarter due to scheduled maintenance at a U.S. olefins and polyolefins site and fewer market-related opportunities in our European olefins and polyolefins business. Refining results again proved difficult, pressured by an oversupplied gasoline market, spending for RIN's and plant maintenance."
"During the quarter, we advanced our capital deployment program, purchasing shares and declaring dividends totaling $1.3 billion. Since authorization of the share repurchase program in May 2013 and through the close of the third quarter, approximately three percent of our outstanding shares have been repurchased," Gallogly said.
"Overall, we continued a pattern of steady results seen in recent quarters. Underlying this performance were safe, reliable operations coupled with the North American natural gas advantage. We are taking steps to further capitalize on this advantage. We are making significant progress on our expansion projects which will come online over the next two years. First up will be the fourth-quarter completion of the methanol restart project followed by our La Porte ethylene debottleneck expansion mid next year. We expect to see our growth projects completed significantly ahead of our competition and add to our strong earnings profile," Gallogly said.
OUTLOOK
"The fundamentals that have supported our results remained intact during October. However, we have historically seen margin compression in products such as oxyfuels in winter months and slower polyolefin sales around the holiday season," Gallogly said.
LYONDELLBASELL BUSINESS RESULTS DISCUSSION BY REPORTING SEGMENT
LyondellBasell operates in five business segments: 1) Olefins and Polyolefins – Americas; 2) Olefins and Polyolefins – Europe, Asia and International (EAI); 3) Intermediates and Derivatives; 4) Refining; and 5) Technology.
Olefins and Polyolefins - Americas (O&P-Americas) – The primary products of this segment include ethylene and its co-products (propylene, butadiene and benzene), polyethylene, polypropylene and Catalloy process resins.
Three months ended September 30, 2013 versus three months ended June 30, 2013 – EBITDA decreased $110 million versus the second quarter 2013. Compared to the prior period, olefins results decreased primarily due to a scheduled turnaround at Clinton, Iowa, a 1 cent per pound decline in ethylene contract price and higher raw material costs driven by higher propane, butane and naphtha prices in the third quarter. The Clinton turnaround impacted the quarter results by approximately $65 million. Combined polyolefin results increased from the second quarter 2013. Results benefitted from an approximately 2 cent per pound higher average polyethylene price and a 5 percent increase in polypropylene sales volumes. Joint venture equity income was relatively unchanged.
Three months ended September 30, 2013 versus three months ended September 30, 2012 – EBITDA increased $27 million in the third quarter 2013 versus the third quarter 2012. Excluding the favorable impact of a $71 million lower of cost or market adjustment in the third quarter 2012, EBITDA increased $98 million, primarily due to higher polyethylene results. Olefins results decreased approximately $45 million compared to the prior year period partially due to the scheduled Clinton turnaround. The third quarter 2013 results benefitted from increased ethane cracking at a lower cost. Polyethylene results improved as a 9 cent per pound higher price more than offset a 4 percent volume decline. Polypropylene results were relatively unchanged. Joint venture equity income was relatively unchanged.
Olefins and Polyolefins - Europe, Asia, International (O&P-EAI) – The primary products of this segment include ethylene and its co-products (propylene and butadiene), polyethylene, polypropylene, global polypropylene compounds, Catalloy process resins and polybutene-1 resins.
Three months ended September 30, 2013 versus three months ended June 30, 2013 – EBITDA decreased $91 million versus the second quarter 2013. Olefin results decreased by approximately $75 million primarily due to a decline in olefin margins driven by higher feedstock costs and lower co-product values. Improved polyethylene margins offset a 10 percent decline in overall polyolefin sales volumes. Polypropylene compounds and polybutene-1 results decreased by approximately $15 million primarily due to lower margins related to raw material price volatility and a 5 percent decline in sales volumes. Equity income from joint ventures increased by $17 million from the second quarter 2013.
Three months ended September 30, 2013 versus three months ended September 30, 2012 – EBITDA increased $102 million versus the third quarter 2012. Olefin results improved by approximately $70 million, a result of both higher margins and volumes. The higher olefin margins were driven by higher ethylene prices in the third quarter of 2013 versus the same period in 2012. Volumes were lower in the 2012 period as a result of an olefin turnaround at Wesseling, Germany. Combined polyolefin results increased by approximately $20 million primarily as a result of improved margins. Polypropylene compounds and polybutene-1 results decreased by approximately $10 million from the prior year period as a result of lower margins related to raw material pricing lag. Equity income from joint ventures increased by $25 million from the third quarter 2012.
Intermediates and Derivatives (I&D) – The primary products of this segment include propylene oxide (PO) and its co-products (styrene monomer, tertiary butyl alcohol (TBA), isobutylene and tertiary butyl hydroperoxide), and derivatives (propylene glycol, propylene glycol ethers and butanediol), acetyls, ethylene oxide and its derivatives, and oxyfuels.
Three months ended September 30, 2013 versus three months ended June 30, 2013 – EBITDA increased $89 million versus the second quarter 2013. Results for PO and PO derivatives increased by approximately $20 million following the completion of second quarter turnarounds. Competitive pressure continued to impact butanediol and solvents margins due to oversupply in Asia. Intermediate chemicals results increased by approximately $65 million driven primarily by higher styrene margins and higher sales volumes following second quarter turnarounds. Oxyfuels results improved by approximately $15 million due to higher margins and volumes. Equity income from joint ventures was relatively unchanged.
Three months ended September 30, 2013 versus three months ended September 30, 2012 – EBITDA decreased $48 million compared to the third quarter 2012. Results for PO and PO derivatives declined primarily due to weaker butanediol and solvents market conditions. Intermediate chemicals results increased as a result of higher styrene, acetyl and ethylene glycol margins. Oxyfuels results declined by approximately $60 million due to lower margins and volumes, which were stronger than typical in the third quarter of 2012. Equity income from joint ventures increased by $3 million from the third quarter 2012.
Refining – The primary products of this segment include gasoline, diesel fuel, heating oil, jet fuel, and petrochemical raw materials.
Three months ended September 30, 2013 versus three months ended June 30, 2013 – EBITDA, including benefits from property tax assessments and legal settlements of $15 million, declined $12 million versus the second quarter 2013. The Houston refinery operated at 250,000 barrels per day, down 15,000 barrels per day from the prior quarter due to maintenance work on an operating unit. The Maya 2-1-1 industry benchmark crack spread increased by $1.64 per barrel, averaging $23.22 per barrel. The refinery spread did not increase as the timing of crude purchases coupled with benchmark crude oil price volatility resulted in higher costs during the quarter. The cost of Renewable Identification Numbers (RINs) to meet U.S. renewable fuel standards decreased by $12 million versus the second quarter 2013.
Three months ended September 30, 2013 versus three months ended September 30, 2012 – EBITDA decreased $142 million versus the third quarter 2012. Excluding the benefit of legal restitutions in both periods and the resolution of property tax assessments in third quarter 2013, EBITDA decreased by $133 million. The 250,000 barrels per day operating rate in the current quarter represents an increase of 10,000 barrels per day from the prior year period. Compared to the third quarter 2012, the decline in Maya 2-1-1 benchmark spread of $5.54 per barrel and higher natural gas costs negatively impacted results by approximately $110 million. The cost of RINs increased by $28 million compared to the same quarter last year.
Technology – The principal products of the Technology segment include polyolefin catalysts and production process technology licenses and related services.
Three months ended September 30, 2013 versus three months ended June 30, 2013 – EBITDA decreased by $7 million primarily as a result of lower licensing revenues.
Three months ended September 30, 2013 versus three months ended September 30, 2012 – EBITDA increased by $3 million as higher catalyst sales and lower research and development costs more than offset lower licensing revenues versus the third quarter 2012.
Capital spending and cash balances
Capital expenditures, including growth projects, maintenance turnarounds, catalyst and information technology-related expenditures, were $423 million in the third quarter 2013. The cash balance was $4.4 billion at Sept. 30, 2013. We repurchased 13.5 million ordinary shares during the third quarter 2013. Dividends declared in the quarter totaled $280 million. In July, the company issued long-term bonds in an aggregate principal amount of $1.5 billion with an average interest rate of 4.6 percent.
CONFERENCE CALL
LyondellBasell will host a conference call Oct. 29 at 11 a.m. ET. Participants on the call will include Chief Executive Officer Jim Gallogly, Executive Vice President and Chief Financial Officer Karyn Ovelmen, Senior Vice President - Strategic Planning and Transactions Sergey Vasnetsov, and Vice President of Investor Relations Doug Pike.
The toll-free dial-in number in the U.S. is 877-950-3594. A complete listing of toll-free numbers by country is available at www.lyondell.com/teleconference for international callers. The pass code for all numbers is 1231245.
A replay of the call will be available from 2 p.m. ET Oct. 29 until Nov. 29 at 11 p.m. ET. The replay dial-in numbers are 888-667-5779 (U.S.) and +1 402-220-6423 (international). The pass code for each is 5421.
The slides that accompany the call will be available at http://www.lyondellbasell.com/earnings.
ABOUT LYONDELLBASELL
LyondellBasell (NYSE: LYB) is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell (www.lyondellbasell.com) manufactures products at 58 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels.
FORWARD-LOOKING STATEMENTS
The statements in this release and the related teleconference relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially based on factors including, but not limited to, the business cyclicality of the chemical, polymers and refining industries; the availability, cost and price volatility of raw materials and utilities, particularly the cost of oil, natural gas, and associated natural gas liquids; competitive product and pricing pressures; labor conditions; our ability to attract and retain key personnel; operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failure, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental risks); the supply/demand balances for our and our joint ventures' products, and the related effects of industry production capacities and operating rates; our ability to achieve expected cost savings and other synergies; legal and environmental proceedings; tax rulings, consequences or proceedings; technological developments, and our ability to develop new products and process technologies; potential governmental regulatory actions; political unrest and terrorist acts; risks and uncertainties posed by international operations, including foreign currency fluctuations; and our ability to comply with debt covenants and service our debt. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2012, which can be found at www.lyondellbasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov.
NON-GAAP MEASURES
This release makes reference to certain "non-GAAP" financial measures, such as EBITDA, 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, such as EBITDA, 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.
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. We calculate EBITDA as income from continuing operations plus interest expense (net), provision for (benefit from) income taxes, and depreciation & amortization. EBITDA should not be considered an alternative to profit or operating profit for any period as an indicator of our performance, or as alternative to operating cash flows as a measure of our liquidity.
Quantitative reconciliations of EBITDA to net income, the most comparable GAAP measure, are provided in Table 9 at the end of this release.
OTHER FINANCIAL MEASURE PRESENTATION NOTES
This release contains time sensitive information that is accurate only as of the time hereof. Information contained in this release is unaudited and subject to change. LyondellBasell undertakes no obligation to update the information presented herein except to the extent required by law.
SOURCE LyondellBasell Industries
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