0001489393lyb:NonReportableGeographicalComponentsMember2022-12-31
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

Mark One)
☑
☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

2022

OR

☐
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                         to                         

Commission file number: 001-34726

LyondellBasell Industries N.V.

(Exact name of registrant as specified in its charter)

The Netherlands98-0646235

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Netherlands

98-0646235
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
1221 McKinney St.,

Suite 300

Houston, Texas

USA 77010

4th4th Floor, One Vine Street

Suite 300London

Delftseplein 27E
Houston,TexasW1J0AH

The

3013AARotterdam
USA77010United Kingdom

Delftseplein 27E

3013 AA Rotterdam

The Netherlands

(Address of principal executive offices) (Zip Code)

(713) 309-7200+44 (0) 207 220 2600+31 (0)10 275 5500

(713)309-7200+44 (0)207220 2600+31 (0)102755 500

(Registrant’s telephone numbers, including area codes)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange On Which Registered

Ordinary Shares, €0.04 Par ValueLYBNew York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ☑þ  Yes    ☐¨  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    ☐¨  Yes     ☑þ  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☑þ  Yes    ☐¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ☑þ  Yes    ☐¨  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer☑☑Accelerated filer☐☐
Non-accelerated filer☐☐  (Do not check if a smaller reporting company)Smaller reporting company☐Emerging growth company☐
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ☐  Yes    ☑  No

The aggregate market value of common stock held by non-affiliates of the registrant on June 30, 2017,2022, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $84.39,$87.46, was $27.3$22.4 billion. For purposes of this disclosure, in addition to the registrant’s executive officers and members of its Supervisory Board of Directors, the registrant has included Access Industries, LLC and its affiliates as “affiliates.”

The registrant had 394,556,328325,992,173 shares outstanding at February 20, 201821, 2023 (excluding 183,883,83514,430,325 treasury shares).

Documents incorporated by reference:

Portions of the Notice of the 2018 Annual Meeting of Shareholders and 20182023 Proxy Statement, in connection with the Company’s 20182023 Annual Meeting of Shareholders (in Part III), as indicated herein.

PART I

Table of Contents

1 and 2. Business and Properties

3

Overview

3

Segments

3

Olefins and Polyolefins Segments Generally

4

Olefins and Polyolefins—Americas Segment

4

Olefins and Polyolefins—Europe, Asia, International Segment

6

Intermediates and Derivatives Segment

7

Refining Segment

10

Technology Segment

11

General

11

Intellectual Property

11

Environmental

12

Employee Relations

12

Executive Officers of the Registrant

13

Description of Properties

15

Website Access to SEC Reports

16

1A. Risk Factors

16Page

1B. Unresolved Staff CommentsCautionary statement for the purposes of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995

27

3. Legal Proceedings2

27

4. Mine Safety Disclosures

27
PART III

4
21
33
33
34
PART II
28
35

31
36

33
37

57
55

61
57

141
130

141
130

130
141
130
PART III

PART III

142
131

142
131

142
131

142
131

142
131
PART IV

PART IV

143
132

147
137

148
138



Table of Contents
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). You can identify our forward-looking statements by the words “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions.

We based forward-looking statements on our current expectations, estimates and projections of our business and the industries in which we operate. We caution you that these statements are not guarantees of future performance. They involve assumptions about future events that, while made in good faith, may prove to be incorrect and involve risks and uncertainties we cannot predict. Our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

•the cost of raw materials represents a substantial portion of our operating expenses and energy costs generally follow price trends of crude oil, natural gas liquids and/or natural gas; price volatility can significantly affect our results of operations and we may be unable to pass raw material and energy cost increases on to our customers due to the significant competition that we face, the commodity nature of our products and the time required to implement pricing changes;

•our operations in the United States (“U.S.”) have benefited fromlow-cost natural gas and natural gas liquids; decreased availability of these materials (for example, from their export or regulations impacting hydraulic fracturing in the U.S.) could reduce the current benefits we receive;

•if crude oil prices fall materially, or decreaseare low relative to U.S. natural gas prices, we wouldcould see less benefit fromlow-cost natural gas and natural gas liquids and it could have a negative effect on our results of operations;

•industry production capacities and operating rates may lead to periods of oversupply and low profitability; for example, substantial capacity expansions are underway in the U.S. olefins industry;

•we may face unplanned operating interruptions (including leaks, explosions, fires, weather-related incidents, mechanical failures, unscheduled downtime, supplier disruptions, labor shortages, strikes, work stoppages or other labor difficulties, transportation interruptions, spills and releases and other environmental incidents) at any of our facilities, which would negatively impact our operating results; for example, because the Houston refinery is our only refining operation, we would not have the ability to increase production elsewhere to mitigate the impact of any outage at that facility;

•changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate could increase our costs, restrict our operations and reduce our operating results;

•our ability to execute our organic growth plans may be negatively affected by our ability to complete projects on time and on budget;

•our ability to acquire or dispose of product lines or businesses could disrupt our business and harm our financial condition;

•uncertainties associated with worldwide economies could create reductions in demand and pricing, as well as increased counterparty risks, which could reduce liquidity or cause financial losses resulting from counterparty default;

•uncertainties related to the extent of the COVID-19 pandemic due to local or regional spread of the virus;

•the negative outcome of any legal, tax and environmental proceedings or changes in laws or regulations regarding legal, tax and environmental matters may increase our costs, reduce demand for our products, or otherwise limit our ability to achieve savings under current regulations;

•any loss ornon-renewal of favorable tax treatment under tax agreements or tax treaties, or changes in tax laws, regulations or treaties, may substantially increase our tax liabilities;

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•we may be required to reduce production or idle certain facilities because of the cyclical and volatile nature of the supply-demand balance in the chemical and refining industries, which would negatively affect our operating results;

•we rely on continuing technological innovation, and an inability to protect our technology, or others’ technological developments, could negatively impact our competitive position;

•we have significant international operations, and fluctuations in exchange rates, valuations of currencies and our possible inability to access cash from operations in certain jurisdictions on atax-efficient basis, if at all, could negatively affect our liquidity and our results of operations;

•we are subject to the risks of doing business at a global level, including wars, terrorist activities, political and economic instability and disruptions and changes in governmental policies, which could cause increased expenses, decreased demand or prices for our products and/or disruptions in operations, all of which could reduce our operating results;

•if we are unable to achieve our emission reduction, circularity, or other sustainability targets, it could result in reputational harm, changing investor sentiment regarding investment in our stock or a negative impact on our access to and cost of capital;

•if we are unable to comply with the terms of our credit facilities, indebtedness and other financing arrangements, those obligations could be accelerated, which we may not be able to repay; and

•we may be unable to incur additional indebtedness or obtain financing on terms that we deem acceptable, including for refinancing of our current obligations; higher interest rates and costs of financing would increase our expenses.

Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Our management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels.

All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section and any other cautionary statements that may accompany such forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements. 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 this report on page 16.

report.

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PART I

Items 1 and 2. Business and Properties

Properties.

OVERVIEW

LyondellBasell Industries N.V. is a global, independent chemical company and was incorporated, as a Naamloze Vennootschap, under Dutch law on October 15, 2009. Unless otherwise indicated, the “Company,” “we,” “our,” “us” and “LyondellBasell” are used in this report to refer to the businesses of LyondellBasell Industries N.V. and its consolidated subsidiaries. We are one of the world’s top independent chemical companies based on revenues.

We participate globally across the petrochemical value chain and are an industry leader in many of our product lines. Our chemicals businesses consist primarily of large processing plants that convert large volumes of liquid and gaseous hydrocarbon feedstocks into plastic resins and other chemicals. Our chemical products tend to be basic building blocks for other chemicals and plastics, while ourplastics. Our plastic products are typically used in large volumevolumes as well as smaller specialty applications. Our customers use our plastics and chemicals to manufacture a wide range of products that people use in their everyday lives including food packaging, home furnishings, automotive components, paints and coatings. Our refining business consists of our Houston refinery, which processes crude oil into refined products such as gasoline diesel and jet fuel.

distillates. We also develop and license chemical and polyolefin process technologies and manufacture and sell polyolefin catalysts.

Our financial performance is influenced by the supply and demand for our products, the cost and availability of feedstocks and commodity products, global and regional production capacity, our operational efficiency and our ability to control costs. We have a strong operational focus and, as a producer of large volume commodities, continuously strive to differentiate ourselves through safe, reliable andlow-cost operations in all our businesses. We purchase large quantities of natural gas, electricity and steam which we use as energy to fuel our facilities. We alsofacilities and purchase large quantities of natural gas liquids and crude oil derivatives which we use as feedstocks. During recent years theThe relatively low cost of naturalgas-derived raw materials in the U.S. versus the global cost of crudeoil-derived raw materials has had a significant positive influence on the profitability of our North American operations. While lower oil prices have reduced the North American feedstock advantage, improved product supply and demand fundamentals in several businesses, notably global polyolefins products, have partially offset the decline.

SEGMENTS

We manage our operations through fivesix operating segments. Our reportable segments are:

•

Olefins and Polyolefins—Americas (“O&P—Americas”). Our O&P—Americas segment produces and markets olefins andco-products, polyethylene and polypropylene.

•

Olefins and Polyolefins—Europe, Asia, International (“O&P—EAI”). Our O&P—EAI segment produces and markets olefins andco-products, polyethylene, and polypropylene, including polypropylene compounds.

•

Intermediates and Derivatives (“I&D”). Our I&D segment produces and markets propylene oxide and its derivatives, oxyfuels and related products and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.

•

Refining. Our Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products including gasoline and distillates.

•

Technology. Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

•Olefins and Polyolefins-Americas (“O&P-Americas”). Our O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.
•Olefins and Polyolefins-Europe, Asia, International (“O&P-EAI”). Our O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene.
•Intermediates and Derivatives (“I&D”). Our I&D segment produces and markets propylene oxide and its derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.
•Advanced Polymer Solutions (“APS”). Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes Catalloy and polybutene-1.
•Refining. Our Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products, including gasoline and distillates.
•Technology. Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
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Financial information about our business segments and geographical areas can be found in Note 21,Segment and Related Information,20 to the Consolidated Financial Statements. Information about the locations where we produce our primary products can be found under “Description of Properties.”

In 2017, 2016 and 2015, no No single customer accounted for 10% or more of our total revenues.

revenues in 2022, 2021 or 2020.

Olefins and Polyolefins Segments Generally

We are one of the leading worldwide producers of olefins and polyethylene (“PE”) and we are the world’s second largest producer of polypropylene (“PP”). We manage our olefin and polyolefin business in two reportable segments, O&P—Americas&P-Americas and O&P—EAI.

&P-EAI.

Olefins &Co-products—Ethylene is the most significant petrochemical in terms of worldwide production volume and is the key building block for PE and many other chemicals and plastics. Ethylene is produced by steam cracking hydrocarbons such as ethane, propane, butane and naphtha. This production results inco-products such as aromatics and other olefins, including propylene and butadiene. Ethylene and itsco-products are fundamental to many parts of the economy, including the production of consumer products, packaging, housing and automotive components and other durable and nondurable goods.

Olefins & co-products sales accounted for approximately 9%, 11% and 9% of our consolidated revenues in 2022, 2021 and 2020.

Polyolefins—Polyolefins such as PE and PP are polymers derived from olefins including ethylene and propylene. Polyolefins are the most widely used thermoplastics in the world and are found in applications and products that enhance the everyday quality of life. Our products are used in consumer, automotive and industrial applications ranging from food and beverage packaging to housewares and construction materials.

Polyethylene—We produce high density polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear low densitylow-density polyethylene (“LLDPE”). PE sales accounted for approximately 21%19%, 24%22% and 21% of our totalconsolidated revenues in 2017, 20162022, 2021 and 2015,2020, respectively.

Polypropylene—We produce PP homopolymers and copolymers. PP compounds are produced from blends of polyolefins and additives and are sold mainly to the automotive and home appliances industries. PP sales accounted for approximately 13%, 17% and 16% of our totalconsolidated revenues in 2017, 20162022, 2021 and 2015.

2020, respectively.

Olefins and Polyolefins—AmericasPolyolefins-Americas Segment

Overview

—Our O&P—Americas&P-Americas segment produces and markets olefins andco-products, polyethylene and polypropylene.

Sales & Marketing / Customers

—Most of the ethylene we produce is consumed internally as a raw material in the production of PE and other derivatives, with the balance sold to third party customers, primarily under multi-year contracts. In 2016 and 2017, we added a total of 880 million pounds of ethylene capacity at our facilities in North America.

We use all the propylene we produce in the production of PP, propylene oxide and other derivatives of those products. As a result, weWe also purchase propylene from third parties. In addition to purchases of propylene, we purchase ethylene for resale, when necessary, to satisfy customer demand above our own production levels. Volumes of any of these products purchased for resale can vary significantly from period to period and are typically most significant during extended outages of our own production, such as during planned maintenance. However, purchased volumes have not historically had a significant impact on profits, except to the extent that they replace our lower-cost production.

We also consume PP in our PP compounding business, which is included in our APS segment.

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Most of the ethylene and propylene production from our Channelview, Corpus Christi and La Porte, Texas facilities is shipped via a pipeline system, which has connections to numerous U.S. Gulf Coast consumers. This pipeline system extends from Corpus Christi to Mont Belvieu, Texas. In addition, exchange agreements with other

ethylene andco-products producers allow access to customers who are not directly connected to this pipeline system. Some ethylene is shipped by railcar from our Clinton, Iowa facility to our Morris, Illinois facility and some is shipped directly to customers. Propylene from Clinton and Morris is generally shipped by marine vessel, barge, railcar or truck.

Our PP and PE production is typically sold through our sales organization to an extensive base of established customers and distributors servicing both the domestic and export markets either under annual contracts or on a spot basis. We have sales offices in various locations in North America and our polyolefins are primarily are transported in North America by railcar or truck. Export sales are primarily to customers in Latin America, with sales to Asia expected to increase in the coming years as global supply and demand balances shift. We also consume PP in our PP compounds business, which is managed worldwide by our O&P—EAI segment.

Joint Venture Relationships

—We have a 50% interest in Louisiana Integrated PolyEthylene JV LLC (“Louisiana Joint Venture”) which provides us with capacity of approximately 770 thousand tons of ethylene and 445 thousand tons of low density and linear-low density PE production per year. We operate the joint venture assets and market the polyethylene off-take for all partners through our global sales team. We also participate in a joint venture in Mexico, which provides us with capacity forof approximately 640 million pounds290 thousand tons of PP production. The capacity is based on our percentage ownership of the joint venture’s total capacity.production per year. We do not hold a majority interest in or have operational control of this joint venture.

The capacities are based on our percentage ownership of the joint venture’s total capacity.
Raw Materials

—Raw material cost is the largest component of the total cost to produce ethylene and itsco-products. The primary raw materials used in our Americas olefin facilities are heavy liquids and natural gas liquids (“NGLs”). and heavy liquids. Heavy liquids include crudeoil-based naphtha and other refined products, as well as condensate, a very light crude oil resulting from natural gas production. NGLs include ethane, propane and butane. The use of heavy liquid raw materials results in the production of significant volumes ofco-products such as propylene, butadiene and benzene, as well as gasoline blending components, while the use of NGLs results in the production of a smaller volume offewer co-products.

Our ability to pass on raw material price increases to our customers is dependent on market-driven demand for olefins and polyolefins. Sales prices for products sold in the spot market are determined by market forces. Our contract prices are influenced by product supply and demand conditions, spot prices, indices published in industry publications and, in some instances, cost recovery formulas.

Prior to 2010, olefins facilities using heavy liquids as feedstock generated higher margins than those using NGLs. However, technological

Technological advances for extracting shale-based oil and gas have led to an increased supply of NGLs, providing a cost advantage over heavy liquids, particularly in the U.S. With reductions in oil prices since 2014, the cost advantage has declined, but is still significant. A plant’s flexibility to consume a wide range of raw materials generally will provideprovides an advantage over plants that are restricted in their processing capabilities. Our Americas’Americas facilities can process significant quantities of either heavy liquids or NGLs. We estimate that in the U.S. we can produce up to approximately 90% of our total ethylene output using NGLs. Changes in the raw material feedstock mix utilized in the production process will result in variances in production capacities among products. We believe our raw material flexibility in the U.S. is a key advantage in our production of ethylene and itsco-products.

Industry Dynamics / Competition

—With respect to olefins and polyolefins, competition is based on price and, to a lesser extent, on product quality, product delivery, reliability of supply, product performance and customer service. Industry consolidation in North America has led to fewer, although larger, competitors. Profitability is affected not only by supply and demand for olefins and polyolefins, but also by raw material costs and price competition among producers, which may intensify due to, among other things, the addition of new capacity. In general, demand is a function of worldwide economic growth, including the regional dynamics that underlie global growth trends.

We compete in North America with other large marketers and producers, including global chemical companies, chemical divisions of large oil companies and regional marketers and producers.

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Based on published capacity data and including our proportionate share of joint ventures, we believe as of December 31, 20172022, we were:

•the secondthird largest producer of ethylene in North America, with ethylene capacity of 11.8 billion pounds6.2 million tons per year;

•the third largest producer of PE in North America with 6.4 billion poundscapacity of 4.1 million tons per year of capacity;year; and

•the second largest producer of PP in North America, with 3.9 billion pounds,capacity of 1.9 million tons per year, including approximately 280 thousand tons of Catalloy capacity reported within our share of our Mexican joint venture capacity.

Advanced Polymer Solutions segment.

Olefins and Polyolefins—Europe,Polyolefins-Europe, Asia, International Segment

Overview

—Our O&P—EAI&P-EAI segment produces and markets olefins andco-products, polyethylene and polypropylene, including PP compounds.

polypropylene.

Sales & Marketing / Customers

—Our ethylene production is primarily consumed internally as a raw material in the production of polyolefins, and we purchase additional ethylene as needed to meet our production needs. Our propylene production is used as a raw material in the production of PP and propylene oxide and derivatives of those products, and we regularly purchase propylene from third parties because our internal needs exceed our internal production.

With respect to PP and PE, our production is typically sold through our sales organization to an extensive base of established customers under annual contracts or on a spot basis and is also sold through distributors. Our polyolefins are primarily transported in Europe by railcar or truck.

Our regional sales offices are in various locations, including The Netherlands, Hong Kong, China, India Australia and the United Arab Emirates. We also operate through a worldwide network of local sales and representative offices in Europe Asia and Africa.Asia. Our joint ventures described below typically manage their domestic sales and marketing efforts independently, and we typically operate as their agent/distributoragent for all or a portion of their exports.

Joint Venture Relationships

—We participate in several manufacturing joint ventures in Saudi Arabia, China, Poland, South Korea, Thailand Poland, Australia and South Korea.The Netherlands. We do not hold majority interests in any of these joint ventures, nor do we have operational control. These joint ventures provide us with additional annual production capacity of approximately 2.4 billion pounds1.6 million tons of PP, approximately 1.4 billion pounds1.2 million tons of olefins approximately 0.9 billion pounds of PE and approximately 100 million pounds770 thousand tons of PP compounds.PE. These capacities are based on our percentage ownership interest in the joint ventures’ total capacities. We realize profits or losses from these ventures as income or loss on the equity basis

Our 50% joint venture in Quality Circular Polymers (“QCP”), located in The Netherlands, uses mechanical recycling to transform post-consumer plastic waste into high-quality polymers that can be used to make new products. The QCP plants, located in The Netherlands and Belgium, are capable of accounting.

converting consumer waste into 55 thousand tons of recycled polypropylene and recycled high-density polyethylene annually.

We generally license our polyolefin process technologies and supply catalysts to our joint ventures through our Technology segment. Some of our joint ventures are able to source cost advantaged raw materials from their local shareholders.

Raw Materials

—Raw material cost is the largest component of the total cost for the production of olefins andco-products. The primary raw material used in our European olefin facilities is naphtha; however, we also have the capability to displace up to half of our European assets naphtha needs with other feedstocks, such as liquified petroleum gases. We have flexibility to vary the raw material mix and process conditions in recent years we have sourced increased amounts of advantaged NGLs when the opportunity arises. For our Saudi joint venture facilities, locally sourcedplants in order to maximize profitability as market prices for both feedstocks and cost advantaged NGLs, including ethane, propane and butane are used. products change.

The principal raw materials used in the production of polyolefins are propylene and ethylene. In Europe, we have the capacity to produce approximately 50%60% of the propylene requirements for our European PP production and all of the ethylene requirements for our European PE production. Propylene and ethylene requirements that are not produced internally are generally acquired pursuant to long-term contracts with third party suppliers or via spot purchases.

Our PP compounds facilities receive the majority

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Table of their PP raw materials from one of our wholly owned or joint venture facilities. Some of our joint ventures receive propylene and ethylene from their local shareholders under long-term contracts.

Contents

Our ability to pass through the increased cost of raw materials to customers is dependent on global market demand for olefins and polyolefins. In general, the pricing for purchases and sales of most products is determined by global market forces, including the impacts of foreign exchange rates relative to the pricing of the underlying naphtha raw materials, most of which are priced in U.S. dollars. There can be a lag between naphtha raw material price changes and contract product price changes that will cause volatility in our product margins.

Industry Dynamics / Competition

—With respect to olefins and polyolefins, competition is based on price, product quality, product delivery, reliability of supply, product performance and customer service. We compete with regional and multinational chemical companies and divisions of large oil companies. The petrochemical market in the European Union (“EU”) has been affected by the price volatility of naphtha, the primary feedstock for olefins in the region, as well as fluctuating demand as a result of changing European and global economic conditions.

region.

Based on published capacity data and including our proportionate share of our joint ventures, we believe as of December 31, 20172022, we were:

•the fifth largest producer of ethylene in Europe with an ethylene capacity of 1.9 million tons per year;

•the largest producer of PE in Europe with 2.1 million tons per year of 4.3 billion pounds per year;

capacity; and

•the largest producer of PP in Europe with 5.7 billion pounds2.7 million tons per year of capacity, including approximately 280 thousand tons of Catalloy capacity reported within our share of the Poland joint venture; and

Advanced Polymer Solutions segment.

the largest producer of PE in Europe with 4.8 billion pounds per year of capacity, including our share of the Poland joint venture.

Intermediates and Derivatives Segment

Overview

—Our I&D segment produces and markets propylene oxide (“PO”) and its derivatives, oxyfuels and related products, and intermediate chemicals such as styrene monomer (“SM”), acetyls, and ethylene oxides and derivatives.

PO and Derivatives—We produce PO through two distinct technologies, one of which yields tertiary butyl alcohol (“TBA”) as theco-product and the other of which yields SM as theco-product. The two technologies are mutually exclusive with dedicated assets for manufacturing either PO/TBA or PO/SM. PO is an intermediate commodity chemical and is a precursor of polyols, propylene glycol, propylene glycol ethers and butanediol. PO

and derivatives are used in a variety of durable and consumable items with key applications such as urethane foamspolyurethanes used for insulation, automotive/furniture cushioning, coatings, surfactants, synthetic resins and several other household usages.

We constructed a world-scale PO/TBA plant in Houston, Texas with start-up activities on track for the first quarter of 2023, for a total cost of approximately $3.7 billion. This plant has the capacity to produce 470 thousand tons of PO and 1.0 million tons of TBA per year.

Oxyfuels and Related Products—We produce two distinct ether-based oxyfuels, methyl tertiary butyl ether (“MTBE”) and ethyl tertiary butyl ether (“ETBE”). These oxyfuels are produced by converting the TBAco-product of PO into isobutylene and reacting with methanol or ethanol to produce either MTBE or ETBE. Both are used as high-octane gasoline components that help gasoline burn cleaner and reduce automobile emissions. Other TBA derivatives, which we refer to as “C4 chemicals,” are largely used to make synthetic rubber and other gasoline additives.

Intermediate Chemicals—We produce other commodity chemicals that utilize ethylene as a key component feedstock, including SM, acetyls and ethylene oxide derivatives. SM is utilized in various applications such as plastics, expandable polystyrene for packaging, foam cups and containers, insulation products and durables and engineering resins. Our acetyls products comprise methanol, glacial acetic acid (“GAA”) and vinyl acetate monomer (“VAM”). Natural gas (methane) is the feedstock for methanol, some of which is converted to GAA, and a portion of the GAA is reacted with ethylene to create VAM. VAM is an intermediate chemical used in fabric or wood treatments, pigments, coatings, films and adhesives. Ethylene oxide is an intermediate chemical that is used to produce ethylene glycol, glycol ethers and other derivatives. Ethylene oxide and its derivatives are used in the production of polyester, antifreeze fluids, solvents and other chemical products.

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Sales & Marketing / Customers

—We sell our PO and derivatives through multi-year sales and processing agreements as well as spot sales. Some of our contract sales agreements have cost plus pricing terms. PO and derivatives are transported by barge, marine vessel, pipeline, railcar and tank truck.

We sell our oxyfuels and related products under market and cost-based sales agreements and in the spot market. Oxyfuels are transported by barge, marine vessel and tank truck and are used as octane blending components worldwide outside of the United StatesU.S. due to their blending characteristics and emission benefits. C4 chemicals, such as high-purity isobutylene, are sold to producers of synthetic rubber and other chemical products primarily in the United StatesU.S. and Europe, and are transported by railcar, tank truck, pipeline and marine shipments.

The sales of oxyfuels and related products accounted for approximately 11% of our consolidated revenues in 2022 and 8% of consolidated revenues in each of 2021 and 2020.

Intermediate chemicals are shipped by barge, marine vessel, pipeline, railcar and tank truck. SM is sold globally into regions such as North America, Europe, Asia and South America export markets through spot sales and commercial contracts. Within acetyls, methanol is consumed internally to make GAA, used as a feedstock for oxyfuels and related products and also sold directly into the merchant commercial market. GAA is converted with ethylene to produce VAM which is sold worldwide under multi-year commercial contracts and on a spot basis.

Sales of our PO and derivatives, oxyfuels and related products, and intermediate chemicals are made by our marketing and sales personnel, and also through distributors and independent agents in the Americas, Europe, the Middle East, Africa and the Asia PacificAsia-Pacific region.

Joint Venture Relationships

—We have two PO joint ventures with Covestro AG, one in the U.S. and one in Europe. We operate four of the U.S. POall production facilities for the PO joint ventures. Covestro’s interest in the U.S. PO joint venture. Covestro’s interestventures represents ownership of anin-kind portion of the PO production of 1.5 billion pounds680 thousand tons per year. We take,in-kind, the remaining PO production and allco-product production. The parties’ rights in the joint venture are based onoff-take volumes related to actual production of PO as opposed to ownership percentages. Covestro also has the right to 50% of the

PO and SM production of our European PO joint venture. Our proportional production capacity provided through this venture is approximately 340 million pounds160 thousand tons of PO and approximately 750 million pounds340 thousand tons of SM. We do not share marketing or product sales with Covestro under either of these PO joint ventures.

We also have two joint venture manufacturing relationships in China. These ventures provideChina with China Petroleum & Chemical Corporation (“Sinopec”). The first joint venture provides us with additional production capacity of approximately 115 million pounds50 thousand tons of PO. ThisPO per year. The second joint venture, which began production in January 2022, provides us with annual production capacity isof approximately 140 thousand tons of PO and 300 thousand tons of SM. These capacities are based on our operational share of the joint ventures’ total capacities.

We market our share of the joint ventures production in the Chinese market.

Raw Materials

—The cost of raw materials is the largest component of total production cost for PO, itsco-products and its derivatives. Propylene, isobutane or mixed butane, ethylene and benzene are the primary raw materials used in the production of PO and itsco-products. The market prices of these raw materials historically have been related to the price of crude oil, NGLs and natural gas, as well as supply and demand for the raw materials.

In the U.S., we obtain a large portion of our propylene, benzene and ethylene raw materials needed for the production of PO and itsco-products from our O&P—Americas&P-Americas segment and to a lesser extent from third parties. Raw materials for thenon-U.S. production of PO and itsco-products are obtained from our O&P—EAI&P-EAI segment and from third parties. We consume a significant portion of our internally-producedinternally produced PO in the production of PO derivatives.

The raw material requirements not sourced internally are purchased at market-based prices from numerous suppliers in the U.S. and Europe with which we have established contractual relationships, as well as in the spot market.

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For the production of oxyfuels, we purchase our ethanol feedstock requirements from third parties, and obtain our methanol from both internal production and external sources. Carbon monoxide and methanol are the primary raw materials required for the production of GAA. We purchasesource carbon monoxide pursuant to a long-term contract with pricing primarily based on the cost of production.from internal production, which can be complemented by purchases from external sources as needed. The methanol required for our downstream production of acetyls is internally sourced from a partnership and from our methanol plant atplants in La Porte, Texas, and Channelview, Texas. Natural gas is the primary raw material required for the production of methanol.

In addition to ethylene, acetic acid is a primary raw material for the production of VAM. We obtain all our requirements for acetic acid and ethylene from our internal production. Historically, we have used a large percentage of our acetic acid production to produce VAM.

Industry Dynamics / Competition

—With respect to product competition, the market is influenced and based on a variety of factors, including product quality, price, reliability of supply, technical support, customer service and potential substitute materials. Profitability is affected by the worldwide level of demand along with price competition, which may intensify due to, among other things, new industry capacity and industry outages. Demand growth could be impacted by further development of alternativebio-based methodologies. Our major worldwide competitors include other multinational chemical and refining companies as well as some regional marketers and producers.

Based on published capacity data excludingand including our partners’ sharesproportionate share of our joint venture capacity,ventures, we believe as of December 31, 20172022, we were:

•the second largest producer of PO worldwide; and

•the second largest producer of oxyfuels worldwide.

Advanced Polymer Solutions Segment
Overview—Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, colors and powders, engineered composites and advanced polymers, which include Catalloy and polybutene-1 polyolefin resins. In the first quarter of 2023, our Catalloy and polybutene-1 products, previously reflected in our APS segment, will be transferred to and reflected in our O&P-Americas and O&P-EAI segments.
Compounding and Solutions—Our polypropylene compounds are produced from blends of polyolefins and additives and are largely focused on automotive applications. Engineered plastics and engineered composites add value for more specialized high-performance applications used across a variety of industries. Masterbatches are compounds that provide differentiated properties when combined with commodity plastics used in packaging, agriculture and durable goods applications. Specialty powders are largely used to mold toys, industrial tanks and sporting goods such as kayaks. Performance colors provide powdered, pelletized and liquid color concentrates for the plastics industry.
Advanced Polymers—Catalloy and polybutene-1 are unique polymers that can be used within the segment for downstream compounding or can be sold as raw materials to third parties. Catalloy is a line of differentiated propylene-based polymers that add value in packaging applications and construction materials such as the white membranes used in the commercial roofing market. Polybutene-1 is used in both specialty piping and packaging applications.
Sales & Marketing / Customers—Our products are sold through our global sales organization to a broad base of established customers and distributors. These products are transported to our customers primarily by either truck or bulk rail. The sales of compounding and solutions products accounted for approximately 8%, 9% and 12% of our consolidated revenues in 2022, 2021 and 2020, respectively.
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Joint Venture Relationships—We participate in several manufacturing joint ventures in Saudi Arabia, Indonesia and Thailand. We hold majority interests and have operational control of the joint ventures in Indonesia. We do not hold majority interests in any of the remaining joint ventures, nor do we have operational control. These ventures provide us with additional production capacity of approximately 70 thousand tons of compounding and solutions. These capacities are based on our percentage ownership interest in the joint ventures’ total capacities.
Raw Materials—The principal materials used in the production of our compounding and solutions products are polypropylene, polyethylene, polystyrene, nylon and titanium dioxide. Raw materials required for the production of our compounding and solutions products are obtained from our wholly owned or joint venture facilities and from a number of major plastic resin producers or other suppliers at market-based prices.
The principal raw materials used in the production of advanced polymers are ethylene, propylene and butene-1. Ethylene and propylene requirements that are not produced internally and externally supplied butene-1 are acquired through long-term contracts with third party suppliers or via spot purchases.
Our ability to pass through the increased cost of raw materials to customers is dependent on global market demand. In general, the pricing for purchases and sales of most products is determined by global market forces.
Industry Dynamics / Competition—With respect to product competition, the market is influenced and based on a variety of factors, including product development, price, product quality, product delivery, reliability of supply, product performance and customer service. We compete with regional and multinational marketers and producers of plastic resins and compounds. As polypropylene compounds are largely utilized in the automotive industry, we are also exposed to the volatility of this industry, which has significantly decreased since 2019.
Based on published capacity data and including our proportionate share of our joint ventures, we believe as of December 31, 2022, we were the largest global producer of polypropylene compounds.
Refining Segment

Overview

—The primary products of our Refining segment are refined products made from heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast. These refined products include gasoline and other distillates.

Sales & Marketing / Customers

—The Houston refinery’s products are primarily sold in bulk to other refiners, marketers, distributors and wholesalers at market-related prices. Most of the Houston refinery’s products are sold under contracts with a term of one year or less or are sold in the spot market. The Houston refinery’s products generally are transported to customers via pipelines and terminals owned and operated by other parties. The sales of refined products accounted for approximately 18%, 16% and 19%22% of our totalconsolidated revenues in 2017, 20162022 and 2015, respectively.

16% of consolidated revenues in each of 2021 and 2020.

Raw Materials

—Our Houston refinery, which is located on the Houston Ship Channel in Houston, Texas, has a heavy, high-sulfur crude oil processing capacity of approximately 268,000268 thousand barrels per day on a calendar day basis (normal operating basis), or approximately 292,000292 thousand barrels per day on a stream day basis (maximum achievable over a 24-hour period). The Houston refinery is a full conversion refinery designed to refine heavy, high-sulfur crude oil. This crude oil is more viscous and densedenser than traditional crude oil and contains higher concentrations of sulfur and heavy metals, making it more difficult to refine into gasoline and other high-value fuel products. However, thisAs a result, high-sulfur crude oil has historically been less costly to purchase than light,low-sulfur crude oil such as Brent.

oil. U.S. production is predominantly light sweet crude and much of the heavy crude has generally been imported from Canada, Mexico and other global producers, which has at times been subject to supply disruptions.

We purchase the crude oil used as a raw material for the Houston refinery on the open market on a spot basis and under a number of supply agreements with regional producers, generally with terms varying from three months to one to two years.

year.

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Industry Dynamics / Competition

—Our refining competitors are major integrated oil companies, refineries owned or controlled by foreign governments and independent domestic refiners. Based on published data, as of January 2017,2022, there were 141130 operable crude oil refineries in the U.S., and total U.S. refinery capacity was approximately 18.318 million barrels per day. During 2017,2022, the Houston refinery processed an average of approximately 236,000238 thousand barrels per day of heavy crude oil.

Our refining operations compete for the purchases of crude oil based on price and quality. Supply disruptions could impact the availability and pricing. We compete in gasoline and distillate markets as a bulk supplier of fungible products satisfying industry and government specifications. Competition is based on price and location.

The markets for fuel products tend to be volatile as well as cyclical as a result of the changing global economydue to supply and demand fundamentals and changing crude oil and refined product prices. Crude oil prices are impacted by worldwide political events, the economics of exploration and production and refined products demand. Prices and demand for fuel products are influenced by seasonal and short-term factors such as weather and driving patterns, as well as by longer term issues such as the economy, environmental concerns, energy conservation and alternative fuels. Industry fuel products supply is dependent on short-term industry operating capabilities and on long-term refining capacity.

A crack spread is a benchmark indication of refining margins based on the processing of a specific type of crude oil into an assumed selection of major refined products. The Houston refinery generally tracks the Maya2-1-1 crack spread, which represents the difference between the current month U.S. Gulf Coast price of two barrels of

Maya crude oil as set by Petróleos Mexicanos (“Pemex”) and one barrel each of U.S. Gulf Coast Reformulated Gasoline Blendstock for Oxygen Blending (“RBOB”) Gasoline and of U.S. Gulf Coast Ultra Low Sulfur Diesel (“ULSD”).Diesel. While these benchmark refining spreads are generally indicative of the level of profitability at the Houston refinery and similarly configured refineries, there are many other factors specific to each refinery and the industry in general, such as the value of refineryby-products, which influence operating results. Refineryby-products are products other than gasoline and distillates that represent aboutone-third of the total product volume, and include coke, sulfur, and lighter materials such as NGLs and crude olefins streams. The cost of Renewable Identification Numbers (“RINs”), which are renewable fuel credits mandated by the U.S. Environmental Protection Agency (the “EPA”), can also affect profitability.

In April 2022 we announced our decision to cease operation of our Houston refinery no later than the end of 2023 after determining that exiting the refining business is our best strategic and financial path forward. Our exit of the refining business progresses our greenhouse gas (“GHG”) emission reduction goals, and the site’s prime location gives us more options for advancing our future strategic objectives, including circularity. In the interim, we will continue serving the fuels market.
Technology Segment

Overview

—Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts. We market our process technologies and our polyolefin catalysts to external customers and also use them in our own manufacturing operations. ApproximatelyOver the past three years, approximately 20% to 25% of our catalyst sales are intercompany.

were sold internally to other segments.

Our polyolefin process licenses are structured to provide a standard core technology, with individual customer needs met by adding customized modules that provide the required capabilities to produce the defined production grade slate and plant capacity. In addition to the basic license agreement, a range of services can also be provided, including project assistance, training, assistance in starting up the plant and ongoing technical support afterstart-up. We may also offer marketing and sales services. In addition, licensees may continue to purchase polyolefin catalysts that are consumed in the production process, generally under long-term catalyst supply agreements with us.

Research and Development

—Our research and development (“R&D”) activities are designed to improve our existing products and processes, and discover and commercialize new materials, catalysts and processes. These activities focus on product and application development, process development, catalyst development and fundamental polyolefin-focused research.

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In 2017, 20162022, 2021 and 2015,2020, our R&D expenditures were $106$124 million, $99$124 million and $102$113 million, respectively. A portion of these expenses are related to technical support and customer service and are allocated to the other business segments. In 2017, 20162022, 2021, and 2015,2020 approximately 45% of all R&D costs were allocated to business segments other than Technology.

GENERAL

Intellectual Property

We maintain an extensive patent portfolio and continue to file new patent applications in the U.S. and other countries. As of December 31, 2017,2022, we owned approximately 5,5806,000 patents and patent applications worldwide. Our patents and trade secrets cover our processes, products and catalysts and are significant to our competitive position, particularly with regard to PO, intermediate chemicals, petrochemicals, polymers and our process technologies. We own globally registered and unregistered trademarks including marks for “LyondellBasell,” “Lyondell,” “Basell” and “Equistar.” While we believe that our intellectual property provides competitive advantages, we do not regard our businesses as being materially dependent upon any single patent, trade secret or trademark. Some of our heritage production capacity operates under licenses from third parties.

Environmental

Most of our operations are affected by national, state, regional and local environmental laws. Matters pertaining to the environment are discussed in Part I, Item 1A.Risk Factors; Part I, Item 3.Legal Proceedings; Part II, Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations; and Notes 2 and 1817 to the Consolidated Financial Statements.

We have made, and intend to continue to make, the expenditures necessary for compliance with applicable laws and regulations relating to environmental, health and safety matters. We incurred capital expenditures of $279$194 million in 20172022 for health, safety and environmental compliance purposes and improvement programs, and estimate such expenditures to be approximately $210$325 million in 20182023 and $230$300 million in 2019.

2024.

While capital expenditures or operating costs for environmental compliance, including compliance with potential legislation and potential regulation related to climate change, cannot be predicted with certainty, we do not believe they will have a material effect on our competitive position.

position in the near term.

While there can be no assurance that physical risksimpacts to our facilities and supply chain due to climate change will not occur in the future, we do not believe these risksimpacts are material in the near term.

Sustainability
LyondellBasell has established sustainability goals focusing on three key areas: ending plastic waste, addressing climate change and advancing a thriving society. One of our sustainability goals is to produce and market at least two million metric tons of recycled and renewable-based polymers annually by 2030, which represents approximately 20% of our 2022 global sales of polyethylene and polypropylene. Since 2019, we have produced and marketed products with more than 175,000 metric tons of recycled and renewable content.
In December 2022 we announced more ambitious climate reduction goals, increasing our 2030 GHG emissions reduction target for scope 1 and scope 2 emissions from 30% to 42%, relative to a 2020 baseline. In addition, we established a 2030 scope 3 GHG emissions reduction target of 30%, relative to a 2020 baseline, to align with science-based guidance.
As we progress in our efforts to achieve our goal to produce and market two million metric tons of recycled and renewable-based products, the corresponding increases in recycling rates will positively impact scope 3 emissions. We expect the emissions reductions we will get from accomplishing this goal to be incremental to the plans we currently have to reduce our scope 3 emissions by 30% by 2030. We estimate approximately 1 million metric tons of scope 3 reductions coming from achieving our circularity ambition.
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As announced in April 2022, we are planning to close our Houston refinery by the end of December 2023. This is expected to reduce scope 1 and scope 2 GHG emissions by more than 3 million metric tons annually and scope 3 emissions by approximately 40 million metric tons annually.
Certain GHG emissions reduction initiatives planned for implementation by 2030 are expected to begin in the near-term as we plan to leverage existing asset turnaround schedules for our largest sites. In 2024, our Wesseling site in Germany is planning implementation of process heat recovery projects, electrification of a large process turbine and optimization of steam demand, including phasing out the use of coal, reducing scope 1 emissions by 150 thousand metric tons annually when compared to the average for 2019 and 2020. In 2025, at our Channelview site in Texas we plan to optimize heated equipment through advanced digitization, efficiency improvements and fuel management.
Our previously announced goal to achieve net zero scope 1 and 2 GHG emissions from global operations by 2050 remains unchanged. Our ambition to achieve net zero by 2050 will need to be enabled by the development and deployment of new technology, including those related to cracker electrification, the use of hydrogen, carbon capture and storage and carbon utilization, across our manufacturing footprint.
We also aim to secure at least 50% of our global electricity from renewable sources by 2030. As of February 2023, we have executed eight power purchase agreements, achieving over half of our 2030 target. These agreements will generate over 2.6 million megawatt hours of renewable electricity annually and reduce our scope 2 emissions by nearly 1 million metric tons of carbon emissions.
To achieve our targets, we expect capital spending in the future will include investments to support lowering emissions in our operations. We also anticipate incurring costs for environmental compliance, including compliance with potential legislation and potential regulation related to climate change. We expect capital spending to support these ambitions will represent approximately 15% of total capital expenditures over the next two years. While many of the GHG emissions reduction projects are still in the early stages of development, we will evaluate, pursue and prioritize our GHG emission investments based on a rate of return for the project.
Human Capital
Our success as a company is tied to the passion, knowledge and talent of our global team. To achieve our vision of being the best operated and most valued company in the industry, we must attract top performers and equip them with the tools needed to continuously grow and leverage their potential.
Our Code of Conduct sets out our expectations on topics such as respecting fellow employees, anti-corruption, conflicts of interest, trade compliance, anti-trust and competition law, insider trading, sanctions, misconduct and political donations. It is available in seventeen languages on our company website. New employees are trained on the Code of Conduct and all employees receive annual refresher training. We also have a human rights policy that establishes our standards for workforce health and safety; prevention of discrimination, harassment and retaliation; diversity and inclusion; workplace security; working conditions and fair wages; freedom of association; freely chosen employment; and child labor protections.
Safety, Employee Relations

Health and Well-Being—We are committed to providing a safe workplace, free from recognized hazards, and we comply with all applicable health and safety laws and recognized standards. GoalZERO is our commitment to operating safely and with a goal of zero incidents, zero injuries and zero accidents. We cultivate a GoalZERO mindset with clear standards, regular communication, training, and targeted campaigns and events, including our annual Global Safety Day.

Workplace Flexibility—We continued to support workplace flexibility in 2022 as a result of feedback we received from employees. Based in part on data from employee surveys, we enhanced our workplace flexibility initiative in early 2023 by offering up to three remote days per work week. These changes have helped to attract and retain employees. We will continue to study the effectiveness of this policy and will make changes, where necessary, to support business needs.
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Global Talent Development and Engagement—To prepare our key individuals for advancement to larger roles, we tripled participation in our executive mentoring and peer learning programs.In addition, we launched a new program in partnership with external consultants to help diverse employees advance their leadership skills. Approximately 83% of our openings in leadership roles were filled by internal talent.
Demographics—As of December 31, 2017,2022 we employedhad approximately 13,400 full-time19,300 employees. Our employee demographics, excluding temporary employees, consisted of the following:
lyb-20221231_g1.jpg
U.S. Underrepresented population (“URP”) is based on reporting for the U.S. Equal Employment Opportunity Commission (“EEOC”), and part-timeincludes employees aroundwho self-identify as Hispanic or Latino, Black or African American, Asian or Pacific Islander, Indian, Alaskan Native, Native Hawaiian or two or more races. Employees who self-identify as White or Caucasian are considered U.S. Non-Underrepresented.
Diversity, Equity, Inclusion—DEI remained a key focus in 2022. Our efforts reflect a holistic, multi-year strategy to improve representation, ensure fairness, and increase visibility and accountability to leadership.
Diversity (Representation)—The percentage of diverse employees on our Executive Committee, which reports directly to our CEO, increased from 18% in 2021 to 33% in 2022, and as of February 2023, has increased to 40%. Of the world. Of this total, 6,400ten members on our Executive Committee, four are women, and together, our CEO and Executive Committee represent six different nationalities. This increase brings us closer to our long-term goals of achieving gender parity in global senior leadership. We are also committed to increasing the number of underrepresented senior leaders in the U.S. to reflect the general population ratio by 2032. To meet these targets, we have set short-term goals to increase the number of female senior leaders globally and the number of underrepresented senior leaders in the U.S. by 50% by 2027, relative to a 2022 baseline. These ambitious goals demonstrate our commitment to having a diverse group of company leaders.
To achieve these goals, we focused on enhancing our hiring, promotion and retention practices. With respect to hiring, we expanded our existing senior-level hiring practices to a larger group of positions. These practices include broader recruiting efforts, diverse interview panels and candidate slates, standardized interview questions and hiring-manager training. With respect to promotions, we launched a new program to help diverse employees advance their leadership skills. We also continued to develop and improve our internal talent programs. Through these efforts, we promoted 16% more women in 2022 than in 2021. Indeed, increased promotions of women were locatedthe main reason the number of women in North Americasenior leadership globally increased by 1% to 22% in 2022.
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While we are making significant efforts, our progress towards our goals in 2022 was negatively impacted by increased attrition of both women and another 5,900URP leaders. Despite increased hiring and promotions of URP employees, the number of URP senior leaders in the U.S. decreased by 1% from 2021 to 18% in 2022. We continue to analyze retention issues to understand attrition drivers and to enhance our employee engagement efforts. Other factors impacting our results were locatedthe challenging external talent market and the addition of new senior leadership roles due to the Company’s growth initiatives. We recognize that building talent pipelines and transforming culture takes time, and we remain committed to frequently assessing outcomes and developing programs that will advance these goals.
Equity (Fairness)—For the second consecutive year, we completed a pay equity review and performance analysis. Our pay equity review compared pay for like jobs and specifically focused on base pay for gender (globally) and ethnicity (U.S. only). Consistent with 2021 findings, the review reflected that pay is generally administered fairly with a small number of exceptions that should be remediated by the second quarter of 2023. We also confirmed that performance appraisals are generally administered fairly. Both of these annual review processes are now embedded in Europe. our HR processes.

The remainderCompany also implemented several practices to advance pay equity, including:

•Ensuring that job offers are based on the role, market competitiveness, and a candidate's level of proficiency and experience and not based on a candidate’s historical compensation;
•Modifying promotion practices to ensure pay fairness is applied consistently for internal candidates compared to external hires;
•Helping line managers conduct an internal equity review for their employees and, when necessary, making compensation adjustments; and
•Establishing a consistent framework for recognizing and retaining employees.

Finally, we conducted stakeholder workshops to strengthen our approach to pay equity and provide increased transparency to employees about pay practices.
Inclusion (Belonging)—We advanced our inclusion efforts by increasing the number of global employee networks from four to six, building a global diverse network of employees championing inclusion. Executive leaders serve as active sponsors for each network, and about 15% of our employees are in other global locations.

As of December 31, 2017, approximately 850workforce has joined at least one of our employees in North America were represented by labor unions. The vast majorityemployee networks. We have network members present at 92% of our employeesglobal sites, with 47% of members residing outside of the U.S. and 28% joining as allies of underrepresented groups. Network programming is strongly tied to career development and business and community impact, including engagement in Europe and South America are subject to staff council or works council coverage or collective bargaining agreements.

In addition to our own employees, we use the servicesstrategy development activities with executives in 2022.

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Contents

INFORMATION ABOUT OUR EXECUTIVE OFFICERS OF THE REGISTRANT


Our executive officers as of February 1, 201823, 2023 were as follows:


Name and AgeSignificant Experience

Name and Age

Peter Vanacker, 56

Significant Experience

Bhavesh V. (“Bob”) Patel, 51

Chief Executive Officer since May 2022.

President, Chief Executive Officer and ChairmanChair of the Management Board since January 2015.

Executive Vice President, OlefinsCommittee of Neste Corporation, a renewable products company From September 2018 to May 2022.

Chief Executive Officer and Polyolefins—EAI and Technology from October 2013 and memberManaging Director of the Management BoardCABB Group, a global supplier of fine and specialty chemicals from April 20142015 to January 2015.

Senior Vice President, Olefins and Polyolefins—EAI and Technology from November 2010 to October 2013.

Senior Vice President, Olefins and Polyolefins—Americas from March 2010 to June 2011.

August 2018.

Thomas Aebischer,Tracey Campbell, 56

Executive Vice President, Sustainability and Chief Financial OfficerCorporate Affairs since October 2022.

Vice President, Public Affairs from November 2020 to September 2022.

Director, Polyolefins Asia Pacific from July 2018 to October 2020.

Director, North America Feedstock Supply from April 2015 to June 2018.

Trisha Conley, 50Executive Vice President, People and Culture since February 2023.

Senior Vice President, People Development of Renewable Energy Group, a renewable energy company, from August 2020 to January 2016.

Chief Financial Officer2023.

Vice President of LafargeHolcimHuman Resources, Fuels North America and Head of Country (United States) for Downstream Human Resources at BP, a global energy provider, from July 2015 to December 2015.

Chief Financial Officer of Holcim Ltd. from January 2011 to June 2015.

July 2020.

Paul Augustowski, 57

Senior Vice President, Olefins and Polyolefins—Americas since January 2016.

Vice President, Polymer Sales—Americas from January 2015 to January 2016.

Director, Polypropylene and Catalloy—Americas from November 2011 to January 2015.

Darleen Caron, 53

Kim Foley, 56

Executive Vice President and Chief Human Resources Officer since October 2017.

Executive Vice President of Global Human Resources and Member of The Office of The President at SNC Lavalin Group, Inc. from December 2010 to December 2015.

Daniel Coombs, 61

Executive Vice President, Global Manufacturing, Projects, Refining and Technology since February 2017.

Executive Vice President, Global Olefins and Polyolefins, and Technology from January 2016 to February 2017.

Executive Vice President, Intermediates and Derivatives from May 2015 to January 2016.

and Refining since October 2022.


Senior Vice President, of Manufacturing for Chevron Phillips ChemicalHSE, Global Engineering and Turnarounds from December 2013August 2020 to September 2022.

Vice President, Health, Safety and Environment from October 2019 to July 2020.

Site Manager at Channelview from May 2015.

2017 to October 2019.

NameDale Friedrichs, 59

Executive Vice President, Operational Excellence and Age

Significant Experience

HSE since October 2022.


Interim Executive Vice President, People and Culture from October 2022 to February 2023.

Senior Vice President, for Specialties, AromaticsHuman Resources and Styrenics for Chevron Phillips ChemicalGlobal Projects from December 2011August 2020 to November 2013.

September 2022.


Vice President, of Corporate Planning and Development for Chevron Phillips ChemicalHuman Resources from September 2011October 2019 to November 2011.

Massimo Covezzi, 60

Senior Vice President, Research and Development since January 2008.

Stephen Doktycz, 56

Senior Vice President, Strategic Planning and Transactions since March 2017.

Corporate Director and Executive Project Lead at The Dow Chemical Company from 2013 to March 2017.

Global Director, Corporate and Strategic Development at The Dow Chemical Company from 2011 to 2013.

Dale Friedrichs, 54

July 2020.


Vice President, Health, Safety, Environment and Security sincefrom February 2017.

Site Manager of various facilities from January 19952017 to February 2017.

October 2019.

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Name and Age

Significant Experience
James Guilfoyle, 47

52

Senior Vice President, O&P, Europe, Africa, Middle East and India since October 2022.

Executive Vice President, Advanced Polymer Solutions & Global Supply Chain from July 2018 to September 2022.

Senior Vice President, Global Intermediates & Derivatives and Global Supply Chain sincefrom February 2017

Senior to July 2018.

Jeffrey Kaplan, 54Executive Vice President Global Intermediates and Derivatives from June 2015 to February 2017.

General Counsel since October 2022.

Executive Vice President, of Global Propylene OxideLegal & Public Affairs andCo-Products Chief Legal Officer from March 2015 to May 2015.

Director of Polymer Sales Americas from January 2012 to February 2015.

September 2022.

Jeffrey Kaplan, 49

Kenneth (“Ken”) Lane, 54

Executive Vice President, Olefins & Polyolefins since October 2022.

Executive Vice President, Global Olefins and Polyolefins from July 2019 to September 2022.

Interim Chief Executive Officer from January 2022 to May 2022.

President, Monomers Division at BASF, a German chemical company, from January 2019 to July 2019.

President, Global Catalysts at BASF from June 2013 to December 2018.
Michael C. McMurray, 58Executive Vice President and Chief LegalFinancial Officer since March 2015.

Deputy General CounselNovember 2019.

Senior Vice President and Chief Financial Officer at Owens Corning, a global manufacturer of insulation, roofing and fiberglass composites, from December 2009August 2012 to March 2015.

November 2019.

Richard Roudeix,Torkel Rhenman, 59

Executive Vice President, Advanced Polymer Solutions since October 2022.

Executive Vice President, Intermediates & Derivatives, and Refining from August 2020 to September 2022.

Executive Vice President, Intermediates & Derivatives from July 2019 to July 2020.

Chief Executive Officer and Director of Lhoist Group, a privately held minerals and mining company, from 2012 to 2017.
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Name and AgeSignificant Experience
James Seward, 55

Executive Vice President and Chief Innovation Officer since October 2022.

Senior Vice President, Research & Development, Technology and Sustainability from August 2020 to September 2022.

Senior Vice President, Technology Business, Sustainability, and Olefins & Polyolefins, Europe, Asia and International since February 2017.

Senior Joint Venture Management from September 2018 to July 2020.

Vice President, Joint Ventures and International Marketing from May 2014 to August 2018.

Yvonne van der Laan, 51Executive Vice President, Circular and Low Carbon Solutions since October 2022.

Senior Director, Global Circularity from May 2022 to September 2022.

Director, Olefins & Polyolefins,Optimizations, Europe from March 2015September 2019 to February 2017.

Director, OlefinsApril 2022.

Vice President, Industry & Bulk Cargo for the Port of Rotterdam, the largest seaport in Europe, from May 2009February 2016 to March 2015.

September 2019.


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Description of Properties

Our principal manufacturing facilities as of December 31, 20172022 are set forth below and are identified by the principal segment or segments using the facility. All of the facilities are wholly owned, except as otherwise noted.

LocationSegment

Location

Americas

Segment

Bayport (Pasadena), TexasI&D
Bayport (Pasadena), Texas(1)
I&D
Bayport (Pasadena), TexasO&P-Americas
Channelview, TexasO&P-Americas
Channelview, Texas(1)(2)
I&D
Chocolate Bayou, TexasO&P-Americas
Clinton, IowaO&P-Americas
Corpus Christi, TexasO&P-Americas
Edison, New JerseyO&P-Americas
Houston, TexasRefining
La Porte, Texas(3)
O&P-Americas
La Porte, Texas(3)
I&D
Lake Charles, LouisianaO&P-Americas
Lake Charles, LouisianaO&P-Americas
Matagorda, TexasO&P-Americas
Morris, IllinoisO&P-Americas
Victoria, Texas†O&P-Americas
Europe
Berre l’Etang, FranceO&P-EAI
Botlek, Rotterdam, The Netherlands†I&D
Brindisi, ItalyO&P-EAI
Carrington, UK†O&P-EAI
Ferrara, ItalyO&P-EAI
Technology

Americas

Fos-sur-Mer, France†		I&D
Frankfurt, Germany†O&P-EAI
Technology

Bayport (Pasadena), Texas

Knapsack, Germany†		I&DO&P-EAI
APS

Bayport (Pasadena), Texas(1)

Kerpen, Germany		APS
Ludwigshafen, Germany†Technology
Maasvlakte, The Netherlands(4)†
I&D
Moerdijk, The Netherlands†APS
Münchsmünster, GermanyO&P-EAI
Tarragona, Spain(5)†
O&P-EAI
APS

Bayport (Pasadena), Texas

Wesseling, Germany		O&P—Americas&P-EAI
Asia-Pacific

Channelview, Texas(2)

Panjin, China(6)†
O&P—Americas

Channelview, Texas(1)(2)

I&D

Chocolate Bayou, Texas

O&P—Americas

Clinton, Iowa

O&P—Americas

Corpus Christi, Texas

O&P—Americas

Edison, New Jersey

O&P—Americas

Houston, Texas

Refining

La Porte, Texas(3)

O&P—Americas

La Porte, Texas(3)(4)

I&D

Lake Charles, Louisiana

O&P—Americas

Matagorda, Texas

O&P—Americas

Morris, Illinois

O&P—Americas

Tuscola, Illinois

O&P—Americas

Victoria, Texas†

O&P—Americas

Europe

Berre l’Etang, France

O&P—EAI

Botlek, Rotterdam, The Netherlands†

I&D

Brindisi, Italy

O&P—EAI

Carrington, UK

O&P—EAI

Ferrara, Italy

O&P—EAI
Technology

Fos-sur-Mer, France†

I&D

Frankfurt, Germany†

O&P—EAI
Technology

Knapsack, Germany†

O&P—EAI

Ludwigshafen, Germany†

Technology

Maasvlakte, The Netherlands(5)

I&D

Moerdijk, The Netherlands†

O&P—EAI

Münchsmünster, Germany

O&P—EAI

Tarragona, Spain(6)

O&P—EAI

Wesseling, Germany

O&P—EAI

Asia Pacific

Geelong, Australia

O&P—EAI&P-EAI

†The facility is located on leased land.
(1)The Bayport PO/TBA plants and the Channelview PO/SM I plant are held by the U.S. PO joint venture between Covestro and Lyondell Chemical Company. These plants are located on land leased by the U.S. PO joint venture.
(2)Equistar Chemicals, LP operates a styrene maleic anhydride unit and a polybutadiene unit, which are owned by an unrelated party and are located within the Channelview facility on property leased from Equistar Chemicals, LP.
(3)The La Porte facilities are on contiguous property.
(4)The La Porte methanol facility is owned by La Porte Methanol Company, a partnership owned 85% by us.
(5)The Maasvlakte plant is owned by the European PO joint venture and is located on land leased by the European PO joint venture.
(6)The Tarragona PP facility is located on leased land; the compounds facility is located onco-owned land.

†     The facility is located on leased land.
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(1)The Bayport PO/TBA plants and the Channelview PO/SM I plant are held by the U.S. PO joint venture between Covestro and Lyondell Chemical Company. These plants are located on land leased by the U.S. PO joint venture.
(2)Equistar Chemicals, LP operates a polybutadiene unit, which is owned by an unrelated party and is located within the Channelview facility on property leased from Equistar Chemicals, LP.
(3)The La Porte facilities are on contiguous property.
(4)The Maasvlakte plant is owned by the European PO joint venture and is located on land leased by the European PO joint venture.
(5)The Tarragona PP facility is located on leased land; the compounds facility is located on co-owned land.
(6)The Panjin facility is owned by the Bora LyondellBasell Petrochemical Co., Ltd. joint venture and is located on land leased by the joint venture.

Other Locations and Properties

We maintain executive offices in London, the United Kingdom; Rotterdam, The Netherlands; Houston, Texas and Houston, Texas.Hong Kong, China. We maintain research facilities in Lansing, Michigan; Channelview, Texas; Cincinnati, Ohio; Ferrara, Italy and Frankfurt, Germany. Our Asia PacificAsia-Pacific headquarters are in Hong Kong. We also have technical support centers in Bayreuth, Germany; Geelong, AustraliaMumbai, India; and Tarragona, Spain. We have various sales facilities worldwide.

Website Access to SEC Reports

Our Internet website address ishttp://www.lyb.comwww.LyondellBasell.com. Information contained on our Internet website is not part of this report on Form10-K.

Our Annual Reports on Form10-K, Quarterly Reports on Form10-Q, Current Reports on Form8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on our website, free of charge, as soon as reasonably practicable after such reports are filed with, or furnished to, the U.S. Securities and Exchange Commission.Commission (“SEC”). Alternatively, youthese reports may access these reportsbe accessed at the SEC’s website athttp://www.sec.gov.

www.sec.gov.


Item 1A.     Risk Factors.

You should carefully consider the following risk factors in addition to the other information included in this Annual Report on Form10-K. Each of these risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common stock.

Risks Related to our Business and Industry
The cyclicality and volatility of the industries in which we participate may cause significant fluctuations in our operating results.
Our business includingoperations are subject to the cyclical and volatile nature of the supply-demand balance in the chemical and refining industries. Our future operating results are expected to continue to be affected by this cyclicality and volatility. The chemical and refining industries historically have experienced alternating periods of capacity shortages, causing prices and profit margins to increase, followed by periods of excess capacity, resulting in oversupply, declining capacity utilization rates and declining prices and profit margins.
In addition to changes in the supply and demand for products, changes in energy prices and other worldwide economic conditions can cause volatility. These factors result in significant fluctuations in profits and cash flow from period to period and over business cycles.
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New capacity additions around the world may lead to periods of oversupply and lower profitability. The timing and extent of any changes to currently prevailing market conditions are uncertain and supply and demand may be unbalanced at any time. As a consequence, we are unable to accurately predict the extent or duration of future industry cycles or their effect on our business, financial condition or results of operations.
A sustained decrease in the price of crude oil may adversely impact the results of our operations, primarily in North America.
Energy costs generally follow price trends of crude oil and natural gas. These price trends may be highly volatile and cyclical. In the past, raw material and energy costs have experienced significant fluctuations that adversely affected our business segments’ results of operations. For example, we have benefited from the favorable ratio of U.S. crude oil prices to natural gas prices in the past. If the price of crude oil remains lower relative to U.S. natural gas prices or if the demand for natural gas and NGLs increases, this may have a negative impact on our results of operations.
Costs and limitations on supply of raw materials and energy may result in increased operating expenses.
The costs of raw materials and energy represent a substantial portion of our operating expenses. Due to the significant competition we face and the commodity nature of many of our products we are not always able to pass on raw material and energy cost increases to our customers. When we do have the ability to pass on the cost increases, we are not always able to do so quickly enough to avoid adverse impacts on our results of operations. For example during 2022, increases in costs for energy and raw materials, and the related decline in demand for our products, resulted in the reduction of operating rates or delayed restart of operations at several of our sites in Europe.
Cost increases for raw materials, energy, or broad-based price inflation also increase working capital needs, which could reduce our liquidity and reputation,cash flow. Even if we are able to increase our sales prices to reflect these increases, demand for products may decrease as consumers and customers reduce their consumption or use substitute products, which may have an adverse impact on our results of operations. In addition, producers in natural gas cost-advantaged regions, such as the Middle East and North America, benefit from the lower prices of natural gas and NGLs. Competition from producers in these regions may cause us to reduce exports from Europe and elsewhere. Any such reductions may increase competition for product sales within Europe and other markets, which can result in lower margins in those regions.
For some of our raw materials and utilities there are a limited number of suppliers and, in some cases, the supplies are specific to the particular geographic region in which a facility is located. It is also common in the chemical and refining industries for a facility to have a sole, dedicated source for its utilities, such as steam, electricity and gas. Having a sole or limited number of suppliers may limit our negotiating power, particularly in the case of rising raw material costs. Any new supply agreements we enter into may not have terms as favorable as those contained in our current supply agreements.
Additionally, there is concern over the reliability of water sources, including around the U.S. Gulf Coast where several of our facilities are located. The decreased availability or less favorable pricing for water as a result of population growth, drought or regulation could negatively impact our operations, including by impacting our ability to produce or transport our products.
If our raw material or utility supplies were disrupted, our businesses would likely incur increased costs to procure alternative supplies or incur excessive downtime, which would have a negative impact on plant operations. Disruptions of supplies may occur as a result of transportation issues resulting from natural disasters, water levels, and interruptions in marine water routes, among other causes, that can affect the operations of vessels, barges, rails, trucks and pipeline traffic. These risks are particularly prevalent in the U.S. Gulf Coast area. Additionally, increasing exports of NGLs and crude oil from the U.S. or greater restrictions on hydraulic fracturing could restrict the availability of our raw materials, thereby increasing our costs.
With increased volatility in raw material costs, our suppliers could impose more onerous terms on us, resulting in shorter payment cycles and increasing our working capital requirements.
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Our ability to source raw materials may be adversely affected by safetypolitical instability, civil disturbances or product liability issues.

Failureother governmental actions.

We obtain a portion of our principal raw materials from sources in the Middle East and Central and South America that may be less politically stable than other areas in which we conduct business. Political instability, civil disturbances and actions by governments in these areas are more likely to appropriately manage safety, human health, product liabilitysubstantially increase the price and environmental risks associated withdecrease the supply of raw materials necessary for our products, product life cycles and production processesoperations, which could adversely impact employees, communities, stakeholders, our reputation andhave a material adverse effect on our results of operations. Public perception
Incidents of civil unrest, including terrorist attacks and demonstrations that have been marked by violence, have occurred in a number of countries in the risks associated with our productsMiddle East and production processesSouth America. Some political regimes in these countries are threatened or have changed as a result of such unrest. Political instability and civil unrest could impact product acceptancecontinue to spread in the region and influence the regulatory environmentinvolve other areas. Such unrest, if it continues to spread or grow in intensity, could lead to civil wars, regional conflicts or regime changes resulting in governments that are hostile to countries in which we operate. Whileconduct substantial business, such as in the U.S., Europe or their respective trading partners.
Our business is capital intensive and we have proceduresrely on cash generated from operations and controlsexternal financing to manage safety risks, issuesfund our growth and ongoing capital needs. Limitations on access to external financing could adversely affect our operating results.
We require significant capital to operate our current business and fund our growth strategy. Moreover, interest payments, dividends, capital requirements of our joint ventures, the expansion of our current business or other business opportunities may require significant amounts of capital. If we need external financing, our access to credit markets and pricing of our capital is dependent upon maintaining sufficient credit ratings from credit rating agencies and the state of the capital markets generally. There can be no assurances that we would be able to incur indebtedness on terms we deem acceptable, and it is possible that the cost of any financings could increase significantly, thereby increasing our expenses and decreasing our net income. If we are unable to generate sufficient cash flow or raise adequate external financing, including as a result of significant disruptions in the global credit markets, we could be createdforced to restrict our operations and growth opportunities, which could adversely affect our operating results.
We may use our $3,250 million revolving credit facility, which backs our commercial paper program, to meet our cash needs, to the extent available. As of December 31, 2022, we had no borrowings or letters of credit outstanding under the facility and $200 million, net of discount, outstanding under our commercial paper program, leaving an unused and available credit capacity of $3,050 million. We may also meet our cash needs by events outsideselling receivables under our $900 million U.S. Receivables Facility. As of December 31, 2022, we had availability of $794 million under this facility. In the event of a default under our credit facilities or any of our control, including natural disasters, severe weather eventssenior notes, we could be required to immediately repay all outstanding borrowings and actsmake cash deposits as collateral for all obligations the facility supports, which we may not be able to do. Any default under any of sabotage.

our credit arrangements could cause a default under many of our other credit agreements and debt instruments. Without waivers from lenders party to those agreements, any such default could have a material adverse effect on our ability to continue to operate.

Risks Related to our Operations
Our operations are subject to risks inherent in chemical and refining businesses, and we could be subject to liabilities for which we are not fully insured or that are not otherwise mitigated.

We maintain property, business interruption, product, general liability, casualty and other types of insurance that we believe are appropriate for our business and operations as well as in line with industry practices. However, we are not fully insured against all potential hazards incident to our business, including losses resulting from natural disasters or climate-related exposures, wars or terrorist acts. Changes in insurance market conditions have caused, and may in the future cause, premiums and deductibles for certain insurance policies to increase substantially and, in some instances, for certain insurance to become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we were not fully insured, we might not be able to finance the
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amount of the uninsured liability on terms acceptable to us or at all, and might be obligated to divert a significant portion of our cash flow from normal business operations.

Our business, including our results of operations and reputation, could be adversely affected by safety or product liability issues.
Failure to appropriately manage occupational safety, process safety, product safety, human health, product liability and environmental risks inherent in the chemical and refining businesses and associated with our products, product life cycles and production processes could result in unexpected incidents including releases, fires, or explosions resulting in personal injury, loss of life, environmental damage, loss of revenue, legal liability, and/or operational disruption. Public perception of the risks associated with our products and production processes could impact product acceptance and influence the regulatory environment in which we operate. While we have management systems, procedures and controls to manage these risks, issues could be created by events outside of our control, including natural disasters, severe weather events and acts of sabotage.
Further, because a part of our business involves licensing polyolefin process technology, our licensees are exposed to similar risks involved in the manufacture and marketing of polyolefins. Hazardous incidents involving our licensees, if they do result or are perceived to result from use of our technologies, may harm our reputation, threaten our relationships with other licensees and/or lead to customer attrition and financial losses. Our policy of covering these risks through contractual limitations of liability and indemnities and through insurance may not always be effective. As a result, our financial condition and results of operation would be adversely affected, and other companies with competing technologies may have the opportunity to secure a competitive advantage.

A sustained decrease

Interruptions of operations at our facilities may result in increased liabilities or lower operating results.
We own and operate large-scale facilities. Our operating results are dependent on the price of crude oil may adversely impact the resultscontinued operation of our operations, primarily in North America.

Energy costs generally follow price trendsvarious production facilities and the ability to complete construction and maintenance projects on schedule. Interruptions at our facilities may materially reduce the productivity and profitability of crude oil and natural gas. These price trends may be highly volatile and cyclical. In the past, raw material and energy costs have experienced significant fluctuations that adversely affecteda particular manufacturing facility, or our business segments’ resultsas a whole, during and after the period of operations. For example,such operational difficulties. In recent years, we have benefitted fromhad to shut down plants on the favorable ratioU.S. Gulf Coast, including the temporary shutdown of U.S. crude oil prices to natural gas prices in recent years. This advantage was reduceda portion of our Houston refinery, as oil prices declined beginning in 2014. Ifa result of various hurricanes and cold weather events striking Texas and Louisiana. In addition, because the price of crude oil remains lower relative to U.S. natural gas prices or ifHouston refinery is our only refining operation, an outage at the demand for natural gas and NGLs increases, this mayrefinery could have a particularly negative impact on our operating results of operations.

Costs and limitations on supply of raw materials and energy may result in increased operating expenses.

The costs of raw materials and energy represent a substantial portion of our operating expenses. Due to the significant competition we face and the commodity nature of many of our products we are not always able to pass on raw material and energy cost increases to our customers. Whenas we do not have the ability to passincrease refining production elsewhere.

Our operations are subject to hazards inherent in chemical manufacturing and refining and the related storage and transportation of raw materials, products and wastes. These potential hazards include:
•pipeline leaks and ruptures;
•explosions;
•fires;
•severe weather and natural disasters;
•mechanical failure;
•unscheduled downtimes;
•supplier disruptions;
•labor shortages or other labor difficulties;
•transportation interruptions;
•remediation complications;
•increased restrictions on, or the unavailability of, water for use at our manufacturing sites or for the transport of our products or raw materials;
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•chemical and oil spills;
•discharges or releases of toxic or hazardous substances or gases;
•shipment of incorrect or off-specification product to customers;
•storage tank leaks;
•other environmental risks; and
•cyber-attack or other terrorist acts.
Some of these hazards may cause severe damage to or destruction of property and equipment, personal injury, loss of life, environmental damage, legal liability resulting from government action or litigation, loss of revenue, suspension of operations or the shutdown of affected facilities.
Large capital projects can take many years to complete, and market conditions could deteriorate significantly between the project approval date and the project startup date, negatively impacting project returns. If we are unable to complete capital projects at their expected costs and in a timely manner, or if the market conditions assumed in our project economics deteriorate, our business, financial condition, results of operations and cash flows could be materially and adversely affected.
Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities could materially adversely affect our ability to achieve forecasted internal rates of return and operating results. For example, higher costs arising from delaying construction of our world-scale PO/TBA plant in Houston due to COVID-19, more extensive civil construction, and unexpected tariffs on materials increased our costs and impacted our projected rate of return on the project. Delays in making required changes or upgrades to our facilities could subject us to fines or penalties as well as affect our ability to contract with our customers and supply certain products we produce. Such delays or cost increases wemay arise as a result of unpredictable factors, many of which are not always able to do so quickly enough to avoid beyond our control, including:
•denial of or delay in receiving requisite regulatory approvals and/or permits;
•unplanned increases in the cost of construction materials or labor;
•disruptions in transportation of components or construction materials;
•adverse impacts onweather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our resultsfacilities, or those of operations.

Cost increases for raw materials also may increase working capital needs, whichvendors or suppliers;

•shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; and
•nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors.
Any one or more of these factors could reduce our liquidity and cash flow. Even if we increase our sales prices to reflect rising raw material and energy costs, demand for products may decrease as customers reduce their consumption or use substitute products, which may have an adversea significant impact on our ongoing capital projects. If we were unable to make up the delays associated with such factors or to recover the related costs, or if market conditions change, it could materially and adversely affect our business, financial condition, results of operations and cash flows.
Shared control or lack of control of joint ventures may delay decisions or actions regarding our joint ventures.
A portion of our operations are conducted through joint ventures, where control may be exercised by or shared with unaffiliated third parties. We cannot control the actions or ownership of our joint venture partners, including any nonperformance, default or bankruptcy of joint venture partners. The joint ventures that we do not control may also lack financial reporting systems to provide adequate and timely information for our reporting purposes.
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Our joint venture partners may have different interests or goals than we do and may take actions contrary to our requests, policies or objectives. Differences in views among the joint venture participants also may result in delayed decisions or in failures to agree on major matters, potentially adversely affecting the business and operations of the joint ventures and in turn our business and operations. In addition, producersWe may develop a dispute with any of our partners over decisions affecting the venture that may result in natural gas cost-advantaged regions, suchlitigation, arbitration or some other form of dispute resolution. If a joint venture participant acts contrary to our interest, it could harm our brand, business, results of operations and financial condition.
We may be required to record material charges against our earnings due to any number of events that could cause impairments to our assets.
We may be required to reduce production or idle facilities for extended periods of time or exit certain businesses as a result of the Middle East and North America, benefit from the lowercyclical nature of our industry. Specifically, oversupplies of or lack of demand for particular products or high raw material prices of natural gas and NGLs. Competition from producers in these regions may cause us to reduce exports from Europe and elsewhere.production. We may choose to reduce production at certain facilities because we have off-take arrangements at other facilities, which make any reductions or idling unavailable at those facilities. Any such reductions may increase competition for product sales within Europedecision to permanently close facilities or exit a business would likely result in impairment and other markets, whichcharges to earnings. For example, in April 2022, the Finance Committee of the Board of Directors of the Company approved a plan to exit the refining business, resulting in the recognition of $187 million of expense. See Notes 7, 12 and 20 to the Consolidated Financial Statements for additional information regarding the planned exit.
Temporary outages at our facilities can result in lower margins in those regions.

For somelast for several quarters and sometimes longer. These outages could cause us to incur significant costs, including the expenses of maintaining and restarting these facilities. In addition, we have significant obligations under take-or-pay agreements. Even though we may reduce production at facilities, we may be required to continue to purchase or pay for utilities or raw materials under these arrangements.

Acquisitions or dispositions of assets or businesses could disrupt our business and harm our financial condition and stock price.
We continually evaluate the performance and strategic fit of all of our raw materialsbusinesses and utilities there are a limited number of suppliersevaluate whether our businesses would benefit from acquisitions to enhance growth or dispositions that would align our footprint with our overall business strategy. These transactions pose risks and in some cases, the supplies are specific to the particular geographic region in which a facility is located. It is also common in the chemical and refining industries for a facility to have a sole, dedicated source for its utilities, such as steam, electricity and gas. Having a sole or limited number of suppliers may limit our negotiating power, particularly in

the case of rising raw material costs. Any new supply agreements we enter into may not have terms as favorable as those contained in our current supply agreements.

Additionally, there is growing concern over the reliability of water sources, including around the Texas Gulf Coast where several of our facilities are located. The decreased availability or less favorable pricing for water as a result of population growth, drought or regulationchallenges that could negatively impact our operations.

business and financial statements.

Acquisitions involve numerous risks, including meeting our standards for compliance, problems combining the purchased operations, technologies or products, unanticipated costs and liabilities, diversion of management’s attention from our core businesses, and potential loss of key employees. There can be no assurance that we will be able to integrate successfully any businesses, products, technologies, or personnel that we might acquire. The integration of businesses that we may acquire is likely to be a complex, time-consuming, and expensive process and we may not realize the anticipated revenues, synergies, or other benefits associated with our acquisitions if we do not manage and operate the acquired business up to our expectations. If our raw material or utility supplies were disrupted, our businesses may incur increased costswe are unable to procure alternative supplies or incur excessive downtime, which would have a direct negative impact on plant operations. Disruptions of supplies may occurefficiently operate as a resultcombined organization utilizing common information and communication systems, operating procedures, financial controls, and human resources practices, our business, financial condition, and results of transportation issues resulting from natural disasters, water levels, and interruptions in marine water routes, among other causes, that can affect the operations of vessels, barges, rails, trucks and pipeline traffic. These risks are particularly prevalent in the U.S. Gulf Coast area. Additionally, increasing exports of NGLs and crude oil from the U.S. or greater restrictions on hydraulic fracturing could restrict the availability of our raw materials, thereby increasing our costs.

With increased volatility in raw material costs, our suppliers could impose more onerous terms on us, resulting in shorter payment cycles and increasing our working capital requirements.

Our ability to source raw materials may be adversely affected by political instability, civil disturbancesaffected.

Dispositions of assets or businesses involve risks, including difficulties in the separation of operations, services, products and personnel, the diversion of management's attention from other business concerns, the disruption of our business, the potential loss of key employees and the retention of uncertain environmental or other governmental actions.

We obtain a portion of our principal raw materials from sourcescontingent liabilities related to the divested business. In addition, they may result in North Africa, the Middle East,significant asset impairment charges, including those related to goodwill and Central and South America that may be less politically stable than other areas inintangible assets, which we conduct business, such as Europe or the U.S. Political instability, civil disturbances and actions by governments in these areas are more likely to substantially increase the price and decrease the supply of raw materials necessary for our operations, which willcould have a material adverse effect on our financial condition and results of operations.

Increased incidents For example, in April 2022 we agreed to the sale of civil unrest, including terrorist attacks and demonstrationsour Australian polypropylene business that have been marked by violence, have occurredresulted in a number$69 million non-cash impairment charge, which impacted earnings. In the event we are unable to successfully divest a business or product line, we may be forced to wind down such business or product line, which could materially and adversely affect our results of countriesoperations and financial condition.

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We cannot assure you that we will be successful in North Africamanaging these or any other significant risks that we encounter in acquiring or divesting a business or product line, and any transaction we undertake could materially and adversely affect our business, financial condition, results of operations and cash flows, and may also result in a diversion of management attention, operational difficulties and losses.
Risks related to the Middle East. Some political regimes in these countries are threatened or have changed as a result of such unrest. Political instabilityGlobal Economy and civil unrest could continue to spread in the region and involve other areas. Such unrest, if it continues to spread or grow in intensity, could lead to civil wars, regional conflicts or regime changes resulting in governments that are hostile to countries in which we conduct substantial business, such as in Europe, the U.S., or their respective trading partners.

Multinational Operations

Economic disruptions and downturns in general, and particularly continued global economic uncertainty or economic turmoil in emerging markets, could have a material adverse effect on our business, prospects, operating results, financial condition and cash flows.

Our results of operations can be materially affected by adverse conditions in the financial markets and depressed economic conditions generally. Economic downturns in the businesses and geographic areas in which we sell our products could substantially reduce demand for our products and result in decreased sales volumes and increased credit risk. Recessionary environments adversely affect our business because demand for our products is reduced, particularly from our customers in industrial markets generally and the automotive and housing industries specifically, and may result in higher costs of capital. A significant portion of our revenues and earnings are derived from our business in Europe, including southern Europe. In addition, most of our European transactions and assets, including cash reserves and receivables, are denominated in euros.

If a sustained financial crisis in Europe leads to a significant devaluation of the euro, the value of our financial assets that are denominated in euros would be significantly reduced when translated to U.S. dollars for financial reporting purposes.

We also derive significant revenues from our business in emerging markets, particularly the emerging markets in Asia and South America. Any broad-based downturn in these emerging

markets, or in a key market such as China, could require us to reduce export volumes into these markets and could also require us to divert product sales to less profitable markets. Any of these conditions could ultimately harm our overall business, prospects, operating results, financial condition and cash flows.

The cyclicality and volatility of the industries in which we participate may cause significant fluctuations in our operating results.

Our business operations are subject to the cyclical and volatile nature of the supply-demand balance in the chemical and refining industries. Our future operating results are expected to continue to be affected by this cyclicality and volatility. The chemical and refining industries historically have experienced alternating periods of capacity shortages, causing prices and profit margins to increase, followed by periods of excess capacity, resulting in oversupply, declining capacity utilization rates and declining prices and profit margins.

In addition to changes in the supply and demand for products, changes in energy prices and other worldwide economic conditions can cause volatility. These factors result in significant fluctuations in profits and cash flow from period to period and over business cycles.

New capacity additions in Asia, the Middle East and North America may lead to periods of oversupply and lower profitability. A sizable number of expansions have been announced in North America. The timing and extent of any changes to currently prevailing market conditions are uncertain and supply and demand may be unbalanced at any time. As a consequence, we are unable to accurately predict the extent or duration of future industry cycles or their effect on our business, financial condition or results of operations.

We sell products in highly competitive global markets and face significant price pressures.

We sell our products in highly competitive global markets. Due to the commodity nature of many of our products, competition in these markets is based primarily on price and, to a lesser extent, on product performance, product quality, product deliverability, reliability of supply and customer service. Often, we are not able to protect our market position for these products by product differentiation and may not be able to pass on cost increases to our customers due to the significant competition in our business.

In addition, we face increased competition from companies that may have greater financial resources and different cost structures or strategic goals than us. These include large integrated oil companies (some of which also have chemical businesses), government-owned businesses, and companies that receive subsidies or other government incentives to produce certain products in a specified geographic region. Continuing competition from these companies, especially in our olefin and refining businesses, could limit our ability to increase product sales prices in response to raw material and other cost increases, or could cause us to reduce product sales prices to compete effectively, which would reduce our profitability. Competitors with different cost structures or strategic goals than we have may be able to invest significant capital into their businesses, including expenditures for research and development. In addition, specialty products we produce may become commoditized over time. Increased competition could result in lower prices or lower sales volumes, which would have a negative impact on our results of operations.

Interruptions

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Table of operations at our facilities may result in liabilities or lower operating results.

We own and operate large-scale facilities. Our operating results are dependent on the continued operation of our various production facilities and the ability to complete construction and maintenance projects on schedule. Interruptions at our facilities may materially reduce the productivity and profitability of a particular manufacturing facility, or our business as a whole, during and after the period of such operational difficulties. In the past, we had to shut down plants on the U.S. Gulf Coast, including the temporary shutdown of our Houston refinery, as a result of hurricanes striking the Texas coast.

In addition, because the Houston refinery is our only refining operation, an outage at the refinery could have a particularly negative impact on our operating results. Unlike our chemical and polymer production facilities, which may have sufficient excess capacity to mitigate the negative impact of lost production at other facilities, we do not have the ability to increase refining production elsewhere in the U.S.

Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, our operations are subject to hazards inherent in chemical manufacturing and refining and the related storage and transportation of raw materials, products and wastes. These potential hazards include:

Contents

pipeline leaks and ruptures;

explosions;

fires;

severe weather and natural disasters;

mechanical failure;

unscheduled downtimes;

supplier disruptions;

labor shortages or other labor difficulties;

transportation interruptions;

remediation complications;

increased restrictions on, or the unavailability of, water for use at our manufacturing sites or for the transport of our products or raw materials;

chemical and oil spills;

discharges or releases of toxic or hazardous substances or gases;

shipment of incorrect oroff-specification product to customers;

storage tank leaks;

other environmental risks; and

terrorist acts.

Some of these hazards may cause severe damage to or destruction of property and equipment or personal injury and loss of life and may result in suspension of operations or the shutdown of affected facilities.

Large capital projects can take many years to complete, and market conditions could deteriorate significantly between the project approval date and the project startup date, negatively impacting project returns. If we are unable to complete capital projects at their expected costs and in a timely manner, or if the market conditions assumed in our project economics deteriorate, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities could materially adversely affect our ability to achieve forecasted internal rates of return and operating results. Delays in making required changes or upgrades to our facilities could subject us to fines or penalties as well as affect our ability to supply certain products we produce. Such delays or cost increases may arise as a result of unpredictable factors, many of which are beyond our control, including:

denial of or delay in receiving requisite regulatory approvals and/or permits;

unplanned increases in the cost of construction materials or labor;

disruptions in transportation of components or construction materials;

adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers;

shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; and

nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors.

Any one or more of these factors could have a significant impact on our ongoing capital projects. If we were unable to make up the delays associated with such factors or to recover the related costs, or if market conditions change, it could materially and adversely affect our business, financial condition, results of operations and cash flows.

Increased IT security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, facilities and services.

Increased global information security threats and more sophisticated, targeted computer crime pose a risk to the confidentiality, availability and integrity of our data, operations and infrastructure. While we attempt to mitigate these risks by employing a number of measures, including security measures, employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our employees, systems, networks, products, facilities and services remain potentially vulnerable to sophisticated espionage or cyber-assault. Depending on their nature and scope, such threats could potentially lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes and operational disruptions, which in turn could adversely affect our reputation, competitiveness and results of operations.

We operate internationally and are subject to exchange rate fluctuations, exchange controls, political risks and other risks relating to international operations.

We operate internationally and are subject to the risks of doing business on a global level. These risks include fluctuations in currency exchange rates, economic instability and disruptions, restrictions on the transfer of funds and the imposition of trade restrictions or duties and tariffs.tariffs, and complex regulations concerning privacy and data security. Additional risks from our multinational business include transportation delays and interruptions, war, terrorist activities, epidemics, pandemics, political instability, import and export controls, sanctions, changes in governmental policies, labor unrest and current and changing regulatory environments.

We generate revenues from export sales and operations that may be denominated in currencies other than the relevant functional currency. Exchange rates between these currencies and functional currencies in recent years have fluctuated significantly and may do so in the future. It is possible that fluctuations in exchange rates will result in reduced operating results. Additionally, we operate with the objective of having our worldwide cash available in the locations where it is needed, including the United Kingdom for our parent company’s significant cash obligations as a result of dividend and interest payments. It is possible that we may not always be able to provide cash to other jurisdictions when needed or that such transfers of cash could be subject to additional taxes, including withholding taxes.

Our operating results could be negatively affected by the global laws, rules and regulations, as well as political environments, in the jurisdictions in which we operate. There could be reduced demand for our products, decreases in the prices at which we can sell our products and disruptions of production or other operations. Trade protection measures such as quotas, duties, tariffs, safeguard measures or anti-dumping duties imposed in the countries in which we operate could negatively impact our business. Additionally, there may be substantial

capital and other costs to comply with regulations and/or increased security costs or insurance premiums, any of which could reduce our operating results.

We obtain a portion of our principal raw materials from international sources that are subject to these same risks. Our compliance with applicable customs, currency exchange control regulations, transfer pricing regulations or any other laws or regulations to which we may be subject could be challenged. Furthermore, these laws may be modified, the result of which may be to prevent or limit subsidiaries from transferring cash to us.

Furthermore, we are subject to certain existing, and may be subject to possible future, laws that limit or may limit our activities while some of our competitors may not be subject to such laws, which may adversely affect our competitiveness.

Changes in tax laws and regulations could affect our tax rate and our results of operations.

We are a

The Company operates in multiple jurisdictions with complex legal and tax resident in the United Kingdomregulatory environments and areis subject to the United Kingdom corporate income tax system. LyondellBasell Industries N.V. has little or no taxable income of its own because, as a holding company, it does not conduct any operations. Through our subsidiaries, we have substantial operations world-wide. Taxes are primarily paid on the earnings generated in various jurisdictions, including the U.S., The Netherlands, Germany, France and Italy.

A portion of our interest income from internal financing is either untaxed or taxed at rates substantially lower than the U.S. statutory rate. In September 2016, the United Kingdom enacted provisions (the so called “anti-hybrid provisions”), effective for years beginning January 1, 2017, that resulted in changes to our internal financing structure which did not materially impact our Consolidated Financial Statements. In addition, in October 2016 the U.S. Treasury issued final Section 385 debt-equity regulations that could impact our internal financings in future years. Pursuant to a recent Executive Order, the Treasury Department reviewed these regulations and determined to delay but retain these regulations, subject to further review after the enactment of U.S. tax reform. In December 2017, the U.S. enacted “H.R.1,” also known as the “Tax Cuts and Jobs Act” (the “Tax Act”), materially impacting our 2017 Consolidated Financial Statements and significantly affecting future periods. We are awaiting Treasury’s review of the existing Section 385 debt-equity regulations which could impact our internal financings in future years as well as any new regulations pursuant to Treasury’s expanded regulatory authority under the Tax Act.

We monitor income tax developments in countries where we conduct business. Recently, there has been an increase in attention, bothtaxes in the U.S. and globally,non-U.S. jurisdictions. Significant changes to the tax practices of multinational companies, including the European Union’s state aid investigations and proposals by the Organization for Economic Cooperation and Development with respect to base erosion and profit shifting. Such attention may result in additional legislative changes that could adversely affect our tax rate. Other than the recently enacted Tax Act, management does not believe that recent changes in income tax laws willand regulations in these jurisdictions or their interpretation could have a material impact on our Consolidated Financial Statements, althougheffective income tax rate. Our future effective income tax rates could also fluctuate based on, among other factors, changes in pre-tax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, the amount of exempt income, and changes in unrecognized tax benefits associated with uncertain tax positions. Our tax returns are periodically audited or subjected to review by tax authorities, and any adverse result of these examinations could also have an impact on our effective income tax rate and our results of operations. We regularly evaluate the likelihood of an adverse result of an examination, however, there is no assurance as to the ultimate outcome and impact.

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Risks Related to Health, Safety, and the Environment
We cannot predict with certainty the extent of future costs under environmental, health and safety and other laws and regulations, and cannot guarantee they will not be material.
We may face liability arising out of the normal course of business, including alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our current or former facilities, or exposure to products or chemicals that we manufacture, handle or own. In addition, because our products are components of a variety of other end-use products, we, along with other members of the chemical industry, are subject to potential claims related to those end-use products. Any substantial increase in the success of these types of claims could negatively affect our operating results.
We are subject to extensive national, regional, state and local environmental laws, regulations, directives, rules and ordinances concerning pollution, protection of the environment, hazardous materials, health and safety, the security of our facilities, and the safety of our products. We generally expect that these requirements are likely to become more stringent over time. Changes to such laws could result in restrictions on our operations, denial of permits, loss of business opportunities, increased operating costs or additional capital expenditures. We could incur significant costs or operational restrictions due to violations of or liabilities under such laws and regulations in the form of fines, penalties, and injunctive relief. Any substantial liability under such laws could have a material adverse effect on our financial condition, results of operations and cash flows. Additionally, we are required to have permits for our businesses and are subject to licensing regulations. These permits and licenses are subject to renewal, modification and in some circumstances, revocation. Further, the permits and licenses are often difficult, time consuming and costly to obtain and could contain conditions that limit our operations.
We may incur substantial costs to comply with climate change legislation and related regulatory initiatives.
There has been a broad range of proposed or promulgated international, national and state laws focusing on greenhouse gas (“GHG”) emission reduction and global climate change. These proposed or promulgated laws apply or could apply in countries where we have interests or may have interests in the future. Laws and regulations in this field continue to evolve and, while they are likely to be increasingly widespread and stringent, at this stage it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation. Under the 2015 Paris Agreement, parties to the United Nations Framework Convention on Climate Change agreed to undertake ambitious efforts to reduce GHG emissions and strengthen adaptation to the effects of climate change.
Jurisdictions in which we operate, including, in particular, the European Union (EU), are preparing national legislation and protection plans to implement their emission reduction commitments under the Paris Agreement. In June 2021, the European Climate Law set legally binding targets of net zero GHG emissions by 2050, and a 55% reduction in GHG emissions by 2030. In December 2022, the EU announced forthcoming regulations to support the 2030 climate target, including a revision of the EU Emissions Trading System (ETS), and the introduction of a Carbon Border Adjustment Mechanism. Our operations in Europe participate in the ETS and we meet our obligations through a combination of free and purchased emission allowances. We anticipate the forthcoming regulations will result in an accelerated reduction of our free allowances and higher market prices for purchased allowances. These and other future regulations could result in increased costs, additional capital expenditures, and/or restrictions on operations.
In the U.S., addressing climate change is a stated priority of President Biden, and in February 2021, the U.S. recommitted to the Paris Agreement after having withdrawn in August 2017. The U.S. Environmental Protection Agency as well as several state governments have promulgated regulations directed at GHG emissions reductions from certain types of facilities. Additional regulations could be forthcoming at the U.S. federal or state level that could result in increased operating costs for compliance, required acquisition or trading of emission allowances, or compliance costs associated with additional regulatory frameworks for a range of potential carbon reduction projects, including carbon capture, use, and sequestration projects. Additionally, demand for the products we produce may be reduced.
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Non-Governmental Organizations have been active in filing lawsuits against governments and private parties in various jurisdictions around the world seeking enforcement of existing laws and new requirements to reduce GHG emissions. In one case decided in the Netherlands in May 2021, plaintiffs obtained a ruling ordering Royal Dutch Shell to reduce its Scope 1, 2 and 3 carbon emissions by 45% by 2030. These types of laws, regulations, and litigation results could increase the cost of purchased energy and increase costs of compliance in various locations.
Compliance with climate regulations may result in increased permitting necessary for the operation of our business or proposedfor any of our growth plans. Difficulties in obtaining such permits could have an adverse effect on our future growth. In addition, any future potential climate regulations, legislation, or litigation results could impose additional operating restrictions or delays in implementing growth projects or other capital investments, require us to incur increased costs, and could have a material adverse effect on our business and results of operations.

Legislation and regulatory initiatives could lead to a decrease in demand for our products.
New or revised governmental regulations and independent studies relating to the effect of our products on health, safety and the environment may affect demand for our products and the cost of producing our products. Initiatives by governments and private interest groups will potentially result in increased toxicological testing and risk assessments of a wide variety of chemicals, including chemicals used or produced by us. New or revised legislation or regulations could result in additional use restrictions and/or bans of certain chemicals. For example, in the EU, the European Commission as part of its Green Deal published the Chemicals Strategy for Sustainability Towards a Toxic-Free Environment (“CSS”). The CSS sets forth far-reaching plans for introducing significant changes to tax lawsthe EU regulatory frameworks for chemicals including the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”), and the Classification, Labelling and Packaging Regulation (“CLP”) that could result in increased compliance costs, additional restrictions, and/or bans of chemicals used or produced by us. In the U.S., changes to the U.S. Environmental Protection Agency’s risk evaluation process under the Toxic Substances Control Act (“TSCA”) could also result in additional restrictions and/or bans of chemicals used or produced by us.
Assessments under TSCA, REACH or similar programs or regulations in other state or national jurisdictions may result in heightened concerns about the chemicals we use or produce and may result in additional requirements or bans being placed on the production, handling, labeling or use of those chemicals. Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand for these products. Such a decrease in demand could have an adverse impact on our business and results of operations.
The physical impacts of climate change can negatively impact our facilities and operations.
Potential physical impacts of climate change include increased frequency and severity of hurricanes and floods as well as freezing conditions, tornadoes, and global sea level rise. Although we have preparedness plans in place designed to minimize impacts and enhance safety, should an event occur, it could have the potential to disrupt our supply chain and operations. A number of our facilities are located on the U.S. Gulf Coast, which has been impacted by hurricanes that have required us to temporarily shut down operations at those sites. Our sites rely on rivers for transportation that may experience restrictions in times of drought or other unseasonal weather variation. In addition, scarcity of water and drought conditions due to climate change could reduce the availability of fresh water needed to produce our products which could increase our costs of operations.
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Increased regulation or deselection of plastic could lead to a decrease in demand growth for some of our products.
There is a growing concern with the accumulation of plastic, including microplastics, and plastic waste in the environment. Additionally, plastics have recently faced increased public backlash and scrutiny, as well as governmental investigations and enforcement, and private litigation. Policy measures to address this concern are being discussed or implemented by governments at all levels. For example, on March 2, 2022, the United Nations Environment Assembly adopted a resolution to develop a new international legally binding instrument on plastic pollution with the ambition to complete the negotiations by the end of 2024. The European Union has been undertaking a series of actions under its Circular Economy Action Plan, including adoption of the Single Use Plastics Directive in 2019, which introduced policy measures for single use plastics including bans, product design requirements, extended producer responsibility obligations, and labeling requirements, and adoption of a proposed Packaging and Packaging Waste Regulation in 2022. In addition, a host of single-use plastic bans and taxes have been passed by countries around the world and states and municipalities throughout the U.S. Consumer deselection, increased regulation of, or prohibition on, the manufacturing or use of plastic or plastic products could limit the use of these products or increase the costs incurred by our customers to use such products, and could lead to a decrease in demand for PE, PP, and other products we make. Such a decrease in demand could adversely affect our tax liabilitiesbusiness, operating results, and financial condition.
Failure to effectively and timely achieve our GHG emissions reduction goals could damage our reputation and have an adverse effect on the demand for our products.
In December 2022, we announced that we were increasing our GHG emissions reduction targets for 2030, while maintaining our previously announced goal to achieve net zero scope 1 and 2 GHG emissions by 2050. Our ability to achieve these goals depends on many factors, including the availability of technology, our ability to secure permits and emissions credits, evolving regulatory requirements, competitor actions, customer preferences, and our ability to reduce emissions from our operations through modernization and innovation, reduce the emissions intensity of the electricity we buy, and invest in renewables and low carbon energy. We may also not timely adapt to changes or methods in carbon pricing that could increase our costs and reduce our competitiveness. The cost associated with our GHG emissions reduction goals could be significant. Failure to achieve our emissions targets could result in reputational harm, enforcement or litigation, changing investor sentiment regarding investment in LyondellBasell or a negative impact on access to and cost of capital.
Failure to achieve our circularity goals could have an adverse effect on the demand for our products.
In September 2020, we announced a circularity goal of marketing at least two million metric tons of recycled and renewable-based polymers annually by 2030. Many of our customers also have goals to increase the recycled and renewable content in their own products and packaging. Our ability to achieve this goal depends on many factors, including the availability of collection and sortation infrastructure, evolving regulations on chemical recycling and recycled content, our ability to grow our circular and low carbon solutions business established in 2022, make investments in new technologies, expand the global footprint of our recycling facilities and joint ventures, secure access to feedstock, and manufacture recycled and low carbon products at commercial scale.
General Risk Factors
The COVID-19 pandemic could materially adversely affect our financial condition and results of operations.
In early 2020, responses to the COVID-19 pandemic caused significant economic disruption and adversely impacted the global economy, leading to reduced consumer spending and volatility in the future.

global financial and commodities markets. The return to pre-pandemic economic activity continues to depend on the severity and transmission rate of the virus, the continued effectiveness of vaccines and treatments, and policy decisions made by governments in reaction to evolving local conditions. Any further global supply chain or economic disruption as a result of COVID-19 could have a material negative impact on our business, results of operations, access to sources of liquidity and financial condition.

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Increased IT and cybersecurity threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, data, products, facilities and services.
Increased global information cybersecurity threats and more sophisticated, targeted computer crime pose a risk to the confidentiality, availability and integrity of our data, operations and infrastructure. While we attempt to mitigate these risks by employing a number of measures, including security measures, employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our employees, systems, networks, products, facilities and services remain potentially vulnerable to ransomware, sophisticated espionage or cyber-assault. Depending on their nature and scope, such threats could potentially lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes and operational disruptions, which in turn could adversely affect our reputation, competitiveness and results of operations.
Many of our businesses depend on our intellectual property. Our future success will depend in part on our ability to develop new technologies and protect our intellectual property rights, and our inability to do so could reduce our ability to maintain our competitiveness and margins.

We have a significant worldwide patent portfolio of issued and pending patents. Thesepatents and our future results could be impacted by our ability to successfully develop and protect new processes and technologies. Our patents and patent applications, together with proprietary technicalknow-how, are significant to our competitive position, particularly with regard to PO, performanceintermediate chemicals, petrochemicalspolyolefins, licensing and polymers.catalysts. We rely on the patent, copyright and trade secret laws of the countries in which we operate to protect our investment in research and development, manufacturing and marketing. We operate plants, sell catalysts and products, participate in joint ventures, and license our process technology in many foreign jurisdictions, including those having heightened risks for intellectual property. In some of these instances, we must disclose at least a portion of our technology to third parties or regulatory bodies. In these cases, we rely primarily on contracts and trade secret laws to protect the associated trade secrets. However, we may be unable to prevent third parties from using our intellectual property without authorization. Proceedings to protect these rights could be costly, and we may not prevail.

The failure of our patents or confidentiality agreements to protect our processes, apparatuses, technology, trade secrets or proprietaryknow-how could result in significantly lower revenues, reduced profit margins and cash flows and/or loss of market share. We also may be subject to claims that our technology, patents or other intellectual property infringes on a third party’s intellectual property rights. Unfavorable resolution of these claims could result in restrictions on our ability to deliver the related service or in a settlement that could be material to us.

Shared control or lack of control of joint ventures may delay decisions or actions regarding the joint ventures.

A portion of our operations are conducted through joint ventures, where control may be exercised by or shared with unaffiliated third parties. We cannot control the actions of our joint venture partners, including any nonperformance, default or bankruptcy of joint venture partners. The joint ventures that we do not control may also lack financial reporting systems to provide adequate and timely information for our reporting purposes.

Our joint venture partners may have different interests or goals than we do and may take actions contrary to our requests, policies or objectives. Differences in views among the joint venture participants also may result in delayed decisions or in failures to agree on major matters, potentially adversely affecting the business and operations of the joint ventures and in turn our business and operations. We may develop a dispute with any of our partners over decisions affecting the venture that may result in litigation, arbitration or some other form of dispute resolution. If a joint venture participant acts contrary to our interest, it could harm our brand, business, results of operations and financial condition.

We cannot predict with certainty the extent of future costs under environmental, health and safety and other laws and regulations, and cannot guarantee they will not be material.

We may face liability arising out of the normal course of business, including alleged personal injury or property damage due to exposure to chemicals or other hazardous substances at our current or former facilities or chemicals that we manufacture, handle or own. In addition, because our products are components of a variety of otherend-use products, we, along with other members of the chemical industry, are subject to potential claims related to thoseend-use products. Any substantial increase in the success of these types of claims could negatively affect our operating results.

We (together with the industries in which we operate) are subject to extensive national, regional, state and local environmental laws, regulations, directives, rules and ordinances concerning:

emissions to the air;

discharges onto land or surface waters or into groundwater; and

the generation, handling, storage, transportation, treatment, disposal and remediation of hazardous substances and waste materials.

Many of these laws and regulations provide for substantial fines and potential criminal sanctions for violations. Some of these laws and regulations are subject to varying and conflicting interpretations. In addition, some of these laws and regulations require us to meet specific financial responsibility requirements. Any substantial liability for environmental damage could have a material adverse effect on our financial condition, results of operations and cash flows.

Although we have compliance programs and other processes intended to ensure compliance with all such regulations, we are subject to the risk that our compliance with such regulations could be challenged.Non-compliance with certain of these regulations could result in the incurrence of additional costs, penalties or assessments that could be material.

Our industry is subject to extensive government regulation, and existing, or future regulations may restrict our operations, increase our costs of operations or require us to make additional capital expenditures.

Compliance with regulatory requirements could result in higher operating costs, such as regulatory requirements relating to emissions, the security of our facilities, and the transportation, export or registration of our products. We generally expect that regulatory controls worldwide will become increasingly more demanding, but cannot accurately predict future developments.

Increasingly strict environmental laws and inspection and enforcement policies, could affect the handling, manufacture, use, emission or disposal of products, other materials or hazardous andnon-hazardous waste. Stricter environmental, safety and health laws, regulations and enforcement policies could result in increased operating costs or capital expenditures to comply with such laws and regulations. Additionally, we are required to have permits for our businesses and are subject to licensing regulations. These permits and licenses are subject to renewal, modification and in some circumstances, revocation. Further, the permits and licenses are often difficult, time consuming and costly to obtain and could contain conditions that limit our operations.

We may incur substantial costs to comply with climate change legislation and related regulatory initiatives.

There has been a broad range of proposed or promulgated state, national and international laws focusing on greenhouse gas (“GHG”) reduction. These proposed or promulgated laws apply or could apply in countries where we have interests or may have interests in the future. Laws and regulations in this field continue to evolve and, while they are likely to be increasingly widespread and stringent, at this stage it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation. Within the framework of the EU emissions trading scheme (“ETS”), we were allocated certain allowances of carbon dioxide for the affected plants of our European sites for the period from 2008 to 2012 (“ETS II period”). The ETS II period did not bring additional cost to us as the allowance allocation was sufficient to cover the actual emissions of the affected plants. We were able to build an allowance surplus during the ETS II period which has been banked to the scheme for the period from 2013 to 2020 (“ETS III period”). We expect to incur additional costs for the ETS III period, despite the allowance surplus accrued over the ETS II period, as allowance allocations have been reduced for the ETS III period and more of our plants are affected by the scheme. We maintain an active hedging strategy to cover these additional costs. We expect to incur additional costs in relation to future carbon or GHG emission trading schemes.

In the U.S., the Environmental Protection Agency (the “EPA”) has promulgated federal GHG regulations under the Clean Air Act affecting certain sources. The EPA has issued mandatory GHG reporting requirements, requirements to obtain GHG permits for certain industrial plants and proposals for GHG performance standards for some facilities. The recent EPA action could be a precursor to further federal regulation of carbon dioxide emissions and other greenhouse gases, and may affect the outcome of other climate change lawsuits pending in U.S. courts in a manner unfavorable to our industry. In any event, additional regulation may be forthcoming at the U.S. federal or state level with respect to GHG emissions, and such regulation could result in the creation of additional costs in the form of taxes or required acquisition or trading of emission allowances.

Compliance with these or other changes in laws, regulations and obligations that create a GHG emissions trading scheme or GHG reduction policies generally could significantly increase our costs or reduce demand for products we produce. Additionally, compliance with these regulations may result in increased permitting necessary for the operation of our business or for any of our growth plans. Difficulties in obtaining such permits could have an adverse effect on our future growth. Therefore, any future potential regulations and legislation could result in increased compliance costs, additional operating restrictions or delays in implementing growth projects or other capital investments, and could have a material adverse effect on our business and results of operations.

We may be required to record material charges against our earnings due to any number of events that could cause impairments to our assets.

We may be required to reduce production or idle facilities for extended periods of time or exit certain businesses as a result of the cyclical nature of our industry. Specifically, oversupplies of or lack of demand for particular products or high raw material prices may cause us to reduce production. We may choose to reduce production at certain facilities because we haveoff-take arrangements at other facilities, which make any reductions or idling unavailable at those facilities. Any decision to permanently close facilities or exit a business likely would result in impairment and other charges to earnings.

Temporary outages at our facilities can last for several quarters and sometimes longer. These outages could cause us to incur significant costs, including the expenses of maintaining and restarting these facilities. In addition, even though we may reduce production at facilities, we may be required to continue to purchase or pay for utilities or raw materials undertake-or-pay supply agreements.

Our business is capital intensive and we rely on cash generated from operations and external financing to fund our growth and ongoing capital needs. Limitations on access to external financing could adversely affect our operating results.

We require significant capital to operate our current business and fund our growth strategy. Moreover, interest payments, dividends and the expansion of our business or other business opportunities may require significant amounts of capital. We believe that our cash from operations currently will be sufficient to meet these needs. However, if we need external financing, our access to credit markets and pricing of our capital is dependent upon maintaining sufficient credit ratings from credit rating agencies and the state of the capital markets generally. There can be no assurances that we would be able to incur indebtedness on terms we deem acceptable, and it is possible that the cost of any financings could increase significantly, thereby increasing our expenses and decreasing our net income. If we are unable to generate sufficient cash flow or raise adequate external financing, including as a result of significant disruptions in the global credit markets, we could be forced to restrict our operations and growth opportunities, which could adversely affect our operating results.

We may use our five-year, $2.5 billion revolving credit facility, which backs our commercial paper program, to meet our cash needs, to the extent available. As of December 31, 2017, we had no borrowings or letters of credit outstanding under the facility and no borrowings under our commercial paper program, leaving an unused and available credit capacity of $2,500 million. We may also meet our cash needs by selling receivables under our $900 million U.S. accounts receivable securitization facility. In the event of a default under our credit facility or any of our senior notes, we could be required to immediately repay all outstanding borrowings and make cash deposits as collateral for all obligations the facility supports, which we may not be able to do. Any default under any of our credit arrangements could cause a default under many of our other credit agreements and debt instruments. Without waivers from lenders party to those agreements, any such default could have a material adverse effect on our ability to continue to operate.

Legislation and regulatory initiatives could lead to a decrease in demand for our products.

New or revised governmental regulations and independent studies relating to the effect of our products on health, safety and the environment may affect demand for our products and the cost of producing our products. Initiatives by governments and private interest groups will potentially require increased toxicological testing and risk assessments of a wide variety of chemicals, including chemicals used or produced by us. For example, in the United States, the National Toxicology Program (“NTP”) is a federal interagency program that seeks to identify and select for study chemicals and other substances to evaluate potential human health hazards. In the European Union, the Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals (“REACH”) is regulation designed to identify the intrinsic properties of chemical substances, assess hazards and risks of the substances, and identify and implement the risk management measures to protect humans and the environment.

Assessments under NTP, REACH or similar programs or regulations in other jurisdictions may result in heightened concerns about the chemicals we use or produce and may result in additional requirements being placed on the production, handling, labeling or use of those chemicals. Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products and otherwise limit the use of these products, which could lead to a decrease in demand for these products. Such a decrease in demand could have an adverse impact on our business and results of operations.

Adverse results of legal proceedings could materially adversely affect us.

We are subject to and may in the future be subject to a variety of legal proceedings and claims that arise out of the ordinary conduct of our business. Results of legal proceedings cannot be predicted with certainty. Irrespective of its merits, litigation may be both lengthy and disruptive to our operations and may cause significant expenditure and diversion of management attention. We may be faced with significant monetary damages or injunctive relief against us that could have an adverse impact on our business and results of operations should we fail to prevail in certain matters.

If we lose key employees or are unable to attract and retain the employees we need, our business and operating results could be adversely affected.
Our success depends on our ability to attract and retain key personnel, and we rely heavily on our management team. The inability to recruit and retain key personnel or the unexpected loss of key personnel may adversely affect our operations. In addition, because of the reliance on our management team, our future success depends in part on our ability to identify and develop talent to succeed senior management. The retention of key personnel and appropriate senior management succession planning will continue to be critically important to the successful implementation of our strategies.
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There is substantial and continuous competition for diverse, talented engineering, manufacturing, and operations employees. We may not be successful in attracting and retaining such personnel, and we may experience increased compensation and training costs that may not be offset by either improved productivity or higher sales. We have from time to time experienced, and we may continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, and may not be able to fill positions in desired geographic areas or at all.
Significant changes in pension fund investment performance or assumptions relating to pension costs may adversely affect the valuation of pension obligations, the funded status of pension plans, and our pension cost.

Our pension cost is materially affected by the discount rates used to measure pension obligations, the level of plan assets available to fund those obligations at the measurement date and the expected long-term rates of return on plan assets. Significant changes in investment performance or a change in the portfolio mix of invested assets may result in corresponding increases and decreases in the value of plan assets, particularly equity securities, or in a change of the expected rate of return on plan assets. Any changes in key actuarial assumptions, such as the discount rate or mortality rate, would impact the valuation of pension obligations, affecting the reported funded status of our pension plans as well as the net periodic pension cost in the following fiscal years.

Nearly all

Many of our current pension plans have projected benefit obligations that exceed the fair value of the plan assets. As of December 31, 2017,2022, the aggregate deficit was $903$662 million. Any declines in the fair values of the pension plans’ assets could require additional payments by us in order to maintain specified funding levels.

Our pension plans are subject to legislative and regulatory requirements of applicable jurisdictions, which could include, under certain circumstances, local governmental authority to terminate the plan.

Integration of acquisitions could disrupt our business

See Note 14 to the Consolidated Financial Statements for additional information regarding pensions and harm our financial condition and stock price.

We may make acquisitions in order to enhance our business. On February 15, 2018, we entered into a definitive agreement to acquire A. Schulman. Acquisitions involve numerous risks, including problems combining the purchased operations, technologies or products, unanticipated costs and liabilities, diversion of management’s attention from our core businesses, and potential loss of key employees.

There can be no assurance that we will be able to integrate successfully any businesses, products, technologies, or personnel that we might acquire. The integration of businesses that we may acquire is likely to be a complex, time-consuming, and expensive process and we may not realize the anticipated revenues or other benefits associated with our acquisitions if we do not manage and operate the acquired business up to our expectations. If we are unable to efficiently operate as a combined organization utilizing common information and communication systems, operating procedures, financial controls, and human resources practices, our business, financial condition, and results of operations may be adversely affected.

Item 1B.Unresolved Staff Comments.

post-retirement benefits.

Item 1B.Unresolved Staff Comments.
None.

Item 3.Legal Proceedings.

Item 3.     Legal Proceedings.
Environmental Matters

From time to time, we and our joint ventures receive notices or inquiries from government entities regarding alleged violations of environmental laws and regulations pertaining to, among other things, the disposal, emission and storage of chemical and petroleum substances, including hazardous wastes. Item 103 of the SEC’s RegulationS-K requiresU.S. Securities and Exchange Commission rules require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that we reasonably believe could exceed $100,000.$300,000. The matters below are disclosed solely pursuant to that requirement.

requirement and we do not believe that any of these proceedings will have a material impact on the Company’s Consolidated Financial Statements.

In September 2013,connection with an enforcement initiative of EPA regarding flare emissions at petrochemical plants, we have settled with EPA and the LouisianaU.S. Department of Environmental Quality (the “LDEQ”)Justice in order to resolve claims initiated in July 2014, related to alleged improper operation and maintenance of flares at four of our U.S. facilities. The consent decree related to the settlement was entered by the U.S. District Court for the Southern District of Texas in January 2022. Under the terms of the settlement, we paid a penalty of $3.4 million in January 2022 and will conduct fence line monitoring and make investments in equipment at the facilities. The consent decree was amended in September 2022 to include flares at an additional facility, including a penalty of $324,000 that we paid in October 2022.
In March 2018, the Cologne, Germany local court issued a Compliance Orderregulatory fine notice of €1.8 million arising from a pipeline leak near our Wesseling, Germany facility. We expect the Cologne prosecutor to issue a corresponding payment request, which will resolve the matter.
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In February 2020, the State of Texas filed suit against Houston Refining, LP, a subsidiary of LyondellBasell, in Travis County District Court seeking civil penalties and Noticeinjunctive relief for violations of Potential Penaltythe Texas Clean Air Act related to Equistar Chemicals, LP pertainingseveral emission events. In July 2020, Harris County, Texas petitioned to intervene in the lawsuit and the State added additional claims to its petition relating to self-reported deviations arising from our Lake Charles, Louisiana polyolefins plant and relatingof Houston Refining’s air operating permit. We are currently engaged in settlement negotiations to certain Clean Air Act Title V permit conditions, limits and other requirements. The matter involves deviations reported by us toresolve the LDEQ in semi-annual reports covering 2007 through June 2011. We reasonably believe that LDEQ may assert an administrative penalty demand in this matter in excess of $100,000.

In September 2013, the EPA Region V issued a Notice and Finding of Violation alleging violations at our Morris, Illinois facility related to flaring activity. The Notice generally alleges failures to monitor steam usage and improper flare operations. Region V indicated at a December 2017 meeting that it intends to issue an administrative enforcement order in 2018. We reasonably believe that EPA Region V may assert a penalty demand in excess of $100,000.

In June 2014, EPA Region V issued a Notice and Finding of Violation alleging violations at our Tuscola, Illinois facility related to flaring activity. The Notice generally alleges failure to conduct a valid performance test and improper flare operations. Region V indicated at a December 2017 meeting that it intends to issue an administrative enforcement order in 2018. We reasonably believe that EPA Region V may assert a penalty demand in excess of $100,000.

In August 2015 the Victoria plant experienced a hexane leak into the cooling water system which resulted in estimated emissions of 154,000matter.

On July 27, 2021, approximately 160,000 pounds of hexane overliquid process material containing primarily acetic acid was released from a12-day period from reactor at the cooling water pond operated by the site host, Invista.La Porte acetic acid unit. In November 2017,October 2021, the Texas Commission on Environmental Quality (the “TCEQ”(“TCEQ”) issued a proposed agreed orderNotice of Enforcement for the incident. In November 2021, the State of Texas filed a petition on behalf of the TCEQ seeking injunctive relief and civil penalties for unauthorized air pollution and regulatory nuisance related to both Invista and Equistar assessing a proposed penalty of $300,000.the incident. We are currently engaged in settlement discussions with TCEQ.

the State to resolve this matter.

In March 2017,April 2022, the TCEQ issued a proposed Agreed OrderState of Texas filed suit against Equistar Chemicals, LP, in Travis County District Court seeking civil penalties and injunctive relief for alleged violations of the Texas Clean Air Act related to Houston Refining LP. The proposed Agreed Order stems from agency record reviews conducted from May to July 2016 and September to October 2016 and an agency investigation conducted in April 2016. In June 2017, TCEQ issued a revised Agreed Order that carries a total administrative penalty of $77,626. The Agreed Order is currently awaiting final TCEQ approval.

multiple emissions events at Equistar’s Bayport Plant.

Litigation and Other Matters

Information regarding our litigation and other legal proceedings can be found in Note 18,Commitments and Contingencies,17 to the Consolidated Financial Statements.

Item 4.Mine Safety Disclosures.

Item 4.Mine Safety Disclosures.
Not applicable.

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PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Item 5.     Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.
Market and Dividend Information

Our shares were listed on the New York Stock Exchange (“NYSE”) on October 14, 2010 under the symbol “LYB.” The high and low sales prices for our ordinary shares and the cash dividends per share declared for the two most recent fiscal years are shown in the table below.

   High   Low   Cash Dividends
Declared		 

2017

      

First Quarter

  $97.64   $85.66   $0.85 

Second Quarter

   92.03    78.01    0.90 

Third Quarter

   100.69    82.54    0.90 

Fourth Quarter

   111.62    96.20    0.90 

2016

      

First Quarter

  $89.99   $69.10   $0.78 

Second Quarter

   93.75    69.82    0.85 

Third Quarter

   81.75    71.48    0.85 

Fourth Quarter

   92.68    76.71    0.85 

The payment of dividends or distributions in the future will be subject to the requirements of Dutch law and the discretion of our Management Board and our Supervisory Board.of Directors. The declaration of any future cash dividends and, if declared, the amount of any such dividends, will depend upon general business conditions, our financial condition, our earnings and cash flow, our capital requirements, financial covenants and other contractual restrictions on the payment of dividends or distributions.

There

We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations. However, there can be no assurance that any dividends or distributions will be declared or paid in the future.

Holders

As of February 20, 2018,21, 2023, there were approximately 6,1005,200 record holders of our shares, including Cede & Co. as nominee of the Depository Trust Company.

Equity Compensation Plan
See Part III, Item 11. Executive Compensation for information relating to the Company’s equity compensation plans.
United Kingdom Tax Considerations

In May 2013, we announced the planned migration of the tax domicile of LyondellBasell Industries N.V. from The Netherlands, where LyondellBasell Industries N.V. is incorporated, to the United Kingdom. On August 28, 2013, the Dutch and the United Kingdom competent authorities completed a mutual agreement procedure and issued a ruling that retroactively as of July 1, 2013 LyondellBasell Industries N.V. should be treated solely as a tax resident in the United Kingdom and is subject to the United Kingdom corporate income tax system.

As a result of its United Kingdom tax residency, dividend distributions by LyondellBasell Industries N.V. to its shareholders are not subject to withholding tax, as the United Kingdom currently does not levy a withholding tax on dividend distributions.

Performance Graph

The performance graph and the information contained in this section is not “soliciting material,” is being furnished, not filed, with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.

The graph below shows the relative investment performance of LyondellBasell Industries N.V. shares, the S&P 500 Index and the S&P 500 Chemicals Index since December 31, 2012.2017. The graph assumes that $100 was invested on December 31, 20122017 and any dividends paid were reinvested at the date of payment. The graph is presented pursuant to SEC rules and is not meant to be an indication of our future performance.

   12/31/2012  12/31/2013  12/31/2014  12/31/2015  12/31/2016  12/31/2017

LyondellBasell Industries N.V.

  $100.00  $144.73  $147.38  $166.73  $171.33  $228.66

S&P 500 Index

  $100.00  $132.39  $150.51  $152.59  $170.84  $208.14

S&P 500 Chemicals Index

  $100.00  $131.80  $145.91  $139.81  $154.01  $195.08

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lyb-20221231_g2.jpg
12/31/201712/31/201812/31/201912/31/202012/31/202112/31/2022
LyondellBasell Industries N.V.$100.00$78.31$93.50$95.97$100.84$99.85
S&P 500 Index$100.00$95.62$125.72$148.85$191.58$156.88
S&P 500 Chemicals Index$100.00$88.39$107.85$127.31$160.30$142.24
Issuer Purchases of Equity Securities

2017 Period

Total Number
of Shares
Purchased		Average Price
Paid per Share		Total Number of
Shares Purchased
as Part of Publicly
Announced  Plans
or Programs		Maximum Number
of Shares That May Yet
Be Purchased Under  the
Plans or Programs

October 1—October 31

—  $—  —  33,570,716

November 1—November 30

—  $—  —  33,570,716

December 1—December 31

—  $—  —  33,570,716

Total

—  $—  —  33,570,716

On May 24, 2017, we announced27, 2022, our shareholders approved a share repurchase programauthorization of up to 40,087,63334,026,947 of our ordinary shares, through November 23, 2018.27, 2023, which superseded any prior repurchase authorizations. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased.

Item 6.Selected Financial Data.

The following selected financial data was derived from our consolidated financial statements, which were prepared from our books and records. This data should be read in conjunction with the Consolidated Financial Statements and related notes thereto and “Management’s

Item 6.     Reserved
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Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations,” below, which includes a discussion of factors that will enhance an understanding of this data.

   Year Ended December 31, 

In millions of dollars, except per share data

  2017  2016  2015  2014  2013 

Results of operations data:

      

Sales and other operating revenues

  $34,484  $29,183  $32,735  $45,608  $44,062 

Operating income(a)

   5,460   5,060   6,122   5,736   5,102 

Interest expense(b)

   (491)   (322)   (310)   (352)   (309) 

Income from equity investments

   321   367   339   257   203 

Income from continuing operations(a)(b)(c)

   4,895   3,847   4,479   4,172   3,860 

Earnings per share from continuing operations:

      

Basic

   12.28   9.17   9.63   8.04   6.81 

Diluted

   12.28   9.15   9.60   8.00   6.76 

Loss from discontinued operations, net of tax

   (18)   (10)   (5)   (4)   (7) 

Loss per share from discontinued operations:

      

Basic

   (0.05)   (0.02)   (0.01)   (0.01)   (0.01) 

Diluted

   (0.05)   (0.02)   (0.01)   (0.01)   (0.01) 

Balance sheet data:

      

Total assets

   26,206   23,442   22,757   24,221   27,230 

Short-term debt

   68   594   353   346   58 

Long-term debt(d)

   8,551   8,387   7,675   6,699   5,709 

Cash and cash equivalents

   1,523   875   924   1,031   4,450 

Short-term investments

   1,307   1,147   1,064   1,593   —   

Accounts receivable

   3,539   2,842   2,517   3,448   4,030 

Inventories

   4,217   3,809   4,051   4,517   5,279 

Working capital

   4,861   4,122   4,386   4,901   5,737 

Cash flow data:

      

Cash provided by (used in):

      

Operating activities

   5,206   5,606   5,842   6,048   4,835 

Investing activities

   (1,756)   (2,301)   (1,046)   (3,539)   (1,597) 

Expenditures for property, plant and equipment

   (1,547)   (2,243)   (1,440)   (1,499)   (1,561) 

Financing activities

   (2,859)   (3,349)   (4,850)   (5,907)   (1,589) 

Dividends declared per share

   3.55   3.33   3.04   2.70   2.00 

(a)Operating income and Income from continuing operations in 2017 include a pretax gain of $108 million ($103 million, after tax) on the sale of our 27% interest in Geosel, a joint venture in France; a pretax gain of $31 million ($20 million, after tax) on the sale of our Lake Charles, Louisiana site; and a pretax,non-cash gain related to the elimination of an obligation associated with a lease of $ 21 million ($14 million, after tax). In 2016, they also included a pretax andafter-tax gain of $78 million on the sale of our wholly owned Argentine subsidiary and a pretax charge of $58 million ($37 million, after tax) for a pension settlement. Operating income and Income from continuing operations in 2016, 2015 and 2014 included pretax,non-cash charges of $29 million ($18 million, after tax), $548 million ($351 million, after tax) and $760 million ($483 million, after tax), respectively, related to lower of cost or market (“LCM”) inventory valuation adjustments.
(b)Interest expense and Income from continuing operations in 2017 includes pretax charges of $113 million ($106 million, after tax) related to the redemption of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019.

(c)Income from continuing operations in 2017 includes an $819 millionnon-cash tax benefit related to the lower federal income tax rate resulting from the newly enacted U.S. Tax Cuts and Jobs Act. In 2016, it included $135 million of out of period adjustments related to taxes on our cross-currency swaps and deferred liabilities related to some of our consolidated subsidiaries. Income from continuing operations in 2013 included a $353 million benefit related to the release of valuation allowances primarily associated with tax losses in our French group.
(d)Long-term debt includes current maturities of long-term debt.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Operations.

GENERAL

This discussion should be read in conjunction with the information contained in our Consolidated Financial Statements, and the accompanying notes elsewhere in this report. When we useUnless otherwise indicated, the terms“Company,” “we,” “us,” “our” or similar words in this discussion, unless the context otherwise requires, we are referringused to refer to LyondellBasell Industries N.V. andtogether with its consolidated subsidiaries.

OVERVIEW

We demonstratedsubsidiaries (“LyondellBasell N.V.”).

The discussion summarizing the strengthsignificant factors affecting the results of operations and financial condition for the year ended December 31, 2020 and for the year ended December 31, 2021 compared to 2020 have been excluded from this Form 10-K and can be found in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our earnings performance under dynamicAnnual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission on February 24, 2022, of which Item 7 is incorporated herein by reference.
OVERVIEW
In 2022, our balanced business portfolio, consistent cash generation and strong balance sheet enabled us to successfully navigate through challenging market conditions in 2017 with increased volumes, improved EBITDAwhile continuing to provide significant returns for our shareholders. During the year, petrochemical markets were pressured by high and higher earnings relative to 2016. The complementary performance ofvolatile energy and feedstock costs as well as reduced global demand for our products. Our O&P—Americas&P-Americas and O&P—EAI&P-EAI segments combined with the relative stability of ourencountered headwinds from reduced demand in Europe and Asia as well as global capacity additions. Our I&D segment’s portfolio provided a resilient platform for profitability in 2017. Global operating rates remained strong in 2017 due to delays in new capacity, a volume shortfallsegment benefited from Hurricane Harvey and an improving market in China. Our reliable performance during the year positioned us to capture market opportunities as they arose. We also advanced our growth program by commencing construction on our new Hyperzone high-density polyethylene plant in La Porte, Texas and reaching a final investment decision for a world-scale PO/TBA plant.

Significant items that affected 2017 results include:

Improved Olefins and Polyolefins—Americas (“O&P—Americas”) results driven by the impact of higher olefins volumes relative to 2016 following completion of our Corpus Christi expansion in late 2016;

Higher Olefins and Polyolefins—Europe, Asia, International (“O&P—EAI”) segment results on higher olefinsimproved oxyfuels margins and increased volumes on most products, partlywhich were partially offset by lower polyethylene margins;

Higher Intermediatesmargins for other products due to lower demand. Margins in our Refining segment benefited from increased global mobility and Derivatives (“I&D”) segment results driven mainly by higher intermediate chemicals margins; and

favorable markets.

Better crude processing rates, withDuring 2022 we generated $6.1 billion in cash from operating activities. We remain committed to a less unfavorable impact from planned and unplanned maintenance at our Houston refinery, and higher industry refining margins relativedisciplined approach to 2016.

Other noteworthy items during 2017 include the following:

Non-cash benefit of $819 million recognizedcapital allocation. In 2022, approximately $1.9 billion was reinvested in the fourth quarter of 2017 relatedbusiness and $3.7 billion was returned to the lower federal income tax rate resulting from the newly enacted U.S. Tax Cutsshareholders through quarterly dividends, a special dividend and Jobs Act;

share repurchases.

Senior unsecured debt rating raised to BBB+ from BBB by Standard and Poor’s Rating Services in September 2017, matching our corporate investment-grade rating;

Final investment decision announced in July 2017 to buildIn 2022, we launched a world-scale PO/TBA plant in Texas with a capacity of 1 billion pounds of PO and 2.2 billion pounds of TBA. Construction is expected to commence in the second half of 2018;

Increased quarterly dividend from $0.85 to $0.90 in May 2017;

Issued $1,000 million of 3.5% guaranteed notes due 2027 in March 2017, used to redeem $1,000 million aggregate principal amountcomprehensive review of our outstanding 5% senior notes due 2019;strategy. Initial strategic actions included the decision to exit the refining business and

Repurchased approximately 10 million the sale of the Australian polypropylene business. We also formed a circular and low carbon solutions business within our ordinary shares during 2017.

O&P-Americas and O&P-EAI segments. This business was created to accelerate progress in capturing value from serving the rapidly growing customer demand for recycled and renewable solutions.

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Results of operations for the periods discussed are presented in the table below.

    Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues

  $34,484   $29,183   $32,735 

Cost of sales

   28,059    23,191    25,683 

Selling, general and administrative expenses

   859    833    828 

Research and development expenses

   106    99    102 
  

 

 

   

 

 

   

 

 

 

Operating income

   5,460    5,060    6,122 

Interest expense

   (491)    (322)    (310) 

Interest income

   24    17    33 

Other income, net

   179    111    25 

Income from equity investments

   321    367    339 

Provision for income taxes

   598    1,386    1,730 
  

 

 

   

 

 

   

 

 

 

Income from continuing operations

   4,895    3,847    4,479 

Loss from discontinued operations, net of tax

   (18)    (10)    (5) 
  

 

 

   

 

 

   

 

 

 

Net income

  $4,877   $3,837   $4,474 
  

 

 

   

 

 

   

 

 

 

  Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$50,451 $46,173 
Cost of sales43,847 37,397 
Impairments69 624 
Selling, general and administrative expenses1,310 1,255 
Research and development expenses124 124 
Operating income5,101 6,773 
Interest expense(287)(519)
Interest income29 9 
Other (expense) income, net(72)62 
Income from equity investments5 461 
Income from continuing operations before income taxes4,776 6,786 
Provision for income taxes882 1,163 
Income from continuing operations3,894 5,623 
Loss from discontinued operations, net of tax(5)(6)
Net income3,889 5,617 
Other comprehensive income (loss), net of tax –
Financial derivatives208 72 
Unrealized losses on available-for-sale debt securities— (1)
Defined benefit pension and other postretirement benefit plans346 224 
Foreign currency translations(123)(155)
Total other comprehensive income, net of tax431 140 
Comprehensive income$4,320 $5,757 

RESULTS OF OPERATIONS

Revenues—We had revenues of $34,484 million in 2017, $29,183 million in 2016 and $32,735 million in 2015.

2017 versus 2016—Revenues increased by $5,301$4,278 million, or 18%9%, in 20172022 compared to 2016.

2021. Average sales prices in 20172022 were higher across mostfor many of our products as sales prices generally correlate with crude oil and natural gas prices, which on average, increased comparedrelative to the corresponding period in 2016.2021. These higher prices led to increases in revenues of 15%. Higher sales volumes in our O&P—Americas,O&P-EAI and Refining segments, which were partly offset by lower I&D segment volumes, led to a revenue13% increase in 2017 of 2%. Favorablerevenue. Unfavorable foreign exchange impacts were responsible forresulted in a 1% revenue increase4% decrease in 2017.

2016 versus 2015—Revenues decreased $3,552 million, or 11%, in 2016 compared to 2015.

Lower average sales prices driven by decreases in the prices of crude oil and other feedstocks led to revenue declines of 10% in 2016. Lower sales volumes in our Refining segment due to turnaround activities and unplanned outages, which were substantially offset by higher I&D segment sales volumes, led to a 1% volume-driven decline in revenues. The decline in revenues includes a $290 million impact from the sale of our wholly owned Argentine subsidiary. Revenues for each of our business segments are reviewed further in the “Segment Analysis” section below.

revenue.

Cost of Sales—Cost of sales were $28,059increased $6,450 million, or 17%, in 2017, $23,191 million in 20162022 compared to 2021. This increase primarily related to higher feedstock and $25,683 million in 2015.

energy costs. Fluctuations in our cost of sales are generally driven by changes in feedstock and energy costs, as all other material components remain relatively flat from year to year.costs. Feedstock and energy related costs generally represent approximately 75%70% to 80% of cost of sales, other variable costs account for approximately 10% of cost of sales on an annual basis and fixed operating costs, consisting primarily of expenses associated with employee compensation, depreciation and amortization, and maintenance, range from approximately 10% to 15%20% in each annual period.

2017 versus 2016—Cost

Impairments—During 2022 we recognized a non-cash impairment charge of sales increased by $4,868$69 million or 21%, in 2017 comparedrelated to 2016. This increase was primarily due to higher feedstock and energy costs. Costs for crude oil, heavy liquids and natural gas liquids (“NGLs”) and other feedstocks were higher in 2017 relative to 2016.

2016 versus 2015—Cost of sales decreased by $2,492 million, or 10%, in 2016 compared to 2015.

The decrease in cost of sales in 2016 was primarily due to lower feedstock and energy costs. Raw material costs for crude oil, heavy liquids and NGLs and other feedstocks were lower in 2016 compared to 2015. Thethe sale of our wholly owned Argentine subsidiary in 2016 also contributed approximately $230Australian polypropylene manufacturing facility. During 2021 we recognized a non-cash impairment charge of $624 million related to our Houston refinery. See Notes 7 and 20 to the declineConsolidated Financial Statements for additional information regarding impairment charges.

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Operating Income—Operating income decreased by $1,672 million or 25% in 2016 cost of sales.

Cost of sales in 20162022 compared to 2021. In 2022, Operating income decreased for our O&P-Americas, O&P-EAI, Technology and 2015 also includednon-cash, pretax LCM inventory valuation charges totaling $29APS segments by $2,470 million, $1,214 million, $140 million and $548$85 million, respectively. The 2016 adjustment is related to a dropThese decreases were partially offset by increases in polypropylene prices in our O&P—Americas segment and the adjustments in 2015 affected all of our segments except Technology. The 2015 adjustments were driven mainly by declines in the pricesOperating income for crude oil, ethylene, propylene, benzene and ETBE. During 2015, cost of sales also included $35 million of amortization expense associated with the expiration of emission allowance credits in our Refining and I&D segments.

Operating Income—Our operating income was $5,460 million, $5,060segments of $1,585 million and $6,122$637 million, in 2017, 2016 and 2015, respectively.

2017 versus 2016—Operating income increased by $400 million in 2017.

This improvement over 2016 was primarily due to increases of $144 million, $140 million, $77 million and $68 million in operating income for our I&D, O&P—EAI, Refining and O&P—Americas segments, respectively.

2016 versus 2015—Operating income decreased by $1,062 million in 2016.

Operating income for 2016 reflects the impacts of the LCM inventory valuation adjustment discussed above and a $58 million pension settlement charge. Operating income for 2015 reflects the LCM inventory valuation adjustment and the emission credit allowance amortization discussed above. Including these impacts, 2016 operating income declined relative to 2015 by $863 million, $243 million and $166 million in our O&P—Americas, Refining and I&D segments, respectively. These lower results were partially offset by a $185 million improvement in operating income for our O&P—EAI segment.

Operating resultsResults for each of our business segments are revieweddiscussed further in the “Segment Analysis”Segment Analysis section below.

Interest Expense—Interest expense was $491decreased $232 million or 45% in 2017, $3222022 compared to 2021 primarily driven by debt extinguishment costs of $130 million recognized in 2016 and $310 million in 2015.

2017 versus 2016—We recognized charges totaling $113 million2021 related to the March 2017 redemption of $1,000 million of our outstanding 5% senior notes due 2019. These charges include $65 million of prepayment premiums, $44 million for adjustments associated with fair value hedges and $4 million for thewrite-off of associated unamortized debt issuance costs.

Compared to 2016 and excluding the effects of fair value hedges and the charges described above, interest expense decreased $39 million in 2017 due to the redemption of our 5% seniorcertain guaranteed notes, due 2019including a cash tender offer, coupled with a decrease in the first quarter of 2017, and increased $35weighted average outstanding debt balance in 2022 compared to 2021. See Note 11 to the Consolidated Financial Statements for additional information.

Income from Equity Investments—Income from equity method investments decreased $456 million, as a result of the relatedor 99%, in 2022 compared to debt issuances in March 2017 of our 3.5% guaranteed notes due 2027 and in March 2016 of our 1.875% guaranteed notes due 2022. A reduction in the

amount of interest capitalized during 2017 and increased charges from our fair value hedges resulted in incremental increases in interest expense of $13 million and $45 million respectively, relative to 2016.

2016 versus 2015—Debt issuances of our 1.875% guaranteed notes due 2022 in March 2016 and our 4.625% senior notes due 2055 in March 2015 and reduced benefits from ourfixed-for-floating interest rate swaps resulted in $42 million of higher interest expense in 2016. This increase was partially offset by a $22 million increase in capitalized interest and $7 million of lower bank and other fees.

For additional information related to our fair value hedges andfixed-for-floating interest rate swaps, see Notes 12 and 14.

Other Income, Net—Other income, net, was $179 million in 2017, $111 million in 2016 and $25 million in 2015.

2017 versus 2016—The $68 million increase in Other income, net, is2021, primarily due to gains recognized on the 2017 sales of alower polyolefin spreads for our joint venture interest and other assets, and the elimination of anon-cash obligation in 2017, as compared to the gain on the 2016 sale of our wholly owned subsidiary in Argentina.

In 2017, we recognized gains of $108 million on the sale of our O&P—EAI segment’s 27% interest in its Geosel joint venture and $31 million on the sale of our O&P—Americas segment’s Lake Charles, Louisiana site. We also recognized a $21 millionnon-cash gainventures in our O&P—EAI segment, related to the elimination of an obligation associated with a lease.

In 2016, we recognized a $78 million gain related to the sale of our wholly owned Argentine subsidiary. We allocated $57 million and $21 million of this gain to our O&P—Americas and O&P—EAI segments, respectively.

2016 versus 2015—The $86 million increaseparticularly those in Other income, net, is largely due to the $78 million gain on the sale of our wholly owned subsidiary mentioned above.

Income from Equity Investments—Our income from equity investments was $321 million in 2017, $367 million in 2016 and $339 million in 2015.

2017 versus 2016—Income from our equity investments decreased in 2017 mainly due to lower results for our joint ventures in Poland, Asia and Mexico.

2016 versus 2015—The $28 million increase in Income from equity investments in 2016 is largely due to improved results for our joint ventures in Mexico, Saudi Arabia, Poland and Thailand.

Arabia.

Income Taxes—Our effective income tax rates of 10.9%18.5% in 2017, 26.5%2022 and 17.1% in 2016 and 27.9% in 20152021 resulted in tax provisions of $598 million, $1,386$882 million and $1,730$1,163 million, respectively.

On December 22, 2017, In 2021, we benefited from return to accrual adjustments primarily associated with a step-up of certain Italian assets to fair market value and benefits from the U.S. enacted “H.R.1,”Coronavirus Aid, Relief, and Economic Security Act, also known as the “Tax Cuts“CARES Act” of 1.8% and Jobs Act” (the “Tax Act”)0.9%, materially impacting our 2017 Consolidated Financial Statements. This changerespectively. These increases were coupled with a decrease in U.S. tax law includedexempt income in 2022 resulting in a reduction2% increase in the federal corporate tax rate from 35% to 21% for years beginning after 2017, which resulted in the remeasurement of our U.S. net deferred income tax liabilities. Based upon a preliminary assessment of the expected impact of the Tax Act, we recorded a provisional tax benefit of $819 million as a result of the remeasurement of our deferred tax liabilities. In addition, excluding the impact of any discrete items, we expect our effective income tax rate for 2018 to be approximately 21%, which includes an estimated(-5.5%) benefit because of the Tax Act’s enactment. Some components of the Tax Act’s impact on 2018 were taken into consideration provisionally based upon reasonable estimates of future tax positions. We will continue to analyze the Tax Act to determine the full effects of the new law, including any further Treasury regulations as they are

issued, but we believe the future impact on the effective income tax rate will be positive. The ultimate impact of the Tax Act on our effective tax rate, will largely depend on the percentage of pretax income generated in the U.S. as compared to the rest of the world.

In September 2016, the United Kingdom enacted provisions (the so called “anti-hybrid provisions”), effective for years beginning January 1, 2017, that resulted in changes to our internal financing structure which did not materially impact our consolidated financial statements. In addition, in October 2016 the U.S. Treasury issued final Section 385 debt-equity regulations that may impact our internal financings in future years. Pursuant to a recent Executive Order, the Treasury Department reviewed these regulations and determined to delay but retain these regulations, subject to further review after enactment of U.S tax reform.

Our effective income tax rate fluctuates based on, among other factors,partially offset by changes in pretax income in countries with varying statutory tax rates the U.S. domestic production activity deduction, changes in valuation allowances, changes in foreign exchange gains/losses, the amount of exempt income, and changes in unrecognized tax benefits associated with uncertain tax positions. Our exempt income primarily includes interest income, export incentives, and equity earnings of joint ventures. The interest income is earned by certain of our European subsidiaries through intercompany financings and is either untaxed or taxed at rates substantially lower than the U.S. statutory rate. The export incentives relate to tax benefits derived from elections and structures available for U.S. exports. The equity earnings are attributable to our joint ventures and these earnings when paid through dividends to certain European subsidiaries are eligible for participation exemptions, which exempt the dividend payments from all or portions of normal statutory income tax rates. We currently anticipate the favorable treatment for the interest income and dividends to continue in the near term; however, this treatment is based on current law and tax rulings, which could change. The foreign exchange gains/losses have a permanent impact on our effective income tax rate that can cause unpredictable movement in our effective income tax rate. We continue to maintain valuation allowances in various jurisdictions totaling $96 million, which could impact our effective income tax rate in the future.

2017—The 2017 effective income tax rate, which was lower than the U.S. statutory tax rate of 35%, was favorably impacted by the remeasurement of U.S. net deferred tax liabilities due to the enactment of the Tax Act(-14.9%), exempt income(-7.0%), earnings in various countries (notably in Europe) with lower statutory tax rates(-3.0%), and the U.S. domestic production activity deduction(-1.0%). These favorable items were partially offset by the effects of U.S. state and local income taxes (0.7%) and changesfluctuations in uncertain tax positions (0.5%). Although the Tax Act lowered the U.S. statutory federal income tax rate to 21% for tax years beginning after 2017, the reconciliation uses the 35% rate in effect for the year ended December 31, 2017.

2016—The 2016 effective income tax rate, which was lower than the U.S. statutory tax rate of 35%2.1% and 1.8%, was favorably impacted by exempt income(-6.7%), earnings in various countries (notably in Europe) with lower statutory tax rates(-3.0%), the impact of a change innon-U.S. tax law on our deferred tax liabilities(-1.0%) and the U.S. domestic production activity deduction(-0.8%). These favorable items were partially offset by the effects ofnon-cashout-of-period adjustments (2.5%) and U.S. state and local income taxes (0.5%).

Our 2016 income tax provision includes $135 million ofnon-cash out of period adjustments from prior years. respectively.For furtheradditional information, on these adjustments, please see Note 17.

2015—The 2015 effective16 to our Consolidated Financial Statements.

Comprehensive Income—Comprehensive income tax rate, which was lower than the U.S. statutory tax rate of 35%, was favorably impacteddecreased by exempt income(-5.1%), earnings in various countries (notably in Europe) with lower statutory tax rates(-2.1%), and the U.S. domestic production activity deduction(-1.4%). These favorable items were partially offset by the effects of U.S. state and local income taxes (1.0%).

Comprehensive Income—We had comprehensive income of $5,105$1,437 million in 2017, $3,763 million2022 compared to 2021, primarily due to a decrease in 2016 and $4,064 million in 2015.

2017 versus 2016—The$1,342 millionnet income. The activities from the remaining components of Comprehensive income are discussed below.

Financial derivatives designated as cash flow hedges, primarily our forward-starting interest rate swaps, led to an increase in Comprehensive income of $136 million in 2017 relative2022 compared to 2016 reflects higher net income, the net favorable impacts of unrealized net2021, due to periodic changes in foreign currency translation adjustments and actuarial losses related to our definedthe benchmark interest rates.
Defined benefit pension and other postretirement benefit plans. These increases were offset byplans led to an unfavorable impactincrease in Comprehensive income of financial derivative instruments recognized$122 million in 2017.

The predominant functional2022 compared to 2021, primarily resulting from changes in actuarial assumptions and pension settlements.

In 2022, a decrease in foreign currency for our operations outsidetranslation losses led to an increase in Comprehensive income of $32 million compared to 2021, primarily due to continued strengthening of the U.S. is the euro. Relativedollar relative to the U.S. dollar,euro and the value of the euro increased during 2017 resulting in net gains as reflected in the Consolidated Statements of Comprehensive Income. These net gains in 2017 include pretax losses of $288 million, which representpre-tax gain from the effective portion of our net investment hedges.

We recognized net actuarial gains of $74 million in 2017 and net actuarial losses of $188 million in 2016. The $74 million net gain in 2017 reflects $74 million of gains due to changes in pension and other postretirement benefit discount rate assumptions and $6 million of gains due to favorable postretirement liability experience and other immaterial items. These gains were partly offset by $7 million of losses due to pension asset experience (actual asset return compared to expected return). In 2016, the $188 million net loss was primarily attributable to $279 million of losses due to pension and other postretirement benefit discount rate decreases, which was offset by $79 million of gains related to pension asset experience and $10 million due to favorable postretirement liability experience and other immaterial items. In 2016, we also recognized a $61 million reclassification adjustment related primarily to a voluntary lump sum program offered to certain former employees in select U.S. pension plans. Total lump sum payments from these plans exceeded annual service and interest cost in 2016 resulting in this loss.

The cumulative effects of our derivatives designated as cash flow hedges were losses of $323 million. The euro strengthened against the U.S. dollar in 2017 resulting in pretax losses of $287 million in 2017 related to our cross-currency swaps. Pretax gains of $264 million related to our cross-currency swaps were reclassification adjustments included in 2017 net income. Unrealized pretax losses of $25 million in 2017 related to forward-starting interest rate swaps were driven by increases in benchmark interest rates during those periods.

2016 versus 2015—In 2016, comprehensive income decreased on lower net income, the unfavorable impacts of financial derivative adjustments and the increase in actuarial losses related to our defined benefit pension and other postretirement benefit plans recognized in 2016. These decreases were offset in part by the net favorable impact of unrealized net changes in foreign currency translation adjustments.

In 2016, we had a pretax gain of $43 million related to the effective portion of the unrealized gains of our financial instruments designated as net investment hedges. The cumulative effect of our derivatives designated as cash flow hedges in 2016 was a loss of $29 million. In 2016, cumulative losses associated with the strengthening of the euro versus the U.S. dollar in the first half of the year resulted in a pretax loss of $15 million related2022.

See Notes 13, 14 and 18 to our cross-currency swaps. An unrealized loss of $17 million in 2016 related to forward-starting interest rate swaps was driven by decreases in benchmark interest rates during that period.

A pretax loss of $63 million related to our cross-currency swaps was a reclassification adjustment included in net income in 2016.

In 2016 and 2015, we recognized net actuarial losses of $188 million and $8 million, respectively. The $188 million net loss in 2016 reflects $279 million of losses due to pension and other postretirement benefit discount rate decreases, offset by $79 million of gains related to pension asset experience and $10 million due to favorable postretirement liability experience and other immaterial items. In 2015, the $8 million net loss was primarily attributable to $133 million of actual asset return less than the expected return. This loss was offset by gains due to $73 million of discount rate increases and, $50 million of gains due to favorable liability experience and healthcare assumptions. In 2016, we also recognized a $61 million reclassification adjustment related primarily to a voluntary lump sum program offered to certain former employees in select U.S. pension plans.

Total lump sum payments from these plans exceeded annual service and interest cost in 2016 resulting in this loss.

See “Critical Accounting Policies” below and Note 15 to the Consolidated Financial Statements for additional information on the key assumptions included in calculating the discount rate and expected return on plan assets.

further discussions.

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Segment Analysis

We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (“EBITDA”) as our measure of profitability for segment reporting purposes. This measure of segment operating results is used by our chief operating decision maker to assess the performance of, and allocate resources to, our operating segments. Intersegment eliminations and items that are not directly related or allocated to business operations, such a    s foreign exchange gains (losses) and components of pension and other post-retirement benefit costs other than service cost, are included in “Other.” For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest generally accepted accounting principles (“GAAP”) measure, Income from continuing operations before income taxes, see Note 21,Segment and Related Information,20 to our Consolidated Financial Statements.

Our continuing operations are divided into fivemanaged through six reportable segments: O&P—Americas,&P-Americas, O&P—EAI,&P-EAI, I&D, APS, Refining and Technology. The following tables reflect selected financial information for our reportable segments.

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Sales and other operating revenues:

    

O&P—Americas segment

  $10,400  $9,077  $9,964 

O&P—EAI segment

   12,263   10,579   11,576 

I&D segment

   8,472   7,226   7,772 

Refining segment

   6,848   5,135   6,557 

Technology segment

   450   479   465 

Other, including intersegment eliminations

   (3,949)   (3,313)   (3,599) 
  

 

 

  

 

 

  

 

 

 

Total

  $34,484  $29,183  $32,735 
  

 

 

  

 

 

  

 

 

 

Operating income:

    

O&P—Americas segment

  $2,461  $2,393  $3,256 

O&P—EAI segment

   1,634   1,494   1,309 

I&D segment

   1,202   1,058   1,224 

Refining segment

   (22)   (99)   144 

Technology segment

   183   221   197 

Other, including intersegment eliminations

   2   (7)   (8) 
  

 

 

  

 

 

  

 

 

 

Total

  $5,460  $5,060  $6,122 
  

 

 

  

 

 

  

 

 

 

Depreciation and amortization:

    

O&P—Americas segment

  $439  $362  $353 

O&P—EAI segment

   239   229   219 

I&D segment

   279   269   233 

Refining segment

   177   163   196 

Technology segment

   40   41   46 
  

 

 

  

 

 

  

 

 

 

Total

  $1,174  $1,064  $1,047 
  

 

 

  

 

 

  

 

 

 

Income from equity investments:

    

O&P—Americas segment

  $42  $59  $42 

O&P—EAI segment

   271   302   283 

I&D segment

   8   6   14 
  

 

 

  

 

 

  

 

 

 

Total

  $321  $367  $339 
  

 

 

  

 

 

  

 

 

 

Other income (expense), net

    

O&P—Americas segment

  $40  $63  $10 

O&P—EAI segment

   138   42   14 

I&D segment

   1   —     4 

Refining segment

   2   8   2 

Other, including intersegment eliminations

   (2)   (2)   (5) 
  

 

 

  

 

 

  

 

 

 

Total

  $179  $111  $25 
  

 

 

  

 

 

  

 

 

 

EBITDA:

    

O&P—Americas segment

  $2,982  $2,877  $3,661 

O&P—EAI segment

   2,282   2,067   1,825 

I&D segment

   1,490   1,333   1,475 

Refining segment

   157   72   342 

Technology segment

   223   262   243 

Other, including intersegment eliminations

   —     (9)   (13) 
  

 

 

  

 

 

  

 

 

 

Total

  $7,134  $6,602  $7,533 
  

 

 

  

 

 

  

 

 

 

Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues:
O&P-Americas$13,935 $15,002 
O&P-EAI12,823 13,490 
I&D12,950 10,180 
APS5,231 5,145 
Refining11,893 8,002 
Technology693 843 
Other, including segment eliminations(7,074)(6,489)
Total$50,451 $46,173 
Operating income (loss):
O&P-Americas$2,082 $4,552 
O&P-EAI14 1,228 
I&D1,604 967 
APS201 286 
Refining889 (696)
Technology331 471 
Other, including segment eliminations(20)(35)
Total$5,101 $6,773 
Depreciation and amortization:
O&P-Americas$582 $578 
O&P-EAI166 197 
I&D332 379 
APS109 117 
Refining39 79 
Technology39 43 
Total$1,267 $1,393 
Income (loss) from equity investments:
O&P-Americas$98 $115 
O&P-EAI(68)313 
I&D(25)34 
APS— (1)
Total$5 $461 
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Table of Contents
 Year Ended December 31,
Millions of dollars20222021
Other (expense) income, net:
O&P-Americas$(28)$28 
O&P-EAI— 11 
I&D(39)(2)
APS2 7 
Refining(7)(7)
Technology(4)— 
Other, including intersegment eliminations4 25 
Total$(72)$62 
EBITDA:
O&P-Americas$2,734 $5,273 
O&P-EAI112 1,749 
I&D1,872 1,378 
APS312 409 
Refining921 (624)
Technology366 514 
Other, including intersegment eliminations(16)(10)
Total$6,301 $8,689 

Olefins and Polyolefins—AmericasPolyolefins-Americas Segment

Overview—EBITDA decreased in 2022 relative to 2021 primarily driven by lower olefins margins.
In calculating the impact of margin and volume on EBITDA, consistent with industry practice, management offsets revenues and volumes related to ethyleneco-products against the cost to produce ethylene. Volume and price impacts of ethyleneco-products are reported in margin. Ethylene is a major building block of olefins and polyolefins and as such management assesses the performance of the segment based on ethylene sales volumes and prices and our internal cost of ethylene production.

2017 versus 2016—EBITDA improved in 2017 due to higher olefins volumes stemming from the expansion of our Corpus Christi, Texas olefins facility in late 2016. Higher olefins and polyethylene margins in 2017 were offset by lower polypropylene margins. EBITDA for 2017 also included a $31 million gain on the sale of our Lake Charles, Louisiana, site. EBITDA for 2016 included a $57 million gain on the first quarter sale of our wholly owned Argentine subsidiary and a $29 millionnon-cash LCM inventory valuation charge recognized in the fourth quarter due primarily to a reduction in polypropylene prices.

2016 versus 2015—EBITDA in 2016 reflects lower olefins and polyethylene results, partially offset by improved polypropylene results.

EBITDA in 2016 also reflects the net benefit arising from the gain on sale of our Argentine subsidiary and thenon-cash LCM inventory valuation charge discussed above. In 2015, volatility in the benchmark prices for heavy liquids and natural gas and certain correlated products, particularly ethylene and propylene, which continued during most of the year, led to netnon-cash LCM inventory valuation adjustments totaling $160 million.

Ethylene Raw Materials—Benchmark crude oil and natural gas prices generally have been indicators of the level and direction of the movement of raw material and energy costs for ethylene and itsco-products in the O&P—Americas segment. Ethylene and itsco-products are produced from two major raw material groups:

•NGLs, principally ethane and propane, the prices of which are generally affected by natural gas prices; and

•crudeoil-based liquids (“liquids” or “heavy liquids”), including naphtha, condensates and gas oils, the prices of which are generally related to crude oil prices.

We have flexibility to vary the raw material mix and process conditions in our U.S. olefins plants in order to maximize profitability as market prices fluctuate for both feedstocks and products. Although prices of these raw materialscrude-based liquids and natural gas liquids are generally related to crude oil and natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly. We have significant flexibility to varyIn 2022 and 2021, approximately 70% and 60%, respectively, of the raw material mix and process conditionsmaterials used in our U.S. olefins plants in order to maximize profitability as market prices for both feedstocks and products change.

As in recent years, strong supplies from the U.S. shale gas/oil boom resulted in ethane being a preferred feedstock in our U.S. plants in 2017. We produced 75%North American crackers was ethane.

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Table of our ethylene from ethane. Despite generally higher liquid feedstock prices, strong propylene and butadiene coproduct prices at various points in the year also brought liquids into our feedslate.

Contents

The following table sets forth selected financial information for the O&P—Americas&P-Americas segment including Income from equity investments, which is a component of EBITDA.

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues

  $10,400   $9,077   $9,964 

Income from equity investments

   42    59    42 

EBITDA

   2,982    2,877    3,661 

 Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$13,935 $15,002 
Income from equity investments98 115 
EBITDA2,734 5,273 
Revenues—Revenues increaseddecreased by $1,323$1,067 million, or 15%7%, in 20172022 compared to 2016 and decreased by $887 million, or 9%, in 2016 compared to 2015.

2017 versus 2016—Average2021. Lower average sales prices for most productsall businesses resulted in the 7% decrease in revenue primarily driven by reduced demand and increased market supply.

EBITDA—EBITDA decreased by $2,539 million, or 48%, in 2017, consistent with feedstock prices that are correlated with crude oil and natural gas prices, which on average increased relative2022 compared to 2016. These higher sales prices were responsible for a 14% increase in 2017 revenues.

Operating rates and product volumes improved in 2017 due to turnaround activities and the expansion at our Corpus Christi, Texas facility during 2016. These increased volumes were responsible for a revenue increase of 1% in 2017.

2016 versus 2015—Average sales prices for ethylene and polyethylene declined in 2016, consistent with feedstock prices that are correlated to the price of natural gas, which declined relative to 2015. These lower average sales prices2021. Lower olefins results led to a revenue33% decrease of 11% in that period. A 2% revenue increase resulted from the improvement in 2016 product sales volumes as higher olefins sales volume, supported by an increase in the level of purchases for resale during turnaround activities, were only partly offset by lower polyolefins volumes. The sale of our Argentine subsidiary reduced 2016 revenues by $230 million.

EBITDA—EBITDA increased by $105 million, or 4%, in 2017 compared to 2016 and decreased by $784 million, or 21%, in 2016 compared to 2015.

2017 versus 2016—Increased volumes in 2017 due largely to the expansion of our Corpus Christi, Texas olefins facility was responsible for a 5% improvement in EBITDA. Margins were relatively unchanged in 2017 compared to 2016 due to an approximate 5 cents per pound decrease in polypropylene spreads that offset per pound increases in olefins and polyethylene spreads of a half cent and 2 cents, respectively. Polypropylene margins declined from the high levels in 2016 on the higher cost of propylene feedstocks, while the increase in olefins and polyethylene margins was attributable to higher average sales prices that more than offset the increased cost of ethylene. Lower income from our joint venture relative to the prior year led to a 1% decline in EBITDA. The net impact to EBITDA of the gain on sale of our wholly owned Argentine subsidiary in the first quarter of 2016 and the fourth quarter LCM inventory valuation adjustment mentioned above was offset by the first quarter 2017 gain on sale of our Lake Charles, Louisiana site.

2016 versus 2015—Lower olefin and polyethylene margins in 2016 were partially offset by higher polypropylene margins. The decline in olefins margins reflected a 2 cents per pound decrease in average ethylene sales prices and an approximate 4 cents per pound increase in the cost of ethylene production driven by lower co-product prices and an increase in the cost of NGL feedstocks. Polyethylene margins declined 4 cents per pound from very high levels in 2015 as average polyethylene sales prices caught up with the overall decline in the cost of ethylene feedstock, after lagging feedstock cost declines in 2015. A 4 cents per pound improvement in 2016 polypropylene margins reflects the benefits of lower propylene feedstock costs and tight market conditions. These olefin and polyethylene margin impacts led to a 17% decrease in EBITDA during 2016. An additional 10% decline in 2016 EBITDA is attributed to the impact of lower volumes related to lower ethylene production during the turnaround and expansion-related activities at our Corpus Christi, Texas ethylene facility and a site-wide outage related to turnaround activities at our Morris, Illinois site.

These negative impacts were partially offset by a 6% increase in 2016 EBITDA primarily due to margin compression driven by lower ethylene prices coupled with higher feedstock and energy costs. Lower polyethylene and polypropylene results led to a $131 million reduction9% and 5% decrease in the unfavorable LCM inventory valuation adjustment recognizedEBITDA, respectively, primarily driven by lower demand, an increase in 2016 versus 2015industry capacity and to the $57 million gain on the 2016 sale of our Argentine subsidiary.

higher energy costs.

Olefins and Polyolefins—Europe,Polyolefins-Europe, Asia, International Segment

Overview—EBITDA decreased in 2022 compared to 2021 mainly as a result of lower volumes and margins across all businesses, lower income from equity investments and unfavorable impacts of foreign exchange.
In calculating the impact of margin and volume on EBITDA, consistent with industry practice, management offsets revenues and volumes related to ethyleneco-products against the cost to produce ethylene.

Volume and price impacts of ethyleneco-products are reported in margin. Ethylene is a major building block of our olefins and polyolefins and as such management assesses the performance of the segment based on ethylene sales volumes and prices and our internal cost of ethylene production.

2017 versus 2016—EBITDA increased in 2017 compared to 2016. This improvement was driven by higher olefins margins and the impact of higher volumes across most products, partly offset by lower polyethylene margins and lower income from our equity investments.

EBITDA for 2017 also includes a $108 million gain on the third quarter sale of our 27% interest in Geosel and a $21 million beneficial impact related to the elimination of an obligation associated with a lease. In 2016, EBITDA reflected gains totaling $11 million from the sales of our joint venture in Japan and idled assets in Australia and a $21 million gain from the sale of our wholly owned Argentine subsidiary.

2016 versus 2015—Higher EBITDA in 2016 was largely the result of higher polyolefin margins, offset in part by lower olefins results and reductions in polyolefins volumes due to turnaround activity and unplanned downtime.

EBITDA in 2016 reflects the benefit of a $21 million gain from the sale of our wholly owned Argentine subsidiary and $11 million of gains from the sales of our joint venture in Japan and idled assets in Australia. EBITDA in 2015 included a $30 millionnon-cash LCM inventory valuation adjustment driven by a decline in the prices of naphtha and polyolefins.

Ethylene Raw Materials—In Europe, heavy liquids arenaphtha is the primary raw materialsmaterial for our ethylene production. In recent years, we have sourced advantaged NGLs whenproduction and represents approximately 70% of the opportunity has arisen. In 2017, we benefited less from advantaged feedstocks thanraw materials used in recent years as prices for NGLs increased relative tooil-based naphtha feedstock prices.

2022 and 2021.

The following table sets forth selected financial information for the O&P—EAI&P-EAI segment including Income from equity investments, which is a component of EBITDA.

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues

  $12,263   $10,579   $11,576 

Income from equity investments

   271    302    283 

EBITDA

   2,282    2,067    1,825 

 Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$12,823 $13,490 
(Loss) income from equity investments(68)313 
EBITDA112 1,749 
Revenues—Revenues in 2017 increaseddecreased by $1,684$667 million, or 16%5%, in 2022 compared to 20162021. Unfavorable foreign exchange impacts resulted in a revenue decrease of 8%. Lower volumes resulted in a revenue decrease of 8% primarily due to lower demand along with planned and decreased by $997 million, or 9%,unplanned maintenance. During 2022, we had planned and unplanned maintenance resulting in 2016ethylene cracker operating rates of approximately 67% of capacity compared to 2015.

2017 versus 2016—Average89% of capacity during 2021. Higher average sales prices resulted in 2017 were higher across most productsa 11% increase in revenue as sales prices generally correlate with crude oil prices, which on average, increased compared to 2016. These higher average sales prices were responsible for a revenue increase2021.

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Table of 11%Contents
EBITDA—EBITDA decreased by $1,637 million, or 94%, in 2017. Better product availability2022 compared to 2016, which was affected by turnaround activity and inventory requirements,2021. Lower polyolefin results led to a 39% decrease in EBITDA. Approximately 60% of the change was driven by decreased margins resulting from higher salesenergy costs and lower spreads with the remainder due to a decrease in volumes driven by lower demand. Lower olefins results led to a 20% decrease in EBITDA, approximately half of the change was driven by lower volumes due to unplanned maintenance and reduced operating rates to manage working capital. The other half of the change was due to lower margins resulting from higher feedstock and energy costs which outpaced increased ethylene prices. Lower income from our equity investments led to a decrease in EBITDA of 22% mainly attributable to lower polyolefin spreads across most products. These increased volumesall joint ventures, particularly those located in Asia and Saudi Arabia. Unfavorable foreign exchange impacts resulted in a revenue increase10% decrease in EBITDA.
In the second quarter of 3% in 2017.

Foreign exchange impacts that, on average, were favorable for 2017 resulted in2022, we recognized a revenue increase of 2% compared to the prior year.

2016 versus 2015—The decline in 2016 revenues comprises a 7% decrease related to lower average sales prices, and a 2% reduction of sales volumes stemming from turnaround activities and unplanned outages.

In 2016, average sales prices for olefins and polyolefins fell following feedstock prices that declined$69 million non-cash impairment charge in conjunction with the pricesale of crude oil.

EBITDA—EBITDA increased by $215 million, or 10%,our polypropylene manufacturing facility located in 2017 compared to 2016 and by $242 million, or 13%, in 2016 compared to 2015.

2017 versus 2016—An increase in olefin margins driven largely by a 6 cents per pound increase in ethylene sales prices was partly offset in 2017 by a 3 cents per pound decrease in European polyethylene spreads due to a more balanced European market compared to the prior year. This net increase resultedAustralia, resulting in a 1% improvement in 2017 EBITDA compared to 2016. The higher 2017 volumes discussed above added another 5% to EBITDA. Favorable foreign exchange impacts in 2017 also contributed an additional 1% to EBITDA. The net beneficial impact of the transactions in 2016 and 2017 discussed above related to the sales of our wholly owned subsidiary, joint venture interests and idled assets, and the elimination of a lease-related obligation, resulted in an additional 5% increase in EBITDA. These increases were partially offset by a 2%4% decrease in EBITDA driven by a reduction in income from equity investments in Poland and Asia in 2017 relativefor 2022 compared to very strong 2016 results.

2016 versus 2015—In 2016, higher European polyolefins margins stemming from declining ethylene and propylene feedstock costs outpaced falling product prices and led to an 11% increase in EBITDA. This margin improvement in 2016 was partially offset by a 2% decrease in EBITDA due largely to lower polyolefin volumes.

A 3% increase in 2016 EBITDA is attributed to gains associated with the sales of a joint venture, idled assets and our wholly owned Argentine subsidiary, as well as the absence of the 2015 LCM inventory valuation adjustment discussed above. Income from our equity investments also led to a 1% increase in EBITDA in 2016 due to higher polyolefin margins in our European joint venture and strong operating rates in our Saudi joint ventures.

2021.

Intermediates and Derivatives Segment

Overview—ImprovementsEBITDA increased in 2017 EBITDA for intermediate chemicals and PO & derivatives were partly offset by lower results for oxyfuels and related products. EBITDA in 2017also reflected an approximate $50 million unfavorable impact of chargesrelated2022 compared to precious metals catalyst financings relative to 2016.

2017 versus 2016—EBITDA was higher for our I&D segment in 2017 relative to 2016 due to stronger margins for intermediate chemicals products supported by reduced market supply stemming from industry outages and increased demand in Asia.

2016 versus 2015—Operating results for 2016 were lower than in 2015, as margin compression for most products related to declining energy prices, higher industry production rates and additional industry capacity was only partly offset by the impact of higher volumes.

EBITDA in 2015 was negatively impacted by the recognition of $181 million of LCM inventory valuation adjustments2021, primarily driven by the continued decline in prices for feedstocks, certainincreased oxyfuels and related products margin, partially offset by decreases in margin for propylene oxide and derivatives and intermediate chemical products to levels that were lower than the carrying value of our related inventories at reporting dates throughout the year.

chemicals.

The following table sets forth selected financial information for the I&D segment including Income from equity investments, which is a component of EBITDA.

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues

  $8,472   $7,226   $7,772 

Income from equity investments

   8    6    14 

EBITDA

   1,490    1,333    1,475 

 Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$12,950 $10,180 
(Loss) income from equity investments(25)34 
EBITDA1,872 1,378 
Revenues—Revenues for 2017 increased by $1,246$2,770 million, or 17%27%, in 2022 compared to 2016 and decreased by $546 million, or 7%, in 2016 compared to 2015.

2017 versus 2016—2021. Higher average sales prices in 2017 for most products, which reflect the impacts of higher feedstock and energy costs and industry supply constraints, were responsible for revenue increases of 17%. Favorable foreign exchange impacts also led to a 1% revenue increase in 2017. These increases were partially offset by a revenue decrease of 1% in 2017, primarily due to lower sales volumes for intermediate chemicals and oxyfuels and related products. This volume-driven decline was largely due to reduced production associated with two major turnarounds at our Botlek, Netherlands, and Channelview, Texas, facilities.

2016 versus 2015—Lower average sales prices in 2016 reflected the impacts of lower crude oil, lower gasoline prices and the decline in various feedstock prices. Additional industry supply also negatively impacted the average sales prices for certain products during 2016. These lower sales prices in 2016 were responsible for an 11% revenue decrease.

This price driven decrease was offset in part by a 4% volume-related revenue increase in 2016 resulting from fewer planned and unplanned production outages relative to 2015.

EBITDA—EBITDA increased by $157 million, or 12%, in 2017 compared to 2016 and decreased by $142 million, or 10%, in 2016 compared to 2015.

2017 versus 2016—Higher intermediate chemicals and PO and derivative product margins driven by higher average sales prices resulted in a 19%25% increase in EBITDA. Thisrevenue as sales prices generally correlate with crude oil prices, which, on average, increased compared to the same period in 2021, coupled with lower industry supply. Sales volumes improved resulting in a 6% increase in revenue as 2021 was offsetimpacted by unusually cold temperatures and associated electrical power outages that led to shutdowns of our manufacturing facilities in part byTexas. Unfavorable foreign exchange impacts resulted in a 2% declinerevenue decrease of 4%.

EBITDA—EBITDA increased $494 million, or 36%, in margins for oxyfuels2022 compared to 2021. Oxyfuels and related products increased EBITDA by 53% primarily due to higher butane pricing. Thisdriven by margin improvement was partly offset by decreases in EBITDAas a result of 4% and 1%, respectively, stemming from the unfavorable impacts associated with charges related to precious metals catalyst financings and the lower volumes discussed above.

2016 versus 2015—Lower margins in most I&D products in 2016 resulted in a 30% decrease in EBITDA. Weakerhigher gasoline markets drove oxyfuels and related product values lower relative to butane feedstock costs, and lower product prices in propyleneprices. Propylene oxide and derivatives and intermediate chemicals wereresults declined each resulting in a 5% reduction in EBITDA driven largely by increased industry supply.reduced margins from higher energy and feedstock costs. Unfavorable foreign exchange impacts resulted in a 4% decrease in EBITDA. Lower income from our equity investments led to a decrease in 2016 alsoEBITDA of 4% mainly attributable to lower margins in Asia. During 2022 and 2021, we recognized LIFO inventory charges of $26 million and $93 million, respectively, which resulted in a 1%5% increase in EBITDA.

Advanced Polymer Solutions Segment
Overview—EBITDA decreased in 2022 compared to 2021, primarily due to a decline in compounding and solutions results partially offset by improved advanced polymers results. In the first quarter of 2023, our Catalloy and polybutene-1 products, previously reflected in our APS segment, will be transferred to and reflected in our O&P-Americas and O&P-EAI segments. Our reporting structure will be revised in the first quarter of 2023 to reflect this change.
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The following table sets forth selected financial information for the APS segment:
Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$5,231 $5,145 
Loss from equity investments— (1)
EBITDA312 409 
Revenues—Revenues increased in 2022 by $86 million, or 2%, compared to 2021. Higher average sales prices resulted in a 13% increase in revenue as sales prices generally correlate with prices for crude oil and its derivatives, which, on average, increased compared to 2021. Foreign exchange impacts resulted in a revenue decrease of 8%. Sales volumes declined resulting in a 3% decrease in revenue stemming from lower demand.
EBITDA—EBITDA during that period.

Andecreased in 2022 by $97 million, or 24%, compared to 2021. Compounding and solutions results led to a 29% reduction in EBITDA. Approximately 55% of the change was driven by higher raw material and energy costs with the remainder due to lower volumes as demand declined. Advanced polymers results increased by 4% driven by margin improvements for Catalloy due to higher sales prices. Unfavorable foreign exchange impacts resulted in a EBITDA decrease of 9%. During 2022 and 2021, we recognized $28 million and $55 million, respectively, of LIFO inventory charges which resulted in a 7% increase in 2016 of 9% relatedEBITDA.

Refining Segment
Overview—EBITDA increased in 2022 relative to the higher volumes discussed above, partially offset the negative margin impact. EBITDA in 2016 also reflected an increase of 12% related to the absence of the LCM inventory valuation adjustment recognized in the 2015 comparison period.

Refining Segment

Overview

2017 versus 2016—EBITDA for our Refining segment benefited from higher crude processing rates in 2017 as the impacts of planned and unplanned maintenance outages were less than in 2016. Higher industry margins were offset by higher maintenance-related fixed costs in 2017.

2016 versus 2015—Lower margins and reduced production2021 primarily due to planned and unplanned outages in 2016 as described below resulted in significantly lower results for our Refining segment in 2016 as compared to 2015. EBITDA in 2015 included charges totaling $177 million related tonon-cash charges associated with LCM inventory valuation adjustments driven by a decline of nearly $20 per barrel in crude oil prices and corresponding reductions in refined product prices.

higher margins.

The following table sets forth selected financial information and heavy crude oil processing rates for the Refining segment and the U.S. refining market margins for the applicable periods. “LLS”“Brent” is a light sweet crude oil whileand is one of the main benchmark prices for purchases of oil worldwide. “Maya” is a heavy sour crude oil.

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues

  $6,848   $5,135   $6,557 

EBITDA

   157    72    342 

Heavy crude oil processing rates, thousands of barrels per day

   236    201    238 
  

 

 

   

 

 

   

 

 

 

Market margins, dollars per barrel

            

Light crudeoil—2-1-1

  $13.54   $10.73   $14.04 

Light crude oil—Maya differential

   7.02    8.51    8.26 
  

 

 

   

 

 

   

 

 

 

Total Maya2-1-1

  $20.56   $19.24   $22.30 
  

 

 

   

 

 

   

 

 

 

oil grade produced in Mexico that is a relevant benchmark for heavy sour crude oils in the U.S. Gulf Coast market. References to industry benchmarks for refining market margins are to industry prices reported by Platts, a division of S&P Global.

 Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$11,893 $8,002 
EBITDA921 (624)
Thousands of barrels per day
Heavy crude oil processing rates238 231 
Market margins, dollars per barrel  
Brent - 2-1-1$33.62 $14.39 
Brent - Maya differential11.71 6.48 
Total Maya 2-1-1$45.33 $20.87 
Revenues—Revenues increased by $1,713$3,891 million, or 33%49%, in 20172022 compared to 2016 and decreased by $1,422 million, or 22%, in 2016 compared to 2015.

2017 versus 2016—2021. Higher product prices in 2017 largely driven by an increase in average crude oil prices of approximately $10 per barrel led to a revenue increase of 26% relative to 2016. Heavy45% as the average Brent crude oil processing ratesprice increased by 17%approximately $28.11 per barrel. Sales volumes increased resulting in 2017, leadinga 4% increase in revenue due to a volume driven revenue increase of 7%,improved demand as refined products markets recovered from the impacts of planned and unplanned outages and the effectsCOVID-19 pandemic.

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Table of Hurricane Harvey in 2017 had less of an impact on processing rates than the unplanned outages in 2016 referenced below. In 2017, we completed planned turnarounds on one of our crude units and our fluid catalytic converter.

2016 versus 2015—Major refined product prices declined due to lower crude oil prices and to weakness relative to crude oil. The average per barrel price of benchmark Maya crude oil declined $7.59 in 2016 compared to 2015. A 16% price-related revenue decline in 2016 versus 2015 reflected per barrel price declines of approximately $10.51 and $10.77 for gasoline and distillates, respectively.

The remaining 6% revenue decrease in 2016 is attributed to reduced processing rates. Processing declines resulted from several unplanned outages, including a coker unit fire, downtime at crude units with reduced processing and several utility interruptions. Planned turnaround activity on a crude unit and a coker unit processing train early in 2016 also contributed to lower throughput during 2016.

Contents

EBITDA—EBITDA increased by $85$1,545 million or 118%248%, in 20172022 compared to 2016 and decreased by $270 million, or 79%,2021. Margin improvements drove a 173% increase in 2016 comparedEBITDA primarily due to 2015.

2017 versus 2016—Increased production accounted for approximately 90% ofan increase in the improvement in 2017 EBITDA. Crude oil processing rates in 2017 were higher than 2016 as discussed above. Higher refining margins, which were partly offsetMaya 2-1-1 market margin driven by higher maintenance-related fixeddemand for transportation fuels. Additionally, during 2022 we incurred costs accounted forrelated to our planned exit from the remaining 10% improvementrefining business, which resulted in 2017 EBITDA.

2016 versus 2015—A decline in refining margins in 2016 led to a 90% decrease in EBITDA. The Maya2-1-1 benchmark refining spread declined in 2016 by approximately $3.10 per barrel relative to 2015. This decrease was driven by per barrel declines of approximately $3.15 and $3.40 in gasoline and diesel spreads, respectively, and an approximate $1.00 reduction in the price differential between Brent and Maya crude oils. The operating issues that drove lower crude throughput in 2016 also negatively impacted margins due to a less favorably priced crude oil mix and higher variable costs per barrel.

Lower production stemming from a reduction in average heavy crude oil processing rates relative to 2015 led to a25% decrease in EBITDA in 2016 of 41%. This reduction in rates was attributablecompared to 2021. See Notes 7, 12 and 20 to the unplanned outages, crude unit operating limitationsConsolidated Financial Statements for additional information regarding the planned exit. The remaining change is due to non-cash impairment charges of $624 million recorded in 2021 with no similar charge incurred in 2022. For additional information see Notes 7 and planned turnaround activities discussed above.

The absence of the $177 million LCM inventory valuation adjustment recognized in 2015 resulted in an EBITDA increase of 52% in 2016 as compared20 to 2015.

our Consolidated Financial Statements.

Technology Segment

Overview—The Technology segment recognizes revenues related to the sale of polyolefin catalysts and the licensing of chemical and polyolefin process technologies. These revenues are offset in part by the costs incurred in the production of catalysts, licensing and services activities and research and development (“R&D”) activities. In 2017, 20162022 and 2015,2021, our Technology segment incurred approximately 55% of all R&D costs.

2017 versus 2016—A decline EBITDA decreased in 2017 EBITDA reflects2022 compared to 2021 driven by lower licensing revenues partially offset by higher catalyst sales volumes, compared to 2016.

2016 versus 2015—EBITDA in 2016 improved with higher catalyst margins. A small increase in licensing and services revenue was mostly offset by slightly lower catalyst sales volumes.

the unfavorable impacts of foreign exchange.

The following table sets forth selected financial information for the Technology segment.

   Year Ended December 31, 

Millions of dollars

    2017       2016       2015   

Sales and other operating revenues

  $450   $479   $465 

EBITDA

   223    262    243 

 Year Ended December 31,
Millions of dollars20222021
Sales and other operating revenues$693 $843 
EBITDA366 514 
Revenues—Revenues decreased by $29$150 million, or 6%18%, in 20172022 compared to 2016 and increased by $14 million, or 3%, in 2016 compared to 2015.

2017 versus 2016—2021. Lower licensing revenues were responsible for a revenueresulting from fewer contracts reaching significant milestones drove an 11% decrease of 12% in 2017 relative to 2016. This decrease was partially offset by revenue increases of 3% and 1%, respectively, related to increased catalyst sales volumes and higher average sales prices. Favorablerevenue. Unfavorable foreign exchange impacts were responsible for an additional 2% increaseresulted in EBITDA.

2016 versus 2015—Highera 10% decrease in revenue. Changes in average catalyst sales prices and higher revenues recognized on process licenses each led toprice resulted in a 2% increase in 2016 revenues. These increases were partly offset byrevenue. Higher catalyst volumes resulted in a 1% increase in revenue decrease resulting from lower catalyst sales volumes.

primarily driven by increased demand.

EBITDA—EBITDA in 20172022 decreased by $39$148 million, or 15%29%, compared to 2016 and increased by $19 million, or 8%, in 2016 compared to 2015.

2017 versus 2016—2021. Lower licensing and services revenues in 2017 were largely responsible forresulting from fewer contracts reaching significant milestones drove a 20%16% decrease in 2017 EBITDA. This decline was partly offset by a 5% improvementUnfavorable foreign exchange impacts resulted in an EBITDA resulting from an increase in catalyst volumes during 2017.

2016 versus 2015—A 10% improvement in EBITDA during 2016 due to higher catalyst margins and an increase in licensing and services revenue was partly offset by a 2% decrease in EBITDA resulting from lower catalyst volumes.

of 11%.

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FINANCIAL CONDITION

Operating, investing and financing activities of continuing operations, which are discussed below, are presented in the following table:

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Source (use) of cash:

    

Operating activities

  $5,206  $5,606  $5,842 

Investing activities

   (1,756)   (2,301)   (1,046) 

Financing activities

   (2,859)   (3,349)   (4,850) 

 Year Ended December 31,
Millions of dollars20222021
Cash provided by (used in):
Operating activities$6,119 $7,695 
Investing activities(1,977)(1,502)
Financing activities(3,407)(6,385)
Operating Activities—Cash provided by operating activities of $5,206$6,119 million generated in 20172022 primarily reflected earnings adjusted fornon-cash items partly offset by $593 million of cash used by the main components of working capital—accounts receivable, inventories and accounts payable. Higher sales prices across all of our segments in the fourth quarter of 2017 and brief delays in the receipt of payments for products in our Refining and I&D segments led to the increase in accounts receivable. Inventories increased for most products in our O&P—EAI and O&P—Americas segments and included an inventory build in our O&P–Americas segment in anticipation of first quarter 2018 turnaround activities These increases were partly offset by an increase in feedstock pricing in the fourth quarter of 2017 in our O&P—Americas, O&P—EAI and Refining segments which led to an increase in accounts payable.

Cash of $5,606 million generated in 2016 primarily reflected earnings adjusted fornon-cash items and cash generated by the main components of working capital. Thenon-cash items in 2016 included a $78 million gain related to the sale of our wholly owned Argentine subsidiary with adjustments for related working capital and gains totaling $11 million related to sales of our joint venture in Japan and idled assets in Australia.

The main components of working capital generated cash of $123 million in 2016. Higher product sales prices in the fourth quarter of 2016 across all segments combined with the impact of higher fourth quarter 2016 sales volumes in our O&P—Americas, Refining and I&D segments led to an increase in accounts receivable. This increase in accounts receivable was offset by higher accounts payable, which was driven by the higher cost of crude oil and other feedstocks. The level of inventories fell in our O&P—Americas segment following the completion of turnaround activities in the fourth quarter of 2016 and in our Refining segment, which had higher crude oil inventories at the end of 2015 due to operational issues during the fourth quarter.

Cash of $5,842 million generated in 2015 primarily reflected earnings adjusted fornon-cash items and cash used by the main components of working capital. Thecapital–Accounts receivable, Inventories and Accounts payable.

In 2022, the main components of working capital consumedprovided $450 million of cash driven by a decrease in Accounts receivable, partially offset by a decrease in Accounts payable. The decrease in Accounts receivable was primarily due to lower revenues across most businesses primarily driven by lower average sales prices. The decrease in Accounts payable was driven by lower production volumes as a result of

$246 lower operating rates.

Cash provided by operating activities of $7,695 million in 2015.2021 primarily reflected earnings adjusted for non-cash items and cash provided by the main components of working capital.
In 2021, the main components of working capital used $960 million of cash driven by an increase in Inventories and Accounts receivable, partially offset by an increase in Accounts payable. The lower costincrease in Inventories was primarily due to an increase in raw material costs coupled with an increase in inventory to levels required to support improved demand and in anticipation of crude oilturnarounds in 2022. The increase in Accounts receivable was driven by higher revenues across most businesses primarily driven by higher average sales prices. The increase in Accounts payable was primarily driven by increased raw material and other feedstocksenergy costs.
Other operating activities in 2015 led to a decline2021 includes an $870 million tax refund received in accounts payable. Preparation for the turnaround in 2016 at our Corpus Christi, Texas facilityfourth quarter of 2021 and the unplanned maintenance outage ateffects of changes in income tax accruals primarily driven by increased pretax income. For additional information see Note 16 to our Houston refinery, which resultedConsolidated Financial Statements.
Investing Activities—Capital expenditures in higher levels2022 totaled $1,890 million compared to $1,959 million in 2021. Approximately 50% and 60% of U.S. olefinsour capital expenditures in 2022 and crude oil inventories at year end, led2021, respectively, was for profit-generating growth projects, primarily our PO/TBA plant, with the remaining expenditures supporting sustaining maintenance. See Note 20 to the increase in consolidated inventories in 2015. Accounts receivable decreased on lower average product sales prices, reflective of the drop in 2015 crude oil prices.

Investing Activities—We invested cash of $1,756 million, $2,301 million and $1,046 million in 2017, 2016 and 2015, respectively.

Consolidated Financial Statements for additional information regarding capital spending by segment.

We invest cash in investment-grade and other high-quality instruments that provide adequate flexibility to redeploy funds as needed to meet our cash flow requirements while maximizing yield.
In 2017, 20162022 and 2015,2021, we invested $653 million, $764received proceeds of $8 million and $2,073$335 million, respectively, from the liquidation of our investment in securities that are classified as Short-term investments. We also invested $512 million, $674 million and $397 millionequity securities. Additionally, intri-party repurchase agreements in 2017, 2016 and 2015, respectively. We 2021 we received proceeds of $346 million, upon the sale and maturitymaturities of certain of our Short-termavailable-for-sale debt securities.
In 2021, we made an equity contribution of $104 million to form Ningbo ZRCC LyondellBasell New Material Company Limited, a 50/50 joint venture with Sinopec. For additional information related to our Equity investments, and tri-party purchase agreements of $574 million and $381 million, respectively, in 2017; $674 million and $685 million, respectively, in 2016; and $2,489 million and $350 million, respectively, in 2015. Seesee Note 148 to the Consolidated Financial Statements for additional information regarding these investments.

Joint Venture Activity—Statements.

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In September 2017, we sold our 27% interest in our Geosel joint venture and received proceeds of $155 million.

In April 2017, we increased our interest in the entity that holds our equity interest in Al Waha Petrochemicals Ltd. from 83.79% to 100% by paying $21 million to exercise a call option to purchase the remaining 16.21% interest held by a third party.

In September 2016, we purchased a net additional interest in our joint venture in Korea for $36 million. In February 2016, we received proceeds of $72 million for the sale of our joint venture in Japan.

Financial Instruments Activity—Upon expiration in 2017 and 2016, we settled2022, foreign currency contracts with aan aggregate notional value of €550€500 million and €1,200 million, respectively, which were designated as net investment hedgesexpired. Upon settlement of our investments in foreign subsidiaries. Payments to and proceeds from our counterparties resulted in a net cash outflows of $49 million and $61 million during 2017 and 2016, respectively. See Note 14 to the Consolidated Financial Statements for additional information regarding these foreign currency contracts.

Sale of Wholly Owned Subsidiary—In February 2016,contracts, we received net cash proceeds of $137paid €500 million for($501 million at the sale of our wholly owned Argentine subsidiary.

The following table summarizes our capital expenditures for continuing operations for the periods from 2015 through 2017:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Capital expenditures by segment:

      

O&P—Americas

  $753   $1,376   $668 

O&P—EAI

   206    261    186 

I&D

   332    333    441 

Refining

   213    224    108 

Technology

   32    36    24 

Other

   11    13    13 
  

 

 

   

 

 

   

 

 

 

Consolidated capital expenditures of continuing operations

  $1,547   $2,243   $1,440 
  

 

 

   

 

 

   

 

 

 

In 2018, we expect to spend approximately $2.4 billion, which includes contributionsexpiry spot rate) to our PO joint ventures. The higher levelcounterparties and received $614 million from our counterparties.

In 2021, foreign currency contracts with an aggregate notional value of expected capital expenditures in 2018 versus 2017 is largely driven by construction related€300 million expired. Upon settlement of these foreign currency contracts, we paid €300 million ($355 million at the expiry spot rate) to our new Hyperzone polyethylene plant atcounterparties and received $358 million from our La Porte, Texas facility and construction related to our new PO/TBA plant in Texas.

In 2017 and 2016, capital expenditures included construction related to our new Hyperzone polyethylene plant, construction related to our new PO/TBA, debottlenecks of certain assets to enhance production, turnaround activities at several sites as well as other plant improvement projects. The lower level of capital expenditures in 2017 versus 2016 for our O&P—Americas segment is largely due to the completion of the 800 million pound ethylene expansion at our Corpus Christi, Texas facility in the fourth quarter of 2016.

counterparties.

Financing Activities—Financing activities used cash of $2,859 million, $3,349 million and $4,850 million in 2017, 2016 and 2015, respectively.

We made payments totaling $866 million, $2,938 million and $4,656 million in 2017, 2016 and 2015, respectively, to acquire a portion of our outstanding ordinary shares. We also made dividend payments totaling $1,415$3,246 million, $1,395which included a combination of a special dividend of $5.20 per share and an increased quarterly dividend, and $1,486 million in 2022 and 2021, respectively. Additionally, in 2022 and 2021, we made payments of $420 million and $1,410$463 million to our shareholders in 2017, 2016 and 2015,repurchase outstanding ordinary shares, respectively. For additional information related to theseour share repurchases and dividend payments, see Note 1918 to the Consolidated Financial Statements.

Through

In 2022 and 2021, we made net repayments of $4 million and $296 million, respectively, through the issuance and repurchase of commercial paper instruments under our commercial paper program,program.
In 2022, we made net repaymentsreceived a return of $493collateral of $238 million related to the positions held with our counterparties for certain forward-starting interest rate swaps.
In 2021, we prioritized debt reduction resulting in 2017 and received net proceeds of $177 million and $61 milliona $4 billion decrease in 2016 and 2015, respectively.

In March 2017, we issued $1,000 million of 3.5% guaranteed notes due 2027 and received net proceeds of $990 million. The proceeds from these notes, together with available cash, were used to repay $1,000 million of our outstanding 5% senior notes due 2019. We paid $65 million in premiums in connection with this prepayment.

In March 2016, we issued €750 millionlong-term debt. For a detailed discussion of 1.875% guaranteed notes due 2022 and received net proceeds of $812 million. In March 2015, we issued $1,000 million of 4.625% senior notes due 2055 and received net proceeds of $984 million.

Additional information related to our commercial paper program and the issuance and repayment of debt can be found in the Liquidity and Capital Resources section below and infinancing activities for 2021, see Note 1211 to the Consolidated Financial Statements.

Liquidity

In November 2021, foreign currency contracts previously designated as cash flow hedges with an aggregate notional value of $855 million expired. Upon settlement of these foreign currency contracts we paid €790 million ($904 million at the expiry spot rate) to our counterparties and Capital Resources—As of December 31, 2017, we had $2,830received $855 million of unrestricted cash and cash equivalents and marketable securities classified as Short-term investments. We also held $570 million oftri-party repurchase agreements classified as Prepaid expenses and other current assets at December 31, 2017. from our counterparties.
For additional information related to our purchases of marketable securities, which currently include time deposits, certificates of deposit, commercial paper, bondsswaps and limited partnership investments, and our investments intri-party repurchase agreements,currency contracts, see “Investing Activities” above and Note 1413 to the Consolidated Financial Statements.

At

Liquidity and Capital Resources
Overview
We plan to fund our working capital, capital expenditures, debt service, dividends and other cash requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. Debt repayment, and the purchase of shares under our share repurchase authorization, may be funded from cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof.
We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations. Our focus on funding our dividends while remaining committed to a strong investment grade balance sheet continues to be the foundation of our capital allocation strategy.
Cash and Liquid Investments
As of December 31, 2017,2022, we held $557had Cash and cash equivalents totaling $2,151 million, of cashwhich includes $1,044 million in jurisdictions outside of the U.S., principally inprimarily held within the United Kingdom. There are currently no material legal or economic restrictions that would materially impede our transfers of cash.

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Credit Arrangements
At December 31, 2022, we had total debt, including current maturities, of $11,321 million, and $227 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.
We also had total unused availability under our credit facilities of $3,400$3,844 million at December 31, 2017,2022, which included the following:

•$2,5003,050 million under our $2,500$3,250 million revolving credit facility,Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program. Availability under this facility is net of outstanding borrowings, outstanding letters of credit provided under the facility and notes issued under our commercial paper program. A small portion of our availability under this facility is impacted by changes in the euro/U.S. dollar exchange rate. At December 31, 2017,2022, we had no$200 million of outstanding commercial paper, net of discount, and no outstandingborrowings or letters of credit and no outstanding borrowings under thethis facility; and

•$900794 million under our $900 million U.S. accounts receivable securitization facility.Receivables Facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. This facilityAt December 31, 2022 we had no outstanding borrowings or letters of credit at December 31, 2017.

We have $413 million of outstanding letters of credit, bank guarantees,under this facility.

At any time and surety bonds issued under uncommitted credit facilities at December 31, 2017. At December 31, 2017,from time to time, we had totalmay repay or redeem our outstanding debt, including current maturities,purchases of $8,619 million.

our outstanding bonds in the open market, through privately negotiated transactions or a combination thereof, in each case using cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt or proceeds from asset divestitures. Any repayment or redemption of our debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. In connection with such repurchases or redemptions, we may incur cash and non-cash charges, which could be material in the period in which they are incurred.

In accordance with our current interest rate risk management strategy and subject to management’s evaluation of market conditions and the availability of favorable interest rates among other factors, we may from time to time enter into interest rate swap agreements to economically convert a portion of our fixed rate debt to variable rate debt or convert a portion of our variable rate debt to fixed rate debt. For information related to our Senior Notes and Guaranteed Notes and credit facilities, including terms of redemption, see Note 12 to the Consolidated Financial Statements.

Share Repurchases
In May 2017,2022, our shareholders approved a proposal to authorize us to repurchase up to an additional 10%, or approximately 4034.0 million of ourordinary shares, outstanding through November 2018 (“May 2017 Share Repurchase Program”). As a result, the authorization of the remaining unpurchased shares under the share27, 2023, which superseded any prior repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was suspended.authorizations. Our share repurchase programauthorization does not have a stated dollar amount, and purchases may be made through open market purchases, private market transactions or other structured transactions. Repurchased shares could be retired or used for general corporate purposes, including for various employee benefit and compensation plans. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased. In 2017,2022, we have purchased approximately 104.4 million shares under these programsour share repurchase authorization for approximately $845$406 million.
As of February 20, 2018,21, 2023, we had approximately 3431.7 million shares remaining under the current authorization. The timing and amountamounts of additional shares repurchased, if any, will be determined by our Management Board based on itsour evaluation of market conditions and other factors.factors, including any additional authorizations approved by our shareholders. For additional information related to our share repurchase programs,authorizations, see Note 1918 to the Consolidated Financial Statements.

We

Capital Budget
In 2023, we are planning to invest approximately $1.6 billion in capital expenditures. Approximately 70% of the 2023 budget is planned for sustaining maintenance, with the remaining budget supporting profit-generating growth projects.
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Cash Requirements from Contractual and Other Obligations
As part of our ongoing operations, we enter into contractual arrangements that may repay or redeemrequire us to make future cash payments under certain circumstances. Our cash requirements related to contractual and other obligations primarily consist of purchase obligations, principal and interest payments on outstanding debt, lease payments, pension and other post-retirement benefits and income taxes. For more information regarding our debt including purchases of our outstanding bonds in the open market, using cash and cash equivalents, cash from our short-term investments andtri-party repurchase agreements, cash from operating activities, proceeds from the issuance of debt, proceeds from asset divestitures or a combination thereof. In connection with any repayment or redemption of our debt, we may incur cash andnon-cash charges, which could be material in the period in which they are incurred.

In July 2017, we announced our final investment decision to build a world-scale PO/TBA plant in Texas with a capacity of 1 billion pounds of PO and 2.2 billion pounds of TBA. The project is estimated to cost approximately $2.4 billion, with construction estimated to commence in the second half of 2018. We anticipate the project to be completed in the middle of 2021.

We plan to fund our ongoing working capital, capital expenditures, debt servicearrangements, lease obligations, pension and other funding requirements with cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, businesspost-retirement benefits and other factors, many of which are beyond our control. Cashincome taxes, see Notes 11, 12, 14 and cash

equivalents, cash from our short-term investments andtri-party repurchase agreements, cash from operating activities, proceeds from the issuance of debt, or a combination thereof, may be used to fund the purchase of shares under our share repurchase program.

We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations.

As discussed in Note 23 of the Notes16 to the Consolidated Financial Statements, subsequent to our 2017 fiscal year end we entered into a definitive agreement to acquire A. Schulman. We plan to usecash-on-hand to fund the acquisition.

We believe that our current liquidity availability and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due.

Contractual and Other Obligations—The following table summarizes, as of December 31, 2017, our minimum payments for long-term debt, including current maturities, short-term debt, and contractual and other obligations for the next five years and thereafter:

   Total   Payments Due By Period 

Millions of dollars

    2018   2019   2020   2021   2022   Thereafter 

Total debt

  $8,788   $70   $1,005   $5   $1,004   $903   $5,801 

Interest on total debt

   5,566    408    383    358    358    298    3,761 

Advances from customers

   105    61    15    6    3    3    17 

Other

   2,157    1,227    491    35    34    15    355 

Deferred income taxes

   1,655    296    105    104    91    107    952 

Other obligations:

              

Purchase obligations:

              

Take-or-pay contracts

   16,958    2,846    2,898    2,981    2,994    2,718    2,521 

Other contracts

   9,803    4,561    2,026    1,047    618    293    1,258 

Operating leases

   1,445    311    232    194    165    26    517 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $46,477   $9,780   $7,155   $4,730   $5,267   $4,363   $15,182 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Debt—Our debt includes unsecured senior notes, guaranteed notes and various other U.S. andnon-U.S. loans. See Note 12 to the Consolidated Financial Statements for a discussion of covenant requirements under the credit facilities and indentures and additional information regarding our debt facilities.

Interest on Total Debt—Our debt and related party debt agreements contain provisions for the payment of monthly, quarterly or semi-annual interest at a stated rate of interest over the term of the debt.

Pension and other Postretirement Benefits—We maintain several defined benefit pension plans, as described in Note 15 to the Consolidated Financial Statements. Many of our U.S. andnon-U.S. plans are subject to minimum funding requirements; however, the amounts of required future contributions for all our plans are not fixed and can vary significantly due to changes in economic assumptions, liability experience and investment return on plan assets. As a result, we have excluded pension and other postretirement benefit obligations from the Contractual and Other Obligations table above. Our annual contributions may include amounts in excess of minimum required funding levels. Contributions to ournon-U.S. plans in years beyond 2018 are not expected to be materially different than the expected 2018 contributions disclosed in Note 15 to the Consolidated Financial Statements. At December 31, 2017, the projected benefit obligation for our pension plans exceeded the fair value of plan assets by $903 million. Subject to future actuarial gains and losses, as well as future asset earnings, we, together with our consolidated subsidiaries, will be required to fund the discounted obligation of $903 million in future years. We contributed $103 million, $114 million and $107 million to our pension plans in 2017, 2016 and

2015, respectively. We provide other postretirement benefits, primarily medical benefits to eligible participants, as described in Note 15 to the Consolidated Financial Statements. We pay other unfunded postretirement benefits as incurred.

Advances from Customers—We are obligated to deliver products in connection with long-term sales agreements under which advances from customers were received in prior years. These advances are treated as deferred revenue and will be amortized to earnings as product is delivered over the remaining terms of the respective contracts, which range predominantly from 1 to 15 years. The unamortized long-term portion of such advances totaled $44 million as of December 31, 2017.

Other—Other primarily consists of accruals for environmental remediation costs, obligations under deferred compensation arrangements, and anticipated asset retirement obligations. See “Critical Accounting Policies” below for a discussion of obligations for environmental remediation costs.

Deferred Income Taxes—The scheduled settlement of the deferred tax liabilities shown in the table is based on the scheduled reversal of the underlying temporary differences. Actual cash tax payments will vary depending upon future taxable income. See Note 17 to the Consolidated Financial Statements for additional information related to our deferred tax liabilities.

Purchase Obligations—

We are party to various obligations to purchase products and services, principally for raw materials,materials, utilities and industrial gases. These commitmentsgases which are designed to assureensure sources of supply and are not expected to be in excess of normal requirements. The commitments are segregated intotake-or-pay contracts and other contracts. Under thetake-or-pay contracts, we are obligated to makeThese purchase arrangements include provisions which state minimum payments whether or not we take the product or service. Other contracts include contracts that specify minimumpurchase quantities; however, in the event that we do not take the contractual minimum volumes, we are obligated to compensate the vendor only obligated for any resulting economic loss sufferedlosses they suffer. No material fees were paid to vendors for such losses in 2022. Assuming that contractual minimum volumes are purchased at contract prices as of December 31, 2022, these commitments represent approximately 20% of our annual Cost of sales with a weighted average remaining term of 7 years.
We also have purchase obligations under take-or-pay agreements which require us to either buy and take delivery of a minimum quantity of goods or to pay for any shortfall. These arrangements primarily relate to product off-take agreements with joint ventures located in Poland. No material shortfall was paid for quantities not taken under these contracts in 2022. When valued using a contract price as of December 31, 2022, these commitments represent approximately 5% of our annual Cost of sales with a weighted average remaining term of 14 years.
CURRENT BUSINESS OUTLOOK
In January 2023, demand from consumer packaging, oxyfuels and refining markets remained stable. Moderating energy and feedstock costs are providing some offsets to tepid global demand. Nonetheless, challenging market conditions are expected to persist through the first half of 2023. We are aligning production with global demand trends and expect first quarter average utilization rates for assets operated by the vendor. The payments shownus to be 80% for each of our O&P-Americas, O&P-EAI and I&D segments. Start-up activities for the other contracts assume that minimum quantities are purchased. For contractsnew PO/TBA capacity remain on track for the end of the first quarter 2023, with variable pricing terms,approximately half of the minimum payments reflect the contract price at December 31, 2017.

Operating Leases—We lease various facilities and equipment under noncancelable lease arrangements for various periods. See Note 13 to the Consolidated Financial Statements for related lease disclosures.

CURRENT BUSINESS OUTLOOK

Over the past several months, strong global demand and delays inassets nameplate capacity additions across the industry have improved the outlook for 2018. We look forward to realizing the benefits of strong operating rates across our broad portfolio of assets. and continuing the improvement in the reliability and profitability of our Houston refinery.

Unusually cold weather on the U.S. Gulf Coast in the third week of January caused industry disruptions. The impact of these disruptions, which also affected our assets, is currently expected to negatively impact our EBITDA by approximately $45 million. About two thirds of this impact is expected to be borne byproduced and sold during the first year of operations. We expect typical spring and summer seasonal demand improvements and are prepared to leverage any increased economic activity in China as the year progresses.

During 2022, we introduced our O&P—Americas segment with the remaining impact negatively affecting our I&D segment. Planned maintenance scheduled for one cracker at our Channelview Texas facilityvalue enhancement program that is also expectedanticipated to negatively impact our O&P—Americas EBITDA bygenerate approximately $50$575 million in eachrecurring annual Net income improvement by the end of 2025, which, after adding back income taxes and depreciation and amortization of $140 million and $35 million, respectively, results in $750 million of EBITDA. By the firstend of 2023, we anticipate that our value enhancement program will achieve annual recurring Net income of approximately $115 million, which, after adding back income taxes and second quartersdepreciation and amortization of 2018. Our I&D segment is expectedapproximately $25 million and $10 million, respectively, results in $150 million of EBITDA. We estimate costs of $150 million in 2023 to benefit from continued strength in the market for oxyfuels and related products We expect to continue the improvement in reliability and profitability of our Houston refinery in 2018.

Over the coming years, we will advance our growth by increasing the pace of organic business investments while diligently pursuing value-adding inorganic opportunities.

achieve this milestone.

RELATED PARTY TRANSACTIONS

We have related party transactions with our joint venture partners. We believe that such transactions are effected on terms substantially no more or less favorable than those that would have been agreed upon by unrelated parties on an arm’s length basis. See Note 4 to the Consolidated Financial Statements for additional related party disclosures.

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CRITICAL ACCOUNTING POLICIES

AND ESTIMATES

Management applies those accounting policies that it believes best reflect the underlying business and economic events, consistent with accounting principles generally accepted in the U.S. (see, see Note 2 to the Consolidated Financial Statements). Our more critical accounting policies include those related to the valuation of inventory, long-lived assets, the valuation of goodwill, accruals for long-term employee benefit costs such as pension and other postretirement costs, and accruals for taxes based on income.Statements. Inherent in such policies are certain key assumptions and estimates made by management. Managementmanagement and updated periodically updates its estimates used in the preparation of the financial statements based on its latest assessment of the current and projected business and general economic environment.

Inventory

Management believes the following accounting policies and estimates, and the judgments and uncertainties affecting them, are critical in understanding our reported operating results and financial condition.
Inventories—We account for our inventoryraw materials, work-in-progress and finished goods inventories using thelast-in,first-out (“LIFO”) method of accounting.

The cost of raw materials, which represents a substantial portion of our operating expenses, and energy costs generally follow price trends for crude oil and/or natural gas. Crude oil and natural gas prices are subject to many factors, including changes in economic conditions.

Since our inventory consists of manufactured products derived from crude oil, natural gas, natural gas liquids and correlated materials, as well as the associated feedstocks and intermediate chemicals, our inventory market values are generally influenced by changes in the benchmark of crude oil and heavy liquid values and prices for manufactured finished goods. The degree of influence of a particular benchmark may vary from period to period, as the composition of the dollar value LIFO pools change. An actual valuation of inventory under the LIFO method is performed at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on our estimates of expected inventory levels and costs at the end of the year.
The impact of the measurement of each LIFO pool at the lower of cost or market value (“LCM”) is a function of the current market prices and the composition, or product mix, of inventory within the pool at the balance sheet date. Due to natural inventory compositionthe compositions of our LIFO pools, changes variation in pricingmarket prices from period to period doesperiod-to-period do not necessarily result in a linearcorrelate with LCM impact.charges. Additionally, an LCM condition may arise due to a volumetric or price decline in a particular material that had previously provided a positive impact within a pool. As a result, market valuations and LCM conditions are dependent upon the composition and mix of materials on hand at the balance sheet date. In the measurement of an LCM adjustment, the numeric input value for determining the crude oil market price includes pricing that is weighted by volume of inventories held at a point in time, including WTI, Brent and Maya crude oils.

As indicated above, fluctuation in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the lower of cost or market in periods of falling prices and the reversal of those charges in subsequent interim periods as market prices recover. Accordingly, our cost of sales and results of operations may be affected by such fluctuations.

During 2015 and 2016 we incurred

No LCM inventory adjustments of $548 millionvaluation charges were recorded in 2022 or 2021, and $29 million respectively. In 2015 the LCM adjustments were driven by declines in the prices of crude oil, ethylene, propylene, benzene and ETBE. The 2016 adjustment, which occurred in the fourth quarter was driven by a decline in the price of propylene. As a result of the impairments charges taken in 2014, 2015 and 2016 all of our inventory pools are valued at 2015 or 2016year-end market prices prior to indexation. While prices for our products and raw materials are inherently volatile and therefore no prediction can be given with certainty, we do not believe any of our inventory balance at year-end is at risk for impairment. Given the inherent volatility in the prices of our finished goods and raw materials, sustained price declines could result in LCM inventory valuation charges.
Long-Lived Assets Impairment Assessment—The need to test for impairment can be based on several indicators, including a significant reduction in prices of or demand for products produced, a weakened outlook for profitability, a significant reduction in margins, an expectation that a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life, other changes to contracts or changes in the regulatory environment. If the sum of the undiscounted estimated pre-tax cash flows for an asset group is less than the asset group’s carrying value, fair value is calculated for the asset group using an income approach or a market approach when appropriate, and the carrying value is written down to the calculated fair value. For purposes of impairment evaluation, long-lived assets including finite-lived intangible assets must be grouped at the lowest level for which independent cash flows can be identified.
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Significant judgment is involved in developing estimates of future cash flows since the results are based on forecasted financial information prepared using significant assumptions which may include, among other things, projected changes in supply and demand fundamentals (including industry-wide capacity, our planned utilization rate and end-user demand), new technological developments, capital expenditures, new competitors with significant raw material or other cost advantages, changes associated with world economies, the cyclical nature of the chemical and refining industries, uncertainties associated with governmental actions and other economic conditions. Such estimates are consistent with those used in our financial planning and business performance reviews.
When an income approach is used to estimate fair value of our long-lived assets, the cash flows are discounted using a rate that is based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible.
Houston Refinery Impairment—During the fourth quarter of 2021, we identified impairment triggers relating to our Houston refinery’s asset group which resulted in non-cash impairment charges of $624 million. Refer to Note 7 to our Consolidated Financial Statements.
In 2021, the estimate of the Houston refinery’s undiscounted pre-tax cash flows was based on significant assumptions including management’s best estimates of the expected future cash flows, the estimated useful lives of the asset group, and the residual value of the refinery. These estimates required considerable judgment and are sensitive to changes in underlying assumptions such as future commodity prices, margins on refined products, operating rates and capital expenditures including repairs and maintenance. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment determination will prove to be an accurate prediction of the future. The Houston refinery’s estimated fair value was calculated using a market approach which utilized unobservable inputs, which generally consist of market information provided by unrelated third parties. Should our estimates and assumptions significantly change in future periods, it is possible that we may determine future impairment charges. An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the numerous assumptions, including pricing, volumes, discount rates, and market information provided by unrelated third parties that can materially affect our estimates. That is, unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other assumptions.
Equity Method Investments Impairment—Investments in nonconsolidated entities accounted for under the equity method are assessed for impairment when there are indicators of a loss in value, such as a lack of sustained earnings capacity or a current fair value less than the investment’s carrying amount. When it is determined such a loss in value is other than temporary, an impairment charge is recognized for the difference between the investment’s carrying value and its estimated fair value. When determining whether a decline in value is other than temporary, management considers factors such as the duration and extent of the decline, the investee’s financial condition and near-term prospects, and our ability and intention to retain our investment for a period that will be sufficient to allow for any anticipated recovery in the value of the investment. Management’s estimate of fair value of an investment is based on the income approach and/or market approach. For the income approach, the fair value is typically based on the present value of expected future cash flows using discount rates believed to be consistent with those used by principal market participants. For the market approach, since quoted market prices are usually not available, we utilize market multiples of revenue and earnings derived from comparable publicly-traded industrial gases companies.
In response to challenging market conditions in China, during 2022 we assessed our equity method investment in Bora LyondellBasell Petrochemical Co. Ltd. (“BLYB”) for impairment and concluded that our $345 million investment in BLYB is not impaired. However, certain circumstances beyond our control could change in the near-term resulting in the need to recognize a non-cash impairment in subsequent periods.
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Goodwill—As of December 31, 2022, we had goodwill of $1,827 million. Of this time.

Goodwill—Goodwillamount, $1,357 million is related to the acquisition of $570 millionA. Schulman Inc. in 2018, which is included in our APS segment. The remaining goodwill at December 31, 20172022 primarily represents the tax effect of the differences between the tax and book basesbasis of our assets and liabilities resulting from the revaluation of those assets and liabilities to fair value in connection with the Company’s emergence from bankruptcy and adoptionfresh-start accounting in 2010. Additional information on the amount of fresh-start

accounting. goodwill allocated to our reporting units appears in Notes 7 and 20 to the Consolidated Financial Statements.

We evaluate the recoverability of the carrying value of goodwill annually or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill of a reporting unit may not be fully recoverable.

We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the reporting units include, but are not limited to, changes in long-term commodity prices, discount rates, competitive environments, planned capacity, cost factors such as raw material prices, and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

We also have the option to proceed directly to the quantitative impairment test. Under the quantitative impairment test, the fair value of each reporting unit, calculated using a discounted cash flow model, is compared to its carrying value, including goodwill. For the quantitative impairment test, the fair value of the reporting unit is calculated using aThe discounted cash-flow model. Such acash flow model inherently utilizes a significant number of estimates and assumptions, including operating margins, tax rates, discount rates, capital expenditures and working capital changes. If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized.

recognized, up to a maximum amount of goodwill allocated to that reporting unit.

For 20172022 and 2016,2021, management performed a qualitative impairment assessment of our reporting units, which indicated that it was more likely than not that the fair value of our reporting units was greater than their carrying value.value including goodwill. Accordingly, a quantitative goodwill impairment test was not required. Accordingly,required, and no goodwill impairment was recognized in 20172022 or 2016.

2021. See Note 20 to the Consolidated Financial Statements regarding subsequent events impacting our reporting units.

Long-Term Employee Benefit Costs—Our costs for long-term employee benefits, particularly pension and other postretirementpost-retirement medical and life insurance benefits, are incurred over long periods of time, and involve many uncertainties over those periods. The net periodic benefit cost attributable to current periods is based on several assumptions about such future uncertainties and is sensitive to changes in those assumptions. It is management’s responsibility, often with the assistance of independent experts, to select assumptions that in its judgment represent its best estimates of the future effects of those uncertainties. It also is management’s responsibilityuncertainties and to review those assumptions periodically to reflect changes in economic or other factors that affect those assumptions.

factors.

The current benefit service costs, as well as the existing liabilities, for pensions and other postretirementpost-retirement benefits are measured on a discounted present value basis. The discount rate is a current rate, related to the rate at which the liabilities could be settled. Our assumed discount rate is based on yield information for high-quality corporate bonds with durations comparable to the expected cash settlement of our obligations. For the purpose of measuring the benefit obligations at December 31, 2017,2022, we used a weighted average discount rate of 3.73%5.50% for the U.S. plans, which reflects the different terms of the related benefit obligations. The weighted average discount rate used to measure obligations fornon-U.S. plans at December 31, 20172022, was 2.13%3.99%, reflecting market interest rates. The discount rates in effect at December 31, 20172022 will be used to measure net periodic benefit cost during 2018.

2023.

The benefit obligation and the net periodic benefit cost of other postretirementpost-retirement medical benefits are also measured based on assumed rates of future increase in the per capita cost of covered health care benefits. As of December 31, 2017,2022, the assumed rate of increase for our U.S. plans was 6.7%6.5%, decreasing to 4.5% in 20382031 and thereafter. A one hundred basis point change in the health care cost trend rate assumption as
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Table of December 31, 2017 would have resulted in a $18 million increase or $12 million decrease in the accumulated other postretirement benefit liability, for ournon-U.S. plans and would have resulted in an increase or decrease of less than $1 million for U.S. plans. Due to limits on our maximum contribution level under the medical plan, there would have been no significant effect on either our benefit liability or net periodic cost.

Contents

The net periodic benefit cost of pension benefits included in expense also is affected by the expected long-term rate of return on plan assets assumption. Investment returns that are recognized currently in net income represent the expected long-term rate of return on plan assets applied to a market-related value of plan assets, which for us, is defined as the market value of assets. The expected rate of return on plan assets is a longer-term rate and is expected to change less frequently than the current assumed discount rate, reflecting long-term market expectations, rather than current fluctuations in market conditions.

The weighted average expected long-term rate of return on assets in our U.S. plans of 8.00%7.25% is based on the average level of earnings that our independent pension investment advisor had advised could be expected to be earned over time and 2.15%, for ournon-U.S. plan assets is based on an expectation and asset allocation that varies by region. In 2018, thetime. The weighted average expected long-term rate of return on assets in our U.S.non-U.S. plans of 1.85% is expected to be 7.50%.based on expectations and asset allocations that vary by region. The asset allocations are summarized in Note 1514 to the Consolidated Financial Statements. The actual returns in 2017 were gains of 14.45% and 8.82% for our U.S. andnon-U.S. plan assets, respectively.

The actual rate of return on plan assets may differ from the expected rate due to the volatility normally experienced in capital markets. Management’s goal is to manage the investments over the long term to achieve optimal returns with an acceptable level of risk and volatility.

Net periodic pension cost recognized each year includes the expected asset earnings, rather than the actual earnings or loss. Along with other gains and losses, this unrecognized amount, to the extent it cumulatively exceeds 10% of the greater of the projected benefit obligation or the market related value of the plan assets for the respective plan, is recognized as additional net periodic benefit cost over the average remaining service period of the participants in each plan.

The following table reflects the sensitivity of the benefit obligations and the net periodic benefit costs of our pension plans to changes in the actuarial assumptions:

   Effects on
Benefit Obligations
in 2017		   Effects on Net
Periodic Pension
Costs
in 2018		 

Millions of dollars

  U.S.   Non-U.S.   U.S.   Non-U.S. 

Projected benefit obligations at December 31, 2017

  $1,924   $1,511   $—     $—   

Projected net periodic pension costs in 2018

       11    54 

Discount rate increases by 100 basis points

   (177)    (190)    (7)    (7) 

Discount rate decreases by 100 basis points

   215    231    12    12 

 Effects on
Benefit Obligations
in 2022		Effects on Net
Periodic Pension
Costs in 2023
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Projected benefit obligations at December 31, 2022$1,140 $1,276 $— $— 
Projected net periodic pension costs in 2023— — 57 47 
Discount rate increases by 100 basis points(94)(163)(7)(7)
Discount rate decreases by 100 basis points111 192 8 10 
The sensitivity of our postretirementpost-retirement benefit plans obligations and net periodic benefit costs to changes in actuarial assumptions are reflected in the following table:

   Effects on
Benefit Obligations
in 2017		   Effects on Net
Periodic Benefit
Costs
in 2018		 

Millions of dollars

  U.S.   Non-U.S.   U.S.   Non-U.S. 

Projected benefit obligations at December 31, 2017

  $280   $62   $—     $—   

Projected net periodic benefit costs in 2018

       11    4 

Discount rate increases by 100 basis points

   (24)    —      (2)    —   

Discount rate decreases by 100 basis points

   29    —      (2)    —   

 Effects on
Benefit Obligations
in 2022		Effects on Net
Periodic Benefit
Costs in 2023
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Projected benefit obligations at December 31, 2022$153 $41 $— $— 
Projected net periodic benefit costs in 2023— — (2)2 
Discount rate increases by 100 basis points(11)(8)— (1)
Discount rate decreases by 100 basis points12 8 1 1 
Additional information on the key assumptions underlying these benefit costs appears in Note 1514 to the Consolidated Financial Statements.

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Accruals for Taxes Based on Income—The determination of our provision for income taxes and the calculation of our tax benefits and liabilities is subject to management’s estimates and judgments due to the complexity of the tax laws and regulations in the tax jurisdictions in which we operate. Uncertainties exist with respect to interpretation of these complex laws and regulations.

Deferred tax assets and liabilities are determined based on temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,basis, and are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. At December 31, 2017, the measurement of our deferred tax balances was materially affected by the U.S. enactment of “H.R.1,” also known as the Tax Act, as explained in Note 17 to the Consolidated Financial Statements.

We recognize future tax benefits to the extent that the realization of these benefits is more likely than not. Our current provision for income taxes is impacted by the recognition and release of valuation allowances related to net deferred tax assets in certain jurisdictions. Further changes to these valuation allowances may impact our future provision for income taxes, which will include no tax benefit with respect to losses incurred and no tax expense with respect to income generated in these countries until the respective valuation allowance is eliminated.

We recognize the financial statement benefits with respect to an uncertain income tax position that we have taken or may take on an income tax return when we believe it is more likely than not that the position will be sustained with the tax authorities. For a position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest cumulative amount that is greater than 50 percent likely of being realized.

For further information related to our income taxes, see Note 17 to the Consolidated Financial Statements.

ACCOUNTING AND REPORTING CHANGES

For a discussion of the potential impact of new accounting pronouncements on our Consolidated Financial Statements, see Note 2 to the Consolidated Financial Statements.

Item 7A.Quantitative and Qualitative Disclosures About Market Risk.

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Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.
See Note 1413 to the Consolidated Financial Statements for further discussion of LyondellBasell Industries N.V.’sour management of commodity price risk, foreign currency exposureexchange risk and interest rate risk through its use of derivative instruments and hedging activities.

risk.

Commodity Price Risk

A substantial portion of—Prices for our products and raw materials are commodities whose prices fluctuate as marketsubject to changes in supply and demand fundamentals change. Accordingly, product marginsdemand. Natural gas, crude oil, utilities, and refined products, along with feedstocks for ethylene and propylene production, constitute the level ofmain commodity exposures. Pricing terms in our profitability tendraw material contracts are generally indexed to fluctuatemarket prices. Changes in market prices for raw materials generally correlate with market prices for our products. In certain sales contracts, we may negotiate pricing terms to better align with changes in the business cycle. We try to protect against such instability through various business strategies. These include provisions in sales contracts allowing us to pass on higher raw material costs through timely price increases, formula price contracts to transfer or sharecosts. We also selectively enter commodity price risk, and increasing the depth and breadth of our product portfolio.

In addition, we use commodity swap, option and futures contracts with various terms to manage commodity price risk. The impact of a small portion of10% change in commodity prices at December 31, 2022 and 2021 would not materially impact the volatility related to raw materials and product purchases and sales. Such contracts are generally limited to durations of one year or less. Hedge accounting has been elected for somefair values of our commodity contracts in the periods presented. Market risks created by these derivative instruments and themark-to-market valuations of open positions are considered by management prior to execution and monitored regularly.

The estimated fair value and notional amounts of our open commodity futures contracts and swap contracts are shown in the table below:

  December 31, 2017 
     Notional Amounts       

Millions of dollars

 Fair Value  Value  Volumes  Volume Unit  Maturity Dates 

Futures and swaps not designated as hedges:

     

Heating oil

 $(1)  $8   4   million gallons   
January 2018
- February 2018		 
 

Crude oil

  16   48   35   million gallons   
January 2018
- March 2018		 
 

Gasoline

  (15)   9   40   million gallons   
January 2018
- February 2018		 
 

Naphtha

  2   57   100   million kilograms   January 2018 

Swaps designated as cash-flow hedges:

     

Ethane

  (8)   102   375   million gallons   
January 2018-
December 2019		 
 
 

 

 

  

 

 

    
 $(6)  $224    
 

 

 

  

 

 

    
  December 31, 2016 
     Notional Amounts       

Millions of dollars

 Fair Value  Value  Volumes  Volume Unit  Maturity Dates 

Futures and swaps not designated as hedges:

     

Heating oil

 $1  $20   12   million gallons   February 2017 

Crude oil

  (1)   30   23   million gallons   
February 2017
- March 2017		 
 

Naptha

  1   48   100   million kilograms   January 2017 

Swaps designated as cash-flow hedges:

     

Ethane

  3   58   184   million gallons   

January 2017

- December 2019

 

 

 

 

 

  

 

 

    
 $4  $156    
 

 

 

  

 

 

    

We use value at risk (“VAR”), stress testing and scenario analysis for risk measurement and control purposes.

VAR estimates the maximum potential loss in fair market values, given a certain move in prices over a certain period of time, using specified confidence levels.

Using sensitivity analysis and hypothetical changes in market prices ranging from 9% to 13%, which represent a three-month volatility range of the underlying products noted in the table above, the effect on our pretax income would be approximately $1 million. The quantitative information about market risk is necessarily limited because it does not take into account the effects of the underlying operating transactions.

contracts.

Foreign Exchange Risk

—We manufacture and market our products in many countries throughout the world and, as a result, are exposed to changes in foreign currency exchange rates.

A significant portion Our reporting currency is the U.S. dollar. Many of our reportingoperating entities use the euro as their functional currency. Our reporting currency is the U.S. dollar. The translation gains or losses that result from the process of translating the euro denominated financial statements to U.S. dollarsTranslation adjustments are deferred in accumulatedAccumulated other comprehensive income (“AOCI”) until such time as those entities may be liquidated or sold. Changes in the value of the U.S. dollar relative to the euro can therefore have a significant impact on comprehensive income.

We have entered into hedging arrangementsenter foreign currency derivatives that are designated as net investment hedges to reduce the volatility in stockholders’Shareholders’ equity resulting from foreign currency fluctuationtranslation adjustments associated with our net investments in foreign operations. We also enter foreign currency contracts that are designated as cash flow hedges to manage the variability in cash flows associated with intercompany debt balances. The table below illustrates the impact on Other comprehensive loss of a 10% fluctuation in the foreign currency rate associated with each net investment hedge and the EURIBOR and LIBOR rates associated with basis swaps are shown in the table below:

December 31, 2017

Net Investment Hedges

Notional Amount

10% Variance on

Foreign Currency Rate

Impact on Other
Comprehensive Loss

Basis Swaps

€742 millioneuro/U.S. dollar rate$91 million
EURIBOR and LIBOR ratesLess than $1 million

Guaranteed Euro Notes Due 2022

€750 millioneuro/U.S. dollar rate$90 million

hedges at December 31:

Notional Amount10% Variance on
Foreign Currency Rate		Impact on Other
Comprehensive Loss
Millions of euro/dollars2022202120222021
Net investment hedges:
Cross currency basis swaps€617 €617 euro/U.S. dollar rate$67 $71 
Cross currency swaps€750 €750 euro/U.S. dollar rate$75 $92 
Forward exchange contracts€1,350 €1,250 euro/U.S. dollar rate$138 $142 
Cash flow hedges:
Cross currency swaps€1,052 €1,051 euro/U.S. dollar rate$113 $134 
Some of our operationsconsolidated entities enter into transactions that are not denominated in their functional currency. This results in exposure to foreign currency risk for financial instruments, including, but not limited to, third partythird-party and intercompany receivables and payables and intercompany loans.

Our policy is to maintain a balanced position in foreign currencies to minimize exchange gains and losses arising from changes in exchange rates. We maintain risk management control practices to monitor the foreign currency risk attributable to our inter-company and third party outstanding foreign currency balances. These practices involve the centralization of our exposure to underlying currencies that are not subject to central bank and/or country specific restrictions. By centralizing most of our foreign currency exposure into one subsidiary, we are able to take advantage of any natural offsets thereby reducing the overall impact of changes in foreign currency rates on our earnings. At December 31, 2017, a 10% fluctuation compared to the U.S. dollar in the underlying currencies that have no central bank or other currency restrictions related tonon-hedged monetary net assets would have had a resulting additional impact to earnings
55
Table of approximately $2 million.

Our policy is to maintain an approximately balanced position in foreign currencies to minimize exchange gains and losses arising from changes in exchange rates. Contents

To minimize the effects of our net currency exchange exposures, we enter into foreign currency spot and forward exchange contracts and in some cases, cross-currency swaps.

We also engage in short-term foreignforward exchange swaps in ordercontracts to roll certain hedge positions andmanage our net exposure to make funds available for intercompany financing. Our net position in foreign currencies is monitored daily.

We have entered into $2,300 million ofnon-cancellable cross-currency swaps, which we designated as foreign currency cash flow hedges, to reduce the variability in the functional currency equivalent cash flows of certain foreign currency denominated intercompany notes. At December 31, 2017, these foreign currency contracts have maturity dates ranging from 2021 to 2027 and their fair value was a net liability of $4 million. A 10% fluctuation compared to the U.S. dollar would have had a resulting additional impact to Other comprehensive income (loss) of approximately $265 million.

Other income, net in the Consolidated Statements of Income reflected losses of $1 million, $4 million and $7 million for 2017, 2016 and 2015, respectively, in net exchange rate gains and losses. For forward contracts, including swap transactions, that economically hedge recognized monetary assets and liabilities in foreign currencies, no hedge accounting is applied.economic hedges. Changes in the fair value of these foreign currency forward contracts are reported in the Consolidated Statements of Income and offset the currency exchange results recognized on foreign currency balances.

Other (expense) income, net, in the

assets Consolidated Statements of Income reflects net foreign currency losses of $14 million and $2 million in 2022 and liabilities. At2021, respectively. As of December 31, 2017, these2022, our foreign currency contracts which willthat are accounted for as economic hedges mature inbetween January 2018,2023 and September 2023, inclusively, and had an aggregatedaggregate notional amount of $1,014 million and the fair value was a net liability of $11$396 million. A 10% fluctuation compared to the U.S. dollar would have had a resultingresulted in an additional impact to earnings of approximately $10 million.

$17 million and $4 million in 2022 and 2021, respectively.

Interest Rate Risk

Interest rate risk management is viewed as atrade-off between cost and risk. The cost of interest is generally lower for short-term debt and higher for long-term debt, and lower for floating rate debt and higher for fixed rate debt. However, the risk associated with interest rates is inversely related to the cost, with short-term debt carrying a higher refinancing risk and floating rate debt having higher interest rate volatility. Our interest rate risk management strategy attempts to optimize this cost/risk/reward tradeoff.

—We are exposed to interest rate risk with respect to our fixedfixed-rate and variable ratevariable-rate debt. Fluctuations in interest rates impact the fair value of fixed-rate debt as well as pretax earnings stemming fromand expose us to the risk that we may need to refinance debt at higher rates. Fluctuations in interest rates impact interest expense onfrom our variable-rate debt. To minimize earnings at risk we target to maintain floating rate debt equal to our cash and cash equivalents, marketable securities andtri-party repurchase agreements, as those assets are invested in floating rate instruments. As part of our interest rate risk management strategy, we also enter intotarget to maintain floating-rate debt, through the use of interest rate swaps.

Pre-issuanceswaps and issuance of variable-rate debt, equal to our cash and cash equivalents, as those assets earn interest rate—Apre-issuancebased on floating-rates.

Pre-issuance interest rate strategy is utilized to—To mitigate the risk that benchmark interest rates (i.e. U.S. Treasury,mid-swaps, etc.) willmay increase between the timein connection with future financing activities, we adopted a decision has been made to issue debt and when the actual debt offering transpires. In March 2015pre-issuance interest rate strategy, under which we entered into forward-starting interest rate swaps to mitigate the risk of adverse changes in the benchmark interest rates on the anticipated refinancing of our senior notes due 2019. These interest rate swaps will be terminated upon debt issuance. At December 31, 2017, the total notional amount of these interest rate contractsthat are designated as cash flow hedges was $1,000 million and its fair value was a net liability of $41 million.hedges. We estimate that a 10% change in market interest rates as of December 31, 20172022 and 2021, would change the fair value of ourthese forward-starting interest rate swap outstandingswaps by approximately $23 million and would have had a resulting impact on Other comprehensive income (loss) of approximately $47 million.

$48 million, respectively.

Fixed-rate debt—We enteredenter into interest rate swaps as part ofthat effectively convert our fixed-rate debt to variable-rate debt. These interest rate risk management strategy.swaps are designated as fair value hedges. At December 31, 2017,2022 and 2021, the total notional amount of these interest rate swaps designated as fair value hedges, which have maturity dates ranging from 2019 to 2027, was $3,000$2,164 million and their fair value was a net liability of $1 million.

$1,163 million, respectively.

At December 31, 2017,2022, after giving consideration to the $3,000 million of fixed-rate debt that we have effectively converted to floating through these U.S. dollarfixed-for-floating interest rate swaps,variable-rate debt, approximately 66%81% of our debt portfolio, on a gross basis, incurred interest at a fixed-rate and the remaining 34%19% of the portfolio incurred interest at a variable-rate. We estimate that a 10% change in market interest rates as of December 31, 20172022, would change the fair value of ourthese interest rate swaps outstanding andby approximately $35 million; while an equivalent change in market interest rates as of December 31, 2021, would have had a resultingnot materially impact on our pretax incomethe fair value of approximately $29 million.

these interest rate swaps.

Variable-rate debt—Our variable rateAt December 31, 2022, our variable-rate debt consistsconsisted of $200 million outstanding under our $2,500Commercial Paper Program. We also have available borrowing capacity under our $3,250 million Senior Revolving Credit Facility and our $900 million U.S. Receivables Securitization Facility and our Commercial Paper Program.Facility. At December 31, 2017,2022, there were no outstanding borrowings under our Senior Revolving Credit Facility, U.S. Receivables Securitization facility or our Commercial Paper Program. We estimate that a 10% change in interest rates would have had less than a $1 million impact on earnings basedthese facilities. Based on our average variable-rate debt outstanding per year.

Item 8.Financial Statements and Supplementary Data.

year, we estimate that a 10% change in market interest rates as of December 31, 2022 and 2021 would not materially impact the fair value of these facilities.

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Item 8.      Financial Statements and Supplementary Data.

Index to the Consolidated Financial Statements

Page

LYONDELLBASELL INDUSTRIES N.V.

62
58

63
59

Consolidated Financial Statements:

Consolidated Statements of Income

65
62

Consolidated Statements of Comprehensive Income

66
63

Consolidated Balance Sheets

67
64

Consolidated Statements of Cash Flows

69
66

Consolidated Statements of Stockholders’Shareholders’ Equity

71
68

Notes to the Consolidated Financial Statements

72
69


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MANAGEMENT’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Management of the Company, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

We conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 20172022 based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on our evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2017.

2022.

The effectiveness of our internal control over financial reporting as of December 31, 20172022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.





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Report of Independent Registered Public Accounting Firm

To the Supervisory Board of Directors and StockholdersShareholders of LyondellBasell Industries N.V.:


Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of LyondellBasell Industries N.V. and its subsidiaries (the “Company”) as of December 31, 20172022 and 2016,2021, and the related consolidated statements of income, of comprehensive income, stockholders’of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2017,2022, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’sCompany's internal control over financial reporting as of December 31, 2017,2022, based on criteria established inInternal Control—Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20172022 and 2016,2021, and the results of theirits operations and theirits cash flows for each of the three years in the period ended December 31, 20172022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2022, based on criteria established inInternal Control—Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’sCompany's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’sCompany's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Taxation - Provisions for unrecognized tax benefits
As described in Notes 2, 9, 10, and 16 to the consolidated financial statements, as of December 31, 2022, the Company has recorded an income tax provision of $882 million, income tax receivables of $285 million, income tax payables of $242 million, and net deferred tax liabilities of $2,701 million related to which they have reported $271 million of unrecognized tax benefits. The Company operates in multiple jurisdictions throughout the world, and its tax returns are periodically audited or subjected to review by tax authorities. As a result, there is an uncertainty in income taxes recognized in the Company’s consolidated financial statements. Management recognizes uncertain income tax positions when it is more likely than not, based on the technical merits, that the position or a portion thereof will be sustained upon examination. As disclosed by management, there continues to be increased attention to the tax practices of multinational companies, in particular in the U.S. and Europe where the Company operates.
The principal considerations for our determination that performing procedures relating to the provision for unrecognized tax benefits is a critical audit matter are (i) the significant judgment by management when determining provisions for unrecognized tax benefits, including a high degree of estimation uncertainty relative to the complexity of tax laws, frequency of tax audits, and potential for adjustments as a result of such tax audits; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s timely identification of tax uncertainties; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the identification and recognition of the liabilities for unrecognized tax benefits and controls addressing completeness of the uncertain tax positions. These procedures also included, among others (i) testing management’s assessment of the technical merits of tax positions and estimates of the amount of tax benefit expected to be sustained; (ii) testing the completeness of management’s assessment of both the identification and possible outcomes of uncertain tax positions; and (iii) evaluating the status and results of tax audits with the relevant tax authorities. Professionals with specialized skill and knowledge were used to assist in evaluating the completeness of the Company’s uncertain tax positions, including evaluating the reasonableness of management’s assessment of whether tax positions are more likely than not of being sustained and the amount of potential benefit to be realized, as well as the determination and the application of relevant tax laws.


/s/ PricewaterhouseCoopers LLP

Houston, Texas

February 22, 2018

23, 2023


We have served as the Company’s auditor since 2008.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF INCOME

   Year Ended December 31, 

Millions of dollars, except earnings per share

  2017  2016  2015 

Sales and other operating revenues:

    

Trade

  $33,705  $28,454  $31,930 

Related parties

   779   729   805 
  

 

 

  

 

 

  

 

 

 
   34,484   29,183   32,735 

Operating costs and expenses:

    

Cost of sales

   28,059   23,191   25,683 

Selling, general and administrative expenses

   859   833   828 

Research and development expenses

   106   99   102 
  

 

 

  

 

 

  

 

 

 
   29,024   24,123   26,613 

Operating income

   5,460   5,060   6,122 

Interest expense

   (491)   (322)   (310) 

Interest income

   24   17   33 

Other income, net

   179   111   25 
  

 

 

  

 

 

  

 

 

 

Income from continuing operations before equity investments and income taxes

   5,172   4,866   5,870 

Income from equity investments

   321   367   339 
  

 

 

  

 

 

  

 

 

 

Income from continuing operations before income taxes

   5,493   5,233   6,209 

Provision for income taxes

   598   1,386   1,730 
  

 

 

  

 

 

  

 

 

 

Income from continuing operations

   4,895   3,847   4,479 

Loss from discontinued operations, net of tax

   (18)   (10)   (5) 
  

 

 

  

 

 

  

 

 

 

Net income

   4,877   3,837   4,474 

Net (income) loss attributable to non-controlling interests

   2   (1)   2 
  

 

 

  

 

 

  

 

 

 

Net income attributable to the Company shareholders

  $4,879  $3,836  $4,476 
  

 

 

  

 

 

  

 

 

 

Earnings per share:

    

Net income (loss) attributable to the Company shareholders —

    

Basic:

    

Continuing operations

  $12.28  $9.17  $9.63 

Discontinued operations

   (0.05)   (0.02)   (0.01) 
  

 

 

  

 

 

  

 

 

 
  $12.23  $9.15  $9.62 
  

 

 

  

 

 

  

 

 

 

Diluted:

    

Continuing operations

  $12.28  $9.15  $9.60 

Discontinued operations

   (0.05)   (0.02)   (0.01) 
  

 

 

  

 

 

  

 

 

 
  $12.23  $9.13  $9.59 
  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
Millions of dollars, except earnings per share202220212020
Sales and other operating revenues:
Trade$49,439 $45,135 $26,995 
Related parties1,012 1,038 758 
50,451 46,173 27,753 
Operating costs and expenses:
Cost of sales43,847 37,397 24,359 
Impairments69 624 582 
Selling, general and administrative expenses1,310 1,255 1,140 
Research and development expenses124 124 113 
45,350 39,400 26,194 
Operating income5,101 6,773 1,559 
Interest expense(287)(519)(526)
Interest income29 9 12 
Other (expense) income, net(72)62 85 
Income from continuing operations before equity investments and income taxes4,771 6,325 1,130 
Income from equity investments5 461 256 
Income from continuing operations before income taxes4,776 6,786 1,386 
Provision for (benefit from) income taxes882 1,163 (43)
Income from continuing operations3,894 5,623 1,429 
Loss from discontinued operations, net of tax(5)(6)(2)
Net income3,889 5,617 1,427 
Dividends on redeemable non-controlling interests(7)(7)(7)
Net income attributable to the Company shareholders$3,882 $5,610 $1,420 
Earnings per share:
Net income (loss) attributable to the Company shareholders —
Basic:
Continuing operations$11.86 $16.79 $4.25 
Discontinued operations(0.02)(0.02)(0.01)
$11.84 $16.77 $4.24 
Diluted:  
Continuing operations$11.83 $16.77 $4.25 
Discontinued operations(0.02)(0.02)(0.01)
$11.81 $16.75 $4.24 
See Notes to the Consolidated Financial Statements.


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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Net income

  $4,877  $3,837  $4,474 

Other comprehensive income (loss), net of tax—

    

Financial derivatives

   (45)   4   1 

Unrealized gains (losses) on available-for-sale securities

   (3)   6   (5) 

Unrealized gains on available-for-sale securities held by equity investees

   19   —     —   

Defined pension and other postretirement benefit plans

   77   (70)   21 

Foreign currency translations

   178   (13)   (429) 
  

 

 

  

 

 

  

 

 

 

Total other comprehensive income (loss), net of tax

   226   (73)   (412) 
  

 

 

  

 

 

  

 

 

 

Comprehensive income

   5,103   3,764   4,062 

Comprehensive (income) loss attributable to non-controlling interests

   2   (1)   2 
  

 

 

  

 

 

  

 

 

 

Comprehensive income attributable to the Company shareholders

  $5,105  $3,763  $4,064 
  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
Millions of dollars202220212020
Net income$3,889 $5,617 $1,427 
Other comprehensive income (loss), net of tax—
Financial derivatives208 72 (226)
Unrealized (losses) gains on available-for-sale debt securities— (1)1 
Defined benefit pension and other postretirement benefit plans346 224 (41)
Foreign currency translations(123)(155)107 
Total other comprehensive income (loss), net of tax431 140 (159)
Comprehensive income4,320 5,757 1,268 
Dividends on redeemable non-controlling interests(7)(7)(7)
Comprehensive income attributable to the Company shareholders$4,313 $5,750 $1,261 
See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

   December 31, 

Millions of dollars

  2017   2016 

ASSETS

    

Current assets:

    

Cash and cash equivalents

  $1,523   $875 

Restricted cash

   5    3 

Short-term investments

   1,307    1,147 

Accounts receivable:

    

Trade, net

   3,359    2,716 

Related parties

   180    126 

Inventories

   4,217    3,809 

Prepaid expenses and other current assets

   1,147    923 
  

 

 

   

 

 

 

Total current assets

   11,738    9,599 

Property, plant and equipment, net

   10,997    10,137 

Investments and long-term receivables:

    

Investment in PO joint ventures

   420    415 

Equity investments

   1,635    1,575 

Other investments and long-term receivables

   17    20 

Goodwill

   570    528 

Intangible assets, net

   568    550 

Other assets

   261    618 
  

 

 

   

 

 

 

Total assets

  $26,206   $23,442 
  

 

 

   

 

 

 

 December 31,
Millions of dollars20222021
ASSETS
Current assets:
Cash and cash equivalents$2,151 $1,472 
Restricted cash5 5 
Short-term investments— 9 
Accounts receivable:
Trade, net3,392 4,565 
Related parties201 243 
Inventories4,804 4,901 
Prepaid expenses and other current assets1,292 1,022 
Total current assets11,845 12,217 
Operating lease assets1,725 1,946 
Property, plant and equipment, net15,387 14,556 
Equity investments4,295 4,786 
Goodwill1,827 1,875 
Intangible assets, net662 695 
Other assets624 667 
Total assets$36,365 $36,742 
See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

   December 31, 

Millions of dollars, except shares and par value data

  2017  2016 

LIABILITIES AND EQUITY

 

Current liabilities:

   

Current maturities of long-term debt

  $2  $2 

Short-term debt

   68   594 

Accounts payable:

   

Trade

   2,258   2,028 

Related parties

   637   501 

Accrued liabilities

   1,812   1,415 
  

 

 

  

 

 

 

Total current liabilities

   4,777   4,540 

Long-term debt

   8,549   8,385 

Other liabilities

   2,275   2,113��

Deferred income taxes

   1,655   2,331 

Commitments and contingencies

   

Stockholders’ equity:

   

Ordinary shares, €0.04 par value, 1,275 million shares authorized, 394,512,054 and 404,046,331 shares outstanding, respectively

   31   31 

Additional paid-in capital

   10,206   10,191 

Retained earnings

   15,746   12,282 

Accumulated other comprehensive loss

   (1,285)   (1,511) 

Treasury stock, at cost, 183,928,109 and 174,389,139 ordinary shares, respectively

   (15,749)   (14,945) 
  

 

 

  

 

 

 

Total Company share of stockholders’ equity

   8,949   6,048 

Non-controlling interests

   1   25 
  

 

 

  

 

 

 

Total equity

   8,950   6,073 
  

 

 

  

 

 

 

Total liabilities and equity

  $26,206  $23,442 
  

 

 

  

 

 

 

 December 31,
Millions of dollars, except shares and par value data20222021
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Current liabilities:
Current maturities of long-term debt$432 $6 
Short-term debt349 362 
Accounts payable:
Trade3,106 3,460 
Related parties477 831 
Accrued liabilities2,396 2,571 
Total current liabilities6,760 7,230 
Long-term debt10,540 11,246 
Operating lease liabilities1,510 1,649 
Other liabilities1,954 2,295 
Deferred income taxes2,858 2,334 
Commitments and contingencies
Redeemable non-controlling interests114 116 
Shareholders’ equity:
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 325,723,567 and 329,536,389 shares outstanding, respectively19 19 
Additional paid-in capital6,119 6,044 
Retained earnings9,195 8,563 
Accumulated other comprehensive loss(1,372)(1,803)
Treasury stock, at cost, 14,698,931 and 10,675,605 ordinary shares, respectively(1,346)(965)
Total Company share of shareholders’ equity12,615 11,858 
Non-controlling interests14 14 
Total equity12,629 11,872 
Total liabilities, redeemable non-controlling interests and equity$36,365 $36,742 
See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Cash flows from operating activities:

 

Net income

  $4,877  $3,837  $4,474 

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

   1,174   1,064   1,047 

Amortization of debt-related costs

   15   16   16 

Charges related to repayment of debt

   49   —     —   

Share-based compensation

   55   38   53 

Inventory valuation adjustment

   —     29   548 

Equity investments—

    

Equity income

   (321)   (367)   (339) 

Distribution of earnings, net of tax

   309   385   285 

Deferred income taxes

   (587)   357   181 

Gain on sales of business and equity method investments

   (108)   (84)   —   

Changes in assets and liabilities that provided (used) cash:

    

Accounts receivable

   (521)   (383)   780 

Inventories

   (237)   123   (240) 

Accounts payable

   165   383   (786) 

Other, net

   336   208   (177) 
  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

   5,206   5,606   5,842 
  

 

 

  

 

 

  

 

 

 

Cash flows from investing activities:

    

Expenditures for property, plant and equipment

   (1,547)   (2,243)   (1,440) 

Payments for repurchase agreements

   (512)   (674)   (397) 

Proceeds from repurchase agreements

   381   685   350 

Purchases of available-for-sale securities

   (653)   (688)   (2,073) 

Proceeds from sales and maturities of available-for-sale securities

   499   674   2,489 

Purchases of held-to-maturity securities

   —     (76)   —   

Proceeds from maturities of held-to-maturity securities

   75   —     —   

Purchases of business, equity method investment and non-controlling interest

   (21)   (65)   —   

Net proceeds from sales of business and equity method investments

   155   209   —   

Proceeds from settlement of net investment hedges

   609   1,295   —   

Payments for settlement of net investment hedges

   (658)   (1,356)   —   

Other, net

   (84)   (62)   25 
  

 

 

  

 

 

  

 

 

 

Net cash used in investing activities

   (1,756)   (2,301)   (1,046) 
  

 

 

  

 

 

  

 

 

 


 Year Ended December 31,
Millions of dollars202220212020
Cash flows from operating activities:
Net income$3,889 $5,617 $1,427 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization1,267 1,393 1,385 
Impairments69 624 582 
Amortization of debt-related costs14 35 21 
Share-based compensation70 66 55 
Inventory valuation charges— — 16 
Equity investments—
Equity income(5)(461)(256)
Distributions of earnings, net of tax349 315 159 
Deferred income tax provision (benefit)369 (198)331 
Changes in assets and liabilities that provided (used) cash:
Accounts receivable1,005 (1,519)(246)
Inventories(91)(742)340 
Accounts payable(464)1,301 217 
Other, net(353)1,264 (627)
Net cash provided by operating activities6,119 7,695 3,404 
Cash flows from investing activities:
Expenditures for property, plant and equipment(1,890)(1,959)(1,947)
Purchases of available-for-sale debt securities— — (270)
Proceeds from sales and maturities of available-for-sale debt securities— 346 114 
Purchases of equity securities— — (608)
Proceeds from equity securities8 335 313 
Acquisition of equity method investment(4)(106)(2,440)
Proceeds from settlement of net investment hedges614 358 — 
Payments for settlement of net investment hedges(501)(355)— 
Other, net(204)(121)(68)
Net cash used in investing activities$(1,977)$(1,502)$(4,906)
See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS — Continued

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Cash flows from financing activities:

    

Repurchases of Company ordinary shares

   (866)   (2,938)   (4,656) 

Dividends paid

   (1,415)   (1,395)   (1,410) 

Issuance of long-term debt

   990   812   984 

Repayment of long-term debt

   (1,000)   —     —   

Debt extinguishment costs

   (65)   —     —   

Net (repayments of) proceeds from commercial paper

   (493)   177   61 

Payments of debt issuance costs

   (8)   (5)   (16) 

Other, net

   (2)   —     187 
  

 

 

  

 

 

  

 

 

 

Net cash used in financing activities

   (2,859)   (3,349)   (4,850) 
  

 

 

  

 

 

  

 

 

 

Effect of exchange rate changes on cash

   59   (9)   (48) 
  

 

 

  

 

 

  

 

 

 

Increase (decrease) in cash and cash equivalents and restricted cash

   650   (53)   (102) 

Cash and cash equivalents and restricted cash at beginning of period

   878   931   1,033 
  

 

 

  

 

 

  

 

 

 

Cash and cash equivalents and restricted cash at end of period

  $1,528  $878  $931 
  

 

 

  

 

 

  

 

 

 

Supplemental Cash Flow Information:

    

Interest paid, net of capitalized interest

  $333  $313  $299 
  

 

 

  

 

 

  

 

 

 

Net income taxes paid

  $1,044  $741  $1,417 
  

 

 

  

 

 

  

 

 

 


 Year Ended December 31,
Millions of dollars202220212020
Cash flows from financing activities:
Repurchases of Company ordinary shares$(420)$(463)$(4)
Dividends paid - common stock(3,246)(1,486)(1,405)
Purchase of non-controlling interest— — (30)
Issuance of long-term debt— — 6,378 
Payments of debt issuance costs— (3)(63)
Repayments of long-term debt— (3,925)(2,880)
Debt extinguishment costs— (150)(77)
Issuance of short-term debt— — 521 
Repayments of short-term debt— — (506)
Net (repayments of) proceeds from commercial paper(4)(296)239 
Net collateral received from (paid for) interest rate derivatives238 — (238)
Proceeds from settlement of cash flow hedges— 855346 
Payments for settlement of cash flow hedges— (904)— 
Proceeds from settlement of foreign currency contract— — 887 
Payments for settlement of foreign currency contract— — (882)
Other, net25 (13)(15)
Net cash (used in) provided by financing activities(3,407)(6,385)2,271 
Effect of exchange rate changes on cash(56)(96)108 
Increase (decrease) in cash and cash equivalents and restricted cash679 (288)877 
Cash and cash equivalents and restricted cash at beginning of period1,477 1,765 888 
Cash and cash equivalents and restricted cash at end of period$2,156 $1,477 $1,765 
Supplemental Cash Flow Information:
Interest paid, net of capitalized interest$297 $414 $498 
Net income taxes paid746 310 176 
See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’SHAREHOLDERS’ EQUITY

  

 

Ordinary Shares

  Additional
Paid-in
Capital		  Retained
Earnings		  Accumulated
Other
Comprehensive
Income (Loss)		  Company
Share of
Stockholders’
Equity		  Non-
Controlling
Interests		 

Millions of dollars

 Issued  Treasury      

Balance, December 31, 2014

 $31  $(7,853)  $10,387  $6,775  $(1,026)  $8,314  $30 

Net income (loss)

  —     —     —     4,476   —     4,476   (2) 

Other comprehensive loss

  —     —     —     —     (412)   (412)   —   

Share-based compensation

  —     382   (205)   —     —     177   —   

Dividends ($3.04 per share)

  —     —     —     (1,410)   —     (1,410)   —   

Repurchases of Company ordinary shares

  —     (4,615)   —     —     —     (4,615)   —   

Settlement from partner on exit from partnership

  —     —     20   —     —     20   (4) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance, December 31, 2015

 $31  $(12,086)  $10,202  $9,841  $(1,438)  $6,550  $24 

Net income

  —     —     —     3,836   —     3,836   1 

Other comprehensive loss

  —     —     —     —     (73)   (73)   —   

Share-based compensation

  —     55   (11)   —     —     44   —   

Dividends ($3.33 per share)

  —     —     —     (1,395)   —     (1,395)   —   

Repurchases of Company ordinary shares

  —     (2,914)   —     —     —     (2,914)   —   
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance, December 31, 2016

 $31  $(14,945)  $10,191  $12,282  $(1,511)  $6,048  $25 

Net income (loss)

  —     —     —     4,879   —     4,879   (2) 

Other comprehensive income

  —     —     —     —     226   226   —   

Share-based compensation

  —     41   14   —     —     55   —   

Dividends ($3.55 per share)

  —     —     —     (1,415)   —     (1,415)   —   

Repurchases of Company ordinary shares

  —     (845)   —     —     —     (845)   —   

Purchase of non-controlling interest

  —     —     1   —     —     1   (22) 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance, December 31, 2017

 $31  $(15,749)  $10,206  $15,746  $(1,285)  $8,949  $1 
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 


 
 
Ordinary Shares
Additional
Paid-in
Capital		Retained
Earnings		Accumulated Other Comprehensive LossCompany
Share of
Shareholders’
Equity		Non-
Controlling
Interests
Millions of dollarsIssuedTreasury
Balance, December 31, 2019$19 $(580)$5,954 $4,435 $(1,784)$8,044 $19 
Net income— — — 1,427 — 1,427 — 
Other comprehensive loss— — — — (159)(159)— 
Share-based compensation— 53 25 (10)— 68 — 
Dividends - common stock ($4.20 per share)— — — (1,405)— (1,405)— 
Dividends - redeemable non-controlling interests ($60.00 per share)— — — (7)— (7)— 
Repurchases of Company ordinary shares— (4)— — — (4)— 
Purchase of non-controlling interests— — 7 — — 7 — 
Distribution to non-controlling interests— — — — — — (2)
Balance, December 31, 2020$19 $(531)$5,986 $4,440 $(1,943)$7,971 $17 
Net income— — — 5,617 — 5,617 — 
Other comprehensive income— — — — 140 140 — 
Share-based compensation— 43 58 (1)— 100 — 
Dividends - common stock ($4.44 per share)— — — (1,486)— (1,486)— 
Dividends - redeemable non-controlling interests ($60.00 per share)— — — (7)— (7)— 
Repurchases of Company ordinary shares— (477)— — — (477)— 
Sales of non-controlling interests— — — — — — (3)
Balance, December 31, 2021$19 $(965)$6,044 $8,563 $(1,803)$11,858 $14 
Net income— — — 3,889 — 3,889 — 
Other comprehensive income— — — — 431 431 — 
Share-based compensation— 25 75 (4)— 96 — 
Dividends - common stock ($4.70 per share)— — — (1,542)— (1,542)— 
Special dividends - common stock ($5.20 per share)— — — (1,704)— (1,704)— 
Dividends - redeemable non-controlling interests ($60.00 per share)— — — (7)— (7)— 
Repurchases of Company ordinary shares— (406)— — — (406)— 
Balance, December 31, 2022$19 $(1,346)$6,119 $9,195 $(1,372)$12,615 $14 
See Notes to the Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

     Page 
1. 

Description of Company and Operations

   73 
2. 

Summary of Significant Accounting Policies

   73 
3 

Discontinued Operations and Dispositions

   85 
4. 

Related Party Transactions

   86 
5. 

Accounts Receivable

   86 
6. 

Inventories

   87 
7. 

Property, Plant and Equipment, Goodwill and Intangible Assets

   87 
8. 

Investment in PO Joint Ventures

   89 
9. 

Equity Investments

   90 
10. 

Prepaid Expenses, Other Current Assets and Other Assets

   92 
11. 

Accrued Liabilities

   93 
12. 

Debt

   94 
13. 

Lease Commitments

   99 
14. 

Financial Instruments and Fair Value Measurements

   99 
15. 

Pension and Other Postretirement Benefits

   106 
16. 

Incentive and Share-Based Compensation

   119 
17. 

Income Taxes

   123 
18. 

Commitments and Contingencies

   128 
19. 

Stockholders’ Equity

   130 
20. 

Per Share Data

   134 
21. 

Segment and Related Information

   135 
22. 

Unaudited Quarterly Results

   138 
23. 

Subsequent Events

   139 

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8.
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9.
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10.
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11.
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Company and Operations

LyondellBasell Industries N.V. is a limited liability company (Naamloze Vennootschap) incorporated under Dutch law by deed of incorporation dated October 15, 2009. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell Industries N.V. together with its consolidated subsidiaries (“LyondellBasell N.V.”).

LyondellBasell N.V. is a worldwide manufacturer of chemicals and polymers, a refiner of crude oil, a significant producer of gasoline blending components and a developer and licensor of technologies for the production of polymers.

2. Summary of Significant Accounting Policies

The following significant accounting policies were applied in the preparation of these Consolidated Financial Statements:

Basis of Preparation and Consolidation

The accompanying Consolidated Financial Statements have been prepared from the books and records of LyondellBasell N.V. under accounting principles generally accepted in the U.S.United States (“U.S. GAAP”). Subsidiaries are defined as being those companies over which we, either directly or indirectly, have control through a majority of the voting rights or the right to exercise control or to obtain the majority of the benefits and be exposed to the majority of the risks. Subsidiaries are consolidated from the date on which control is obtained until the date that such control ceases. All intercompany transactions and balances have been eliminated in consolidation.

The Consolidated Financial Statements have been prepared under the historical cost convention, as modified for the accounting of certain financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. Consolidated financial information, including subsidiaries, equity investments, has been prepared using uniform accounting policies for similar transactions and other events in similar circumstances.

Cash and Cash Equivalents

Cash

Our cash equivalents consist of highly liquid debt instruments such as certificates of deposit, commercial paper and money market accounts.accounts with major international banks and financial institutions. Cash equivalents include instruments with maturities of three months or less when acquired. Cash equivalents are stated at cost, which approximates fair value. Cashacquired and cash equivalents exclude restricted cash. Our cash equivalents are placed in certificates of deposit, high-quality commercial paper and money market accounts with major international banks and financial institutions.

Although, we have no current requirements for compensating balances in a specific amount at a specific point in time, we maintain compensating balances at our discretion for some of our banking services and products.

Short-Term Investments

We have

Our investments in marketabledebt securities are classified as available-for-sale and held-to-maturity. These securities are included in Short-term investmentsheld-to-maturity on the Consolidated Balance Sheets.basis of our intent and ability to hold the investments. Investments classified as available-for-sale are carried at estimated fair value with unrealized gains and losses recorded as a component of Accumulatedchanges reflected in other comprehensive income (“AOCI”). income. Credit-related impairment, measured using the expected cash flows and limited to the amount by which the amortized cost basis of a security exceeds its fair value, is recognized through an allowance for expected credit losses, and adjusted subsequently if conditions change, with a corresponding impact in earnings. Where there is an intention or a requirement to sell an impaired available-for-sale debt security, the entire impairment is recognized in earnings with a corresponding adjustment to the amortized cost basis of the security.
Investments classified as held-to-maturity are carried at amortized cost. We periodically review our available-for-sale and held-to-maturity securitiescost less allowance for other-than-temporary declines in fair

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value below the cost basis, and when events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the investment is written down to fair value, establishing a new cost basis.

credit losses recorded through net income.

Trade Receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

We calculate provisionsbusiness and are carried at transaction price net of allowance for doubtful accounts receivable based on our estimates of amounts that we believe are unlikely to be collected. Collectability of receivablescredit losses. Allowance for credit losses is reviewedmeasured using historical loss rates for the respective risk categories and incorporating forward-looking estimates. The corresponding expense for the provision calculated for doubtful accountsloss allowance is adjusted at least quarterly, based on aging of specific accounts and other available information about the associated customers. Provisions for doubtful accounts are includedreflected in Selling, general and administrative expenses.

Loans Receivable

We invest in tri-party repurchase agreements. Under these agreements, we make cash purchases of securities according to a pre-agreed profile from our counterparties. The counterparties have an obligation to repurchase, and we have an obligation to sell, the same or substantially the same securities at a pre-defined date for a price equal to the purchase price plus interest. These securities, which pursuant to our internal policies are held by a third-party custodian and must generally have a minimum collateral value of 102%, secure the counterparty’s obligation to repurchase the securities. Depending upon maturity, these tri-party repurchase agreements are treated as short-term loans receivable and are reflected in Prepaid expenses and other current assets or as long-term loans receivable reflected in Other investments and long-term receivables on our Consolidated Balance Sheets.

Inventories

Cost of our raw materials, work-in-progress and finished goods inventories is determined using the last-in, first-out (“LIFO”) method and is carried at the lower of currentcost or market value or cost.value. Cost of our materials and supplies inventory is determined using the moving average cost method and is carried at the lower of cost and net realizable value.

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Inventory exchange transactions, which involve fungible commodities, are not accounted for as purchases and sales. Any resulting volumetric exchange balances are accounted for as inventory, with cost determined using the LIFO method.

Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Costs may also include borrowing costs incurred on debt during construction orof major projects exceeding one year, costs of major maintenance arising from turnarounds of major units and committed decommissionlegally obligated decommissioning costs. Routine maintenance costs are expensed as incurred. Land is not depreciated.
Depreciation is computed using the straight-line method over the estimated useful asset lives of assets to their residual values.

The assets’ residual values and useful lives of assets are reviewed, and adjusted if appropriate, at the end of each reporting period.

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whenever events or circumstances indicate that a revision is warranted. Land is not depreciated.

We evaluate property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets, which, for us, is generally at the plant group level (or, at times, individual plants in certain circumstances where we have isolated production units with separately identifiable cash flows). WhenIf it is probabledetermined that an asset or asset group’s carrying value exceeded its undiscounted futureestimated pre-tax cash flows will not be sufficient to recover the carrying amount,and estimated fair value, the asset is written down to its estimated fair value.

Upon retirement or sale, we remove the cost of the asset and the related accumulated depreciation from the accounts and reflect any resulting gain or loss in the Consolidated Statements of Income.

Equity Investments

We account for equity method investments (“equity investments”) using the equity method of accounting if we have the ability to exercise significant influence over, but not control of, an investee. Significant influence generally exists if we have an ownership interest representing between 20% and 50% of the voting rights. Under the equity method of accounting, investments are stated initially at cost and are adjusted for subsequent additional investments and our proportionate share of profit or losses and distributions.

We record our share of the profits or losses of the equity method investments, net of income taxes, in the Consolidated Statements of Income. When our share of losses in an equity investment equals or exceeds our interest in the equitycarrying amount of our investment including any other unsecured receivables,advances made by us, we do not recognize further losses, unless we have incurredguaranteed obligations or made payments on behalf ofare otherwise committed to provide further financial support to the equity investment.

investee.

We evaluateassess our equity method investments for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such investments may have experienced an other-than-temporary decline in value. When evidence of loss in value has occurred, management compares the estimated fair value of investment to the carrying value of investment to determine whether an impairment has occurred. If the estimated fair value is less than the carrying value and management considers the decline in value to be other-than temporary, the excess of the carrying value over the estimated fair value is recognized in the Consolidated Financial Statements as an impairment.

Goodwill

We recorded goodwill upon our application of fresh-start accounting on May 1, 2010. Goodwill is not amortized, but is tested annually for impairment. We assess the recoverability of the carrying value of goodwill during the fourth quarter of each year or whenever events or changes in circumstances indicate that the carrying amount of the goodwillinvestment may not be recoverable. If the decline in value is considered to be other-than-temporary, the investment is written down to its estimated fair value.

Investments in PO Joint Ventures and the Louisiana Joint Venture—We share ownership with Covestro PO LLC, a subsidiary of Covestro AG (collectively “Covestro”), in a U.S. propylene oxide (“PO”) manufacturing joint venture (the “U.S. PO Joint Venture”). The U.S. PO Joint Venture owns a PO/styrene monomer (“SM” or “styrene”) and a PO/tertiary butyl alcohol (“TBA”) manufacturing facility. Covestro’s ownership interest in Series A partnership units represents an undivided interest in certain U.S. PO Joint Venture assets with correlative PO capacity reservation that resulted in ownership of annual in-kind cost-based PO production of approximately 680 thousand tons in 2022 and 2021. Our ownership interest in Series A and Series B partnership units conveys us an undivided interest in certain U.S. PO Joint Venture assets with correlative PO and co-product capacity, respectively, resulting in the ownership of annual in-kind cost-based PO and co-product production.
In addition, each partner has a 50% interest in a separate manufacturing joint venture (the “European PO Joint Venture”), which owns a PO/SM plant at Maasvlakte near Rotterdam, The Netherlands. In substance, each partner’s ownership interest represents an undivided interest in all of the European PO Joint Venture assets with correlative capacity reservation resulting in ownership of annual in-kind cost-based PO and SM production.
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We do not share marketing or product sales under the U.S. PO Joint Venture. We operate the U.S. PO Joint Venture’s and the European PO Joint Venture’s (collectively the “PO Joint Ventures”) plants and arrange and coordinate the logistics of product delivery. The partners’ share in the cost of production and logistics is based on their product off-take.
During the fourth quarter of 2020, we executed a joint venture agreement with Sasol Chemicals (USA) LLC (“Sasol”) to form the Louisiana Integrated PolyEthylene JV LLC joint venture (the “Louisiana Joint Venture”). Under this arrangement, we acquired a 50% ownership interest in an ethane cracker, a low-density and linear-low density polyethylene plant, and associated infrastructure. Under the terms of the joint venture agreement, each partner provides pro-rata share of ethane feedstocks and off-takes pro-rata shares of cracker and polyethylene products. We operate the Louisiana Joint Venture assets and market the polyethylene off-take for all partners through our global sales team.
We account for the PO Joint Ventures and the Louisiana Joint Venture using the equity method. We report the cost of our product off-take as Inventory and the equity loss as Cost of sales in our Consolidated Financial Statements. Related production cash flows are reported in the operating cash flow section of the Consolidated Statements of Cash Flows.
Our equity investment in the PO Joint Ventures and the Louisiana Joint Venture represents our share of the manufacturing plants and is decreased by recognition of our share of equity loss, which is equal to the depreciation of the assets of these joint ventures. Other changes in the investment balance are principally due to our additional capital contributions to these joint ventures to fund capital expenditures. Such contributions are reported in the investing cash flow section of the Consolidated Statements of Cash Flows.
Our product off-take of PO and its co-products from the PO Joint Ventures was 2.4 million tons in 2022, 2.6 million tons in 2021 and 2.6 million tons in 2020. Our product off-take of ethylene and polyethylene produced from the Louisiana Joint Venture was 1.0 million tons in 2022 and 1.1 million tons in 2021. The product off-take in 2020 for the period subsequent to the formation of the joint venture was immaterial.
Redeemable Non-controlling Interests
Our redeemable non-controlling interests relate to shares of cumulative perpetual special stock (“redeemable non-controlling interest stock”) issued by our consolidated subsidiary, formerly known as A. Schulman, Inc. (“A. Schulman”). Holders of redeemable non-controlling interest stock are entitled to receive cumulative dividends at the rate of 6% per share on the liquidation preference of $1,000 per share. Redeemable non-controlling interest stock may be redeemed at any time at the discretion of the holders and is reported in the Consolidated Balance Sheets outside of permanent equity.
The redeemable non-controlling interests were recorded at fair value at the date of acquisition and are subsequently carried at the greater of estimated redemption value at the end of each reporting period or the initial amount recorded at the date of acquisition adjusted for subsequent redemptions. Dividends on these shares are deducted from or added to the amount of Income (loss) attributable to the Company shareholders if and when declared by the Company.
Goodwill
Goodwill is tested for impairment annually in the fourth quarter or whenever events or changes in circumstances indicate that the fair value of a reporting unit may not be fully recoverable.

with goodwill is below its carrying amount.

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We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors assessed for each of the reporting units include, but are not limited to, changes in long-term commodity prices, discount rates, competitive environments, planned capacity, cost factors such as raw material prices, and financial performance of the reporting units. If the qualitative assessment indicates that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, a quantitative test is required.

In 2017 If the carrying value of the reporting unit including goodwill exceeds its fair value, an impairment charge equal to the excess would be recognized up to a maximum amount of goodwill allocated to that reporting unit.

For 2022 and 2016,2021, management performed qualitative impairment assessments of our reporting units, which indicated that the fair value of our reporting units was greater than their carrying value. Accordingly,value including goodwill. Based on this assessment, our historical assessment for impairment and forecasted demand for our products, a quantitative goodwill impairment test was not required, and no goodwill impairment was recognized.

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Intangible Assets

Intangible Assets—

Intangible assets consist of customer relationships, trade names and trademarks, know-how, emission allowances, various contracts, in-process research and development costs and software costs. These assets are amortized using the straight-line method over their estimated useful lives or over the term of the related agreement. We evaluate definite-lived intangible assets with the associated long-lived asset group for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

impairment indicators are present.

Research and Development—
Research and development (“R&D”) costs are expensed when incurred. Subsidies for research and developmentR&D are included in Other (expense) income, (expense), net. Depreciation expense related to assets employed in R&D assets is included as a cost of R&D.

Income Taxes

The income tax for the period comprises current and deferred tax. Income tax is recognized in the Consolidated Statements of Income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In these cases, the applicable tax amount is recognized in other comprehensive income or directly in equity, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts usedrecognized for income tax purposes, as well as the net tax effects of net operating loss carryforwards. Valuation allowances are provided against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

We recognize uncertain income tax positions in our financial statements when we believe it is more likely than not, based on the technical merits, that the position or a portion thereof will be sustained upon examination.

For a position that is more likely than not to be sustained, the benefit recognized is measured at the largest cumulative amount that is greater than 50 percent likely of being realized.

Other Provisions

Environmental Remediation Costs—Environmental remediation liabilities include liabilities related to sites we currently own, sites we no longer own, as well as sites where we have operated that belong to other parties. Liabilities for anticipated expenditures related to investigation and remediation of contaminated sites are accrued when it is probable a liability has been incurred and the amount of the liability can be reasonably estimated. Only ongoing operating andcertain post-remediation monitoring costs, the timing of which can be determined with reasonable certainty, are discounted to present value. Future legal costs associated with such matters, which generally are not estimable, are not included in these liabilities.

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Asset Retirement Obligations—At some sites, we are contractuallylegally obligated to decommission our plants upon site exit. Asset retirement obligations are recorded at the fair value using the present value of the estimated costs to retire the asset at the time the obligation is incurred. That cost, which is capitalized as part of the related long-lived asset, is depreciated on a straight-line basis over the remaining useful life of the related asset. Accretion expense in connection with the discounted liability is also recognized over the remaining useful life ofestimated timeline to settle the related asset.obligation. Such depreciation and accretion expenses are included in Cost of sales.

Foreign Currency Translation

and Remeasurement

Functional and Reporting Currency—Items included in the financial information of each of LyondellBasell N.V.’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”) and then translated to the U.S. dollar (“the reporting currency throughcurrency”) as follows:
•Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
•Income and expenses for each income statement are translated at monthly average exchange rates; and
•All resulting exchange differences are recognized as a separate component within Other comprehensive income.

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income (foreign currency translation adjustments).

Transactions and Balances—Foreign currency transactions are translated into therecorded in their respective functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchangeExchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange ratesremeasurement of monetary assets and liabilities denominated in foreign currencies at the balance sheet date are recognized in earnings.
Revenue Recognition
Substantially all our revenues are derived from contracts with customers. We account for contracts when both parties have approved the contract and are committed to perform, the rights of the parties and payment terms have been identified, the contract has commercial substance and collectability is probable.
Revenue is recognized when obligations under the terms of a contract with our customer are satisfied. This generally occurs at the point in time when performance obligations are fulfilled and control transfers to the customer. In most instances, control transfers upon transfer of risk of loss and title to the customer, which usually occurs when we ship products to the customer from our manufacturing facility. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Customer incentives are generally based on volumes purchased and recognized over the period earned. Sales, value-added, and other taxes that we collect concurrent with revenue-producing activities are excluded from the transaction price as they represent amounts collected on behalf of third parties. We apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Shipping and handling costs are treated as a fulfillment cost and not a separate performance obligation.
We have marketing arrangements to off-take and sell the production of some of our joint ventures in return for a percentage of the price realized on the sales to the end customer. In such arrangements, when we obtain control of the product, revenue and cost of sales are presented on a gross basis. Otherwise, we recognize revenue, net of amounts due to the joint venture, which represents commissions earned.
Payments are typically required within a short period following the transfer of control of the product to the customer. We occasionally require customers to prepay purchases to ensure collectability. Such prepayments do not represent financing arrangements, since payment occurs within a short time frame. We apply the practical expedient which permits us to disregard the effects of a significant financing component when, at contract inception, we expect the period between the payment and fulfillment of the performance obligation will be one year or less.
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Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. Our contract liabilities, which are reflected in our Consolidated Financial Statements as Accrued liabilities and Other liabilities, consist primarily of customer payments for products or services received before the transfer of control to the customer occurs.
Share-Based Compensation
We grant restricted stock units (“RSUs”), stock option awards (“Stock options”), performance share units (“PSUs”), and other cash and stock awards to employees as a form of compensation. Our share-based compensation awards are accounted for as equity-classified awards with compensation expense based on the grant date fair value and recognized over the vesting period in the income statement. We use a straight-line vesting method for cliff-vested awards and a graded vesting method for ratable-vested awards. We have elected to recognize forfeitures as they occur for stock-based compensation. When options are exercised and awards are paid out, shares are issued from our treasury shares. The holders of unvested RSUs are entitled to nonforfeitable dividend equivalents settled in the form of cash payments, which are recognized as dividends in Retained earnings. Outstanding PSUs accrue dividend equivalent units, which will be converted to shares upon payment at the end of the performance period and are classified as Accrued liabilities and Other liabilities on the Consolidated Balance Sheets. Dividend equivalents for PSUs are also recorded in Retained earnings. See Notes 15 and 18 to the Consolidated Financial Statements for additional information.
Leases
Leases with a term longer than 12 months are recorded on the balance sheet as a lease asset and lease liability. If at inception of a contract, a lease is identified, we recognize a lease asset and a corresponding lease liability based on the present value of the lease payments over the lease term, discounted using our incremental borrowing rate, unless an implicit rate is readily determinable. Lease payments include fixed and variable lease components derived from usage or market-based indices, such as the consumer price index. Other variable lease payments may fluctuate for a variety of reasons including usage, output, insurance or taxes. These variable amounts are expensed as incurred and not included in the lease assets or lease liabilities. Options to extend or terminate a lease are reflected in the lease payments and lease term when it is reasonably certain that we will exercise those options. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Income. The majority of our leases are operating leases for which we recognize lease expense on a straight-line basis over the lease term. We apply the practical expedient to account for lease and associated non-lease components as a single lease component for all asset classes with the exception of utilities and pipeline assets within major manufacturing equipment. For these assets, non-lease components are separated from lease components and accounted for as normal operating expenses. Leases with an initial term of 12 months or less are recognized in the Consolidated Statements of Income.

In the Consolidated Financial Statements, the results and financial position of all subsidiaries that have a functional currency different from the presentation currency are translated into the reporting currency as follows:

1.Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

2.Income and expenses for each income statement are translated at average exchange rates; and

3.All resulting exchange differences are recognized as a separate component within Other comprehensive income (foreign currency translation).

Revenue Recognition

Substantially all of the Company’s revenue is derived from product sales. Revenues are recognized when sales are realized or realizable, and the earnings process is complete. Revenue from product sales is recognized when the price is fixed or determinable, collectability is reasonably assured, and the customer has an obligation to pay at the time of transfer of title and risk of loss to the customer, which usually occurs at the time of shipment. Revenue is recognized at the time of delivery if we retain the risk of loss during shipment.

Share-Based Compensation

The Company recognizes compensation expense in the financial statements for share-based compensation awards based upon the grant date fair value over the vesting period.

Contingent share awards are recognized ratably over the vesting period as a liability and re-measured, at fair value, at the balance sheet date, see Note 16 to the Consolidated Financial Statements.

Leases

We lease land and other assets for use in our operations. All lease agreements are evaluated and classified as either an operating lease or a capital lease. A lease is classified as a capital lease if any of the following criteria are met: transfer of ownership to the lessee by the end of the lease term; the lease contains a bargain purchase option; the lease term is equal to 75% or greater of the asset’s useful economic life; or the present value of the future minimum lease payments is equal to or greater than 90% of the asset’s fair market value. Capital leases are recorded at the lower of the net present value of the total amount of rent payable under the leasing agreement (excluding finance charges) or fair market value of the leased asset. Capital lease assets are depreciated on a straight-line basis over a period consistent with our normal depreciation policy for tangible fixed assets, but generally not exceeding the lease term. Operating lease expense is recognized ratably over the entire lease term.

Financial Instruments and Hedging Activities

Pursuant to our risk management policies, we selectively enter into derivative transactions to manage market risk volatility associated with changes in commodity pricing, currency exchange rates and interest rates. DerivativesCertain derivatives used for this purpose are generally designated as net investment hedges, cash flow hedges or fair value hedges. Derivative instruments are recorded at fair value on the balance sheet. Gains and losses related to changes in the

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

fair value of derivative instruments not designated as hedges are recorded in earnings. For

Cash flows from derivatives designated as net investment hedges andare reported in our Consolidated Statements of Cash Flows under the same category as the cash flowflows from the hedged items unless the derivative contract contains a significant financing element. Cash flows for derivatives with a significant financing element are classified as Cash flows from financing activities. Cash flows related to economic hedges are classified consistent with the effective portioncash flows of the gains and losses is recorded in Other comprehensive income (loss) and the ineffective portion is recorded in earnings. For derivatives designated as net investment hedges, gains or losses resulting from its settlement are reflected in foreign currency translations adjustments in Other comprehensive income (loss). For derivatives that have been designated as fair value hedges, the gains and losseseconomic hedged items.
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Contents

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net Investment Hedges—We enter into foreign currency contractsderivatives and foreign currency denominated debt to reduce the volatility in stockholders’shareholders’ equity resulting from changes in currency exchange rates of our foreign subsidiaries with respect to the U.S. dollar. Our foreign currency derivatives currently consist of cross-currency basis swap contracts and forward exchange contracts.

For our basis swaps, we

We use the long-haulcritical terms approach through the application of the spot method to assess hedge effectiveness using a regression analysis approach under the hypothetical derivative method. We perform the regression analysis at least on a quarterly basis over an observation period of three years, utilizing data that is relevant to the hedge duration. We use the forward method to measure ineffectiveness.

quarterly. For our forward exchange contracts and our euro denominated notes payable, we use the critical terms match to assess both prospective and retrospective hedge effectiveness by comparing the spot rate change in the hedging instrument and the spot rate change in the designated net investment. We use the forward method to measure ineffectiveness.

Cash flows related to our foreign currency contractsderivatives designated as net investment hedges, gains or losses attributable to changes in spot foreign exchange rates over the designation period are reflected in foreign currency translation adjustments within Other comprehensive income (loss). Recognition in earnings is delayed until the net investment is sold or liquidated. At that time, the amount recognized is reported in Cash flows from investing activitiesthe same line item as the gain or loss on the liquidation of the hedged foreign operations. For our cross-currency swaps, the associated interest receipts and related interest payments are reportedrecorded in Cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows related tointerest expense. For our foreign currency denominated debt designated as net investment hedges are reported in Cash flows from financing activitiesforward contracts, we amortize initial forward point values on a straight-line basis to interest expense over the life of the hedging instrument. We monitor on a quarterly basis for any over-hedged positions requiring re-designation and related interest payments are reported in Cash flows from operating activities inre-designation of the Consolidated Statement of Cash Flows.

hedge to remove such over-hedged condition.

Cash Flow Hedges—We enter into cash flow hedges to manage the variability in cash flows of a future transaction. Our cash flow hedges include cross currency swaps, forward starting interest rate swaps and commodity swaps.

For derivatives designated as cash flow hedges, the gains and losses are recorded in other comprehensive income (loss) and released to earnings in the same line item and in the same period during which the hedged item affects earnings.

We use the critical terms and the quantitative long-haul methods to assess hedge effectiveness and monitor, at least quarterly, any change in effectiveness.
We have cross-currency swap contracts designated as cash flow hedges to reduce our exposure to the foreign currency exchange risk associated with certain intercompany loans. Under the terms of these contracts, we make interest payments in euros and receive interest in U.S. dollars. Upon the maturities of these contracts, we will pay the principal amount of the loans in euros and receive U.S. dollars from our counterparties.

We enter into forward-starting interest rate contracts to mitigate the risk of adverse changes in benchmark interest rates on thefuture anticipated refinancing of our senior notes due 2019.

debt issuances.

We also haveexecute commodity futures, options and swaps to manage the volatility of the commodity price related to anticipated purchases of raw materials.materials and product sales. We enter into over-the-counter commodity swaps and options with one or more counterparties whereby we pay a predetermined fixed price and receive a price based on the average monthly rate of a specified index for the specified nominated volumes.

We use the long-haul method to assess hedge effectiveness of these cash flow hedges using a regression analysis approach under the hypothetical derivative method. We perform the regression analysis at least on a quarterly basis. We use the dollar offset method under the hypothetical derivative method to measure ineffectiveness.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Value Hedges—We use interest rate swaps as part of our current interest rate risk management strategy to achieve a desired proportion of variable versus fixed rate debt. Under these arrangements, we exchange fixed-rate for floating-rate interest payments to effectively convert our fixed-rate debt to floating-rate debt.

These payments are classified For derivatives that have been designated as Other, net, infair value hedges, the Cash flows from operating activities sectiongains and losses of the Consolidated Statements of Cash Flows. derivatives and hedged items are recorded in earnings.

We use the long-haul method to assess hedge effectiveness using a regression analysis approach.approach at least quarterly. We perform the regression analysis over an observation period of three years, utilizing data that is relevant to the hedge duration. We use the dollar offset method to measure ineffectiveness.

We evaluate the effectiveness of the hedging relationship at least on quarterly basis and calculate the changes in the fair value of the derivatives and the underlying hedged items separately.

Fair Value Measurements

We categorize assets and liabilities, measured at fair value, into one of three different levels depending on the observability of the inputs employed in the measurement:

measurement. Level 1—Quoted1 inputs are quoted prices for identical instruments in active markets.

Level 2—Quoted2 inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable.

Level 3—Model-derived3 inputs are model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

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Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

Changes in fair value levelsFair Value Levels—Management reviews the disclosures regarding fair value measurements at least quarterly. If an instrument classified as Level 1 subsequently ceases to be actively traded, it is transferred out of Level 1. In such cases, instruments are reclassified as Level 2, unless the measurement of its fair value requires the use of significant unobservable inputs, in which case it is reclassified as Level 3.

We use the following inputs and valuation techniques to estimate the fair value of our financial instruments disclosed in Note 14:

Basis Swaps—13 to the Consolidated Financial Statements.

Cross-Currency Swaps—The fair value of our basis swap contractscross-currency swaps is calculated using the present value of future cash flows discounted using observable inputs such as known notional value amounts, yield curves, basis curves, as applicable, and spot and forward exchange rates.

Cross-Currency Swaps—The fair value of our cross-currency swaps is calculated using the present value of future cash flows discounted using observable inputs with the foreign currency leg revalued using published spot and futureforward exchange rates on the valuation date.

Forward-Starting and Fixed-for-Floating Interest Rate Swaps—Swaps—The fair value of our forward-starting interest rate swaps is calculated using the present value of future cash flows method and based on observable inputs such as benchmark interest rates.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fixed-for-Floating Interest Rate Swaps—The fair value of our fixed-for-floating interest rate swaps is calculated using the present value of future cash flows using observable inputs such as benchmark interest rates and market yield curves.

Commodity and Embedded Derivatives—The fair values of our commodity derivatives classified as Level 1 and embedded derivatives are measured using closing market prices of public exchanges and from third-party broker quotes and pricing providers.

The fair value of our commodity swaps classified as Level 2 is determined using a combination of observable and unobservable inputs. The observable inputs consist of future market values of various crude and heavy fuel oils, which are readily available through public data sources. The unobservable input, which is the estimated discount or premium used in the market pricing, is calculated using an internally-developed, multi-linear regression model based on the observable prices of the known components and their relationships to historical prices. A significant change in this unobservable input would not have a material impact on the fair value measurement of our Level 2 commodity swaps.

Forward Exchange Contracts—The fair value of our forward exchange contracts is based on forward market rates.

Available-for-Sale

Equity Securities—The fair value of our available-for-saleinvestment in equity securities is calculated using observable market data for similar securities and broker quotes from recognized purveyors of market data orbased on the net asset value for limited partnership investments provided by the fund administrator. Our limited partnership investments include investments in, among other things, equities and equity related securities, debt securities, credit instruments, global interest rate products, currencies, commodities, futures, options, warrants and swaps. These investments, which include both long and short positions, may be redeemed at least monthly with advance notice ranging up to ninety days.

Loans Receivable—

Short-Term Debt—The fair value of our tri-party repurchase agreements are based on discounted cash flows, which consider prevailing market rates for the respective instrument maturity in addition to corroborative support from the minimum underlying collateral requirements.

Short-Term Debt—Fair values of short-term borrowings related to precious metal financing arrangements accounted for as embedded derivatives are determined based on the current marketfuture price of the associated precious metal.

Long-Term Debt—FairThe fair value of our senior and guaranteed notes is calculated using pricing data obtained from well-established and recognized vendors of market data for debt valuations.

Due to the short maturity, the The fair value of all non-derivative financial instruments included in Current assets, Current liabilities, approximates the applicable carrying value. Current assets include Cashour term loan was determined based on a discounted cash flow model using observable inputs such as benchmark interest rates and cash equivalents, Restricted cash, held-to-maturity time deposits and Accounts receivable. Current liabilities include Accounts payable and Short-term debt excluding precious metal financings.

public information regarding our credit risk.

We use the following inputs and valuation techniques to estimate the fair value of our pension assets disclosed in Note 15:

14 to the Consolidated Financial Statements.

Common and preferred stock—Preferred Stock—Valued at the closing price reported on the market on which the individual securities are traded.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fixed income securities—Income Securities—Certain securities that are not traded on an exchange are valued at the closing price reported by pricing services. Other securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commingled funds—Funds—Valued based upon the unit values of such collective trust funds held at year end by the pension plans. Unit values are based on the fair value of the underlying assets of the fund derived from inputs principally from, or corroborated by, observable market data by correlation or other means.

Real estate—Estate—Valued on the basis of a discounted cash flow approach, which includes the future rental receipts, expenses, and residual values as the highest and best use of the real estate from a market participant view as rental property.

Hedge funds—Funds—Valued based upon the unit values of such alternative investments held at year end by the pension plans. Unit values are based on the fair value of the underlying assets of the fund.

Private equity—Equity—Valued based upon the unit values of such alternative investments held at year end by the pension plans. Unit values are based on the fair value of the underlying assets of the fund. Certain securities held in the fund are valued at the closing price reported on thean exchange or other established quotation service for over-the-counter securities. Other assets held in the fund are valued based on the most recent financial statements prepared by the fund manager.

Convertible securities—Securities—Valued at the quoted prices for similar assets or liabilities in active markets.

U.S. government securities—Government Securities—Certain securities are valued at the closing price reported on the active market on which the individual securities are traded. Other securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings.

Cash and cash equivalents—Cash Equivalents—Valued at the quoted prices for similaridentical assets or liabilities in active markets.

Non-U.S. insurance arrangementsInsurance Arrangements—Valued based upon the estimated cash surrender value of the underlying insurance contract, which is derived from an actuarial determination of the discounted benefits cash flows.

Employee Benefits

Pension Plans—We have bothfunded and unfunded defined benefit (funded and unfunded)plans and defined contribution plans. For the defined benefit plans, a projected benefit obligation is calculated annually by independent actuaries using the projected unit credit method. Pension costs primarily represent the increase in the actuarial present value of the obligation for pension benefits based on employee service during the year and the interest on this obligation in respect of employee service in previous years, net of expected return on plan assets.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity and are reflected in Accumulated other comprehensive income in the period in which they arise.

Other Post-Employment Obligations—Certain employees are entitled to postretirementpost-retirement medical benefits upon retirement. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment applying the same accounting methodology used for defined benefit plans.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Termination Benefits—Contractual termination benefits are payable when employment is terminated due to an event specified in the provisions of a social/labor plan or statutory law. A liability is recognized for one-time termination benefits when we are committed to i)(i) make payments and the number of affected employees and the benefits to be received are known to both parties, and ii)(ii) terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal and can reasonably estimate such amount. Benefits falling due more than 12 months after the balance sheet date are discounted to present value.

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Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Recently Adopted Guidance

Intangibles-Goodwill and Other

Government Assistance—In January 2017,November 2021, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standards Update (“ASU”) 2017-04,Intangibles—Goodwill2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. The guidance requires disclosures about assistance received from the government that have been accounted for by analogizing to a grant or contribution accounting model including the nature and other (Topic 350): Simplifying the Test for Goodwill Impairmentto simplifyform of assistance, the accounting policies used to account for goodwill impairment.the assistance and its impact on the entity’s financial statements. This guidance is effective for annual periods beginning after December 15, 2021. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be measured as amount by which a reporting unit’s carrying value exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The early adoption of this amendment in the first quarter of 2017guidance from January 1, 2022 did not have a material impact on our Consolidated Financial Statements.

Inventories

Reference Rate Reform—In July 2015,December 2022, the FASB issued ASU 2015-11,InventoryNo. 2022-06, Reference Rate Reform (Topic 330)848): SimplifyingDeferral of the Sunset Date of Topic 848. Previously, the FASB issued accounting guidance set forth by Topic 848 to provide optional expedients and exceptions in accounting for contract modifications, hedging relationships and other transactions that reference London Inter-Bank Offered Rate (“LIBOR”), or another reference rate, expected to be discontinued as a result of reference rate reform, if certain criteria are met. The new guidance defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024 and is effective immediately upon issuance. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements.
Accounting Guidance Issued But Not Adopted as of December 31, 2022
Fair Value Measurement—In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Inventory. Under this newEquity Securities Subject to Contractual Sale Restrictions. The guidance entitiesclarifies that measure inventory using any method othera contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security because it is a characteristic of the entity holding the equity security rather than last-in, first-out ora characteristic of the retail inventory method will be required to measure inventory at the lower of costsecurity and net realizableis not considered in measuring its fair value. The amendments in this ASU, which should be appliedguidance is effective prospectively were effective for annual andthe year ending December 31, 2024, including the interim periods, beginning after December 15, 2016.with the impact of adoption reflected in earnings. Early adoption is permitted. The adoption of this amendment in the first quarter of 2017 didguidance will not have a material impact on our Consolidated Financial Statements.

Compensation

Supplier Finance Program—In March 2016,September 2022, the FASB issued ASU 2016-09,Compensation—Stock Compensation (Topic 718)2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): ImprovementsDisclosure of Supplier Finance Program Obligations. The guidance requires an entity that uses supplier finance programs in connection with the purchase of goods and services to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions,disclose certain qualitative and quantitative information about its programs including the income tax consequences, classificationkey terms and conditions, activity during the period, and potential magnitude. The guidance is effective retrospectively for the year ending December 31, 2023, including interim periods, with disclosures required for each period for which a balance sheet is presented, except for the disclosure of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU wereroll forward information, which is effective for public entities for annual and interim periodsfiscal years beginning after December 15, 2016. Adoption31, 2023. The adoption of the amendments in this guidance in the first quarter of 2017 didwill not have a material impact on our Consolidated Financial Statements.

Statement of Cash Flows—In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts


3. Revenues
Contract Balances—Contract liabilities were $167 million and Cash Payments. The updated accounting requirement is intended to reduce diversity$169 million at December 31, 2022 and 2021, respectively. Revenue recognized in practiceeach reporting period, included in the classificationcontract liability balance at the beginning of certain transactions in the statementperiod, was immaterial.
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Table of cash flows. Such transactions include, but are not limited to, debt prepayment or debt extinguishment costs, settlement of zero coupon debt instruments, contingent consideration payments made after a business combination and distributions received from equity method of investments. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. Early adoption of the

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

amendments

Disaggregation of Revenues—We participate globally across the petrochemical value chain and are an industry leader in this guidancemany of our product lines. Our chemicals businesses consist primarily of large processing plants that convert large volumes of liquid and gaseous hydrocarbon feedstocks into plastic resins and other chemicals. Our chemical products tend to be basic building blocks for other chemicals and plastics. Our plastic products are used in large volumes as well as smaller specialty applications. Our refining business consists of our Houston refinery, which processes crude oil into refined products such as gasoline and distillates.
Revenues disaggregated by key products are summarized below:
Year Ended December 31,
Millions of dollars202220212020
Sales and other operating revenues:
Olefins & co-products$4,782 $5,008 $2,432 
Polyethylene9,608 10,134 5,842 
Polypropylene6,514 7,994 4,525 
Propylene oxide and derivatives3,097 2,885 1,714 
Oxyfuels and related products5,482 3,587 2,278 
Intermediate chemicals4,012 3,415 2,080 
Compounding and solutions4,197 4,132 3,223 
Advanced polymers1,030 1,001 680 
Refined products10,975 7,178 4,346 
Other754 839 633 
Total$50,451 $46,173 $27,753 
The following table presents our revenues disaggregated by geography, based upon the second quarter of 2017 resulted in a reclassification of cash flows related to debt extinguishment costs incurred in March 2017 of $65 million from operating to financing activity cash flows. Other aspectslocation of the amendment did not have a material impact on our Consolidated Statementscustomer:
Year Ended December 31,
Millions of dollars202220212020
Sales and other operating revenues:
United States$24,789 $22,526 $12,113 
Germany3,555 3,395 2,113 
China2,533 2,322 1,474 
Mexico2,042 1,572 1,197 
Japan1,954 1,417 876 
Italy1,737 1,828 1,175 
France1,366 1,431 875 
Poland1,271 1,169 926 
The Netherlands1,178 1,390 785 
Other10,026 9,123 6,219 
Total$50,451 $46,173 $27,753 
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Table of Cash Flows.

Statement of Cash Flows—In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash. The ASU requires entities to include restricted cash and restricted cash equivalents in their cash and cash-equivalent balances in the statement of cash flows. Early retrospective adoption of this amendment in the second quarter of 2017 did not have a material impact on our Consolidated Statements of Cash Flows.

Compensation—Stock Compensation—In May 2017, the FASB issued ASU 2017-09,Stock Compensation: Scope of Modification Accounting. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting inTopic 718, Compensation–Stock Compensation. Early adoption of this amendment in the third quarter of 2017 did not have a material impact on our Consolidated Financial Statements.

Accounting Guidance Issued But Not Adopted as of December 31, 2017

Revenue Recognition—In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customers (Topic 606), which supersedes the current revenue recognition requirements in Accounting Standard Codification (“ASC”) 606,Revenue Recognition. Under this guidance, entities should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. This ASU also requires enhanced disclosures. In August 2015, the FASB issued ASU 2015-14,Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the original effective date for one year to annual and interim periods beginning after December 15, 2017. We will adopt this standard as of January 1, 2018 following the modified retrospective method.

Amendments to Revenue Recognition—In 2016 the FASB issued several amendments toTopic 606, Revenue from Contracts with Customers.ASU 2016-08,Principal versus Agent Considerations,contains amendments that clarify the implementation guidance on principal versus agent considerations. ASU 2016-10,Identifying Performance Obligations and Licensing clarifies the guidance on identifying performance obligations and accounting for licenses of intellectual property. The FASB also issued ASU 2016-12,Narrow-Scope Improvements and Practical Expedients, which further clarifies accounting for collectability, noncash consideration, presentation of sales tax, and transition. The FASB also issued ASU 2016-20Technical Corrections and Improvements to Topic 606, which provides numerous improvements related to the Topic 606. All amendments are effective with the same date as ASU 2014-09. We have completed any required changes to our systems and processes, including updating our internal controls. We do not expect that adoption of this guidance and amendments to have a material impact on our Consolidated Financial Statements.

Financial Instruments—In January 2016, the FASB issued ASU 2016-01,Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance in this ASU includes a requirement for equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Prospective application of this ASU is required for public entities for annual and interim periods beginning on or after December 15, 2017. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Leases—In February 2016,

Transaction Price Allocated to the FASB issued ASU 2016-02,Leases (Topic 842)Remaining Performance Obligations—We have elected to exclude contracts which supersedeshave an initial term of one year or less from this disclosure. Our contracts with customers are commodity supply arrangements that settle based on market prices at future delivery dates; therefore, transaction prices are entirely variable. Transaction prices are known at the existing guidancetime revenue is recognized since they are generally determined by the commodity price index at a specific date, at month-end or at the month average once products are shipped to our customers. Future estimates of transaction prices for lease accountingdisclosure purposes are substantially constrained as they are highly susceptible to factors outside our influence, including volatility in ASC 840,Leases. Under the new guidance, for leases with a term longer than 12 months a lessee should recognize a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term. Topic 842 retains a classification distinction between finance leasescommodity markets, industry production capacities and operating leases, with the classification affecting the pattern of expense recognition in the income statement. This ASU also requires enhanced disclosures. A modified retrospective transition approach is required for annualrates, planned and interim periods beginning on or after December 15, 2018. Early adoption is permitted. We are currently assessing the impact of this new guidance on our Consolidated Financial Statements via review of existing lease contractsunplanned industry operating interruptions, foreign exchange rates and other purchase obligations that contain embedded lease features, which are generally classified as operating leases under the existing guidance. In 2018, the FASB also issued ASU 2018-01,Land Easement Practical Expedient for Transition to Topic 842. Under this guidance, an optional transition practical expedient is available whereby existing or expired land easements that were not previously accounted for as leases under Topic 840 are not required to be evaluated under Topic 842. We will evaluate the application of this ASU together with the overall assessment of Topic 842.

Financial Instruments—In June 2016, the FASB issued ASU 2016-13,Financial Instruments—Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments. This amendment requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected, resulting in the use of a current expected credit loss (“CECL”) model when measuring an impairment of financial instruments. Credit losses related to available-for-sale securities should be recorded in the consolidated income statement through an allowance for credit losses. Estimated credit losses utilizing the CECL model are based on historical experience, current conditions and forecasts that affect the collectability. This ASU also modifies the impairment model for available-for-sale debt securities by eliminating the concept of “other than temporary” as well as providing a simplified accounting model for purchased financial assets with credit deterioration since their origination. The guidance will be effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact of the amendment on our Consolidated Financial Statements.

Income Taxes—In October 2016, the FASB issued ASU 2016-16,Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. Under current GAAP, the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory, and a reporting entity would recognize tax expense from the sale of assets in the seller’s tax jurisdiction when the transfer occurs, even though the pretax effects of that transaction are eliminated in consolidation. The new guidance will be effective for public entities for annual periods beginning after December 15, 2017. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.

Business Combinations—In January 2017, the FASB issued ASU 2017-01,Clarifying the Definition of a Business. This ASU clarifies the definition of a business in evaluating whether a transaction should be accounted for as an acquisition (or disposal) of an asset or a business. The amendments will be effective for public entities for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets—In February 2017, the FASB issued ASU 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The guidance provides clarification about the termin substance nonfinancial asset, other aspects of the scope of Subtopic 610-20Other Income, and how an entity should account for partial sales of nonfinancial assets once the amendments in Update 2014-09 become effective. The amendments will be effective for annual and interim periods beginning after December 15, 2017. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Compensation—Retirement Benefits—In March 2017, the FASB issued ASU 2017-07,Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The guidance will require changes in presentation of current service cost and other components of net benefit cost. This amendment will be effective for public entities for annual and interim periods beginning after December 15, 2017. We do not expect the adoption of this new guidance to have a material impact on our Consolidated Financial Statements.

Receivables–Nonrefundable Fees and Other Costs—In March 2017, the FASB issued ASU 2017-08,Premium Amortization on Purchased Callable Debt Securities. This guidance requires the premium on callable debt securities to be amortized to the earliest call date. Under current requirements, premiums on callable debt securities are generally amortized over the contractual life of the security. The amendments will be effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

Derivatives and Hedging—In August 2017, the FASB issued ASU 2017-12,Targeted Improvements to Accounting for Hedging Activities. The guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting and amends the presentation and disclosure requirements while changing how companies assess hedge effectiveness. The amendments will be effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted and the Company will adopt the guidance effective January 1, 2018. We do not expect the adoption of this guidance to have a material impact on our Consolidated Financial Statements.

Accumulated Other Comprehensive Income—In February 2018, the FASB issued ASU 2018-02,Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance will permit entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of the Tax Act to retained earnings. The amendment will be effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact of the amendment on our Consolidated Financial Statements.

3. Discontinued Operations and Dispositions

Discontinued Operations—We began reporting the Berre refinery as a discontinued operation in the second quarter of 2012. The impact of this discontinued operation is immaterial to our consolidated results.

Cash outflows for exit and disposal costs were incurred through the end of 2017. Payments to severed employees are expected to be substantially complete by 2019.

In May 2016, we received a notice pertaining to the final closure of our Berre refinery from the Prefect of Bouches du Rhone. This notice outlines the requirements to dismantle the refinery facilities. At this time, the estimated cost and associated cash flows to fulfill these requirements are not deemed to be material.

Dispositions—Upon the sale of our wholly owned subsidiary, Petroken Petroquimica Ensenada S.A. in February 2016, we received net proceeds of $137 million, which is reflected in Cash flows from investing activities in the Consolidated Statement of Cash Flows. In connection with the sale, we recognized a pretax and after-tax gain of $78 million, which is reflected in Other Income, net in the Consolidated Income Statements.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

worldwide geopolitical trends.

4. Related Party Transactions

We have related party transactions with affiliates of one of our major shareholders, Access Industries (“Access”) and with the Company’s joint venture partners (see Notes 8 and 9).

Access—In December 2010, one of our subsidiaries received demand letters from affiliates of Access demanding (i) indemnity for losses, including attorney’s fees and expenses, arising out of a pending lawsuit and (ii) payment of (a) $100 million in management fees under a 2007 management agreement between an Access affiliate and the predecessor of LyondellBasell AF S.C.A. (“LyondellBasell AF”) and (b) other unspecified amounts related to advice purportedly given in connection with financing and other strategic transactions. For additional information related to this matter, see Note 18.

Joint Venture Partners—

We have related party transactions with our joint venture partners, which are classified as equity investees.investees (see Note 8 to the Consolidated Financial Statements). These related party transactions include the sales and purchases of goods in the normal course of business as well as certain financing arrangements. In addition, under contractual arrangements with certain of our equity investees, we receive certain services, utilities and materials at some of our manufacturing sites, and we provide certain services to our equity investees.

These transactions are summarized as follows:

 Year Ended December 31,
Millions of dollars202220212020
The Company billed related parties for:
Sales of products—
Joint venture partners$1,012 $1,038 $758 
Shared service agreements—
Joint venture partners2 13 6 
Related parties billed the Company for:
Sales of products—
Joint venture partners$4,837 $4,348 $2,682 
Shared service agreements—
Joint venture partners94 85 75 
Related Party Notes Receivable—In July 2022, we executed a loan agreement with our joint venture partner to fund CNY300 million (approximately $43 million as of December 31, 2022) principal to our joint venture Bora LyondellBasell Petrochemical Co. Ltd. (“BLYB”). The loan matures six months from issuance and may be extended up to nine times, in six months increments, with consent of the joint venture partners. Interest accrues at the one-year prime rate from People’s Bank of China and is payable quarterly.
Other—We have guaranteed $21$20 million of the indebtedness of onetwo of our joint ventures as of December 31, 2017. In 2015, we received a $19 million payment for a loan made to our joint venture, Al-Waha Petrochemicals Ltd. in 2010.

Related party transactions are summarized as follows:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

The Company billed related parties for:

      

Sales of products—

      

Joint venture partners

  $779   $729   $805 

Shared service agreements—

      

Joint venture partners

   16    18    19 

Related parties billed the Company for:

      

Sales of products—

      

Joint venture partners

   2,759    2,402    2,831 

Shared service agreements—

      

Joint venture partners

   75    71    73 

2022.

5. Accounts Receivable

We sell our products primarily to other industrial concerns in the petrochemicalspetrochemical and refining industries. We perform ongoing credit evaluations of our customers’ financial conditionscondition and, in certain circumstances, require letters of credit or corporate guarantees from them. Our allowance for doubtful accountsAccounts receivable which isare reflected in the Consolidated Balance Sheets as a reductionnet of accounts receivable, was $17allowance for credit losses of $6 million and $16 million atin each of the years ended December 31, 20172022 and 2016, respectively.2021. We recorded provisionsallowance for doubtful accounts receivable,credit losses for receivables, which are reflected in the Consolidated Statements of Income, however, such amounts were immaterial for each of less than $1 million in 2017, 2016the years ended December 31, 2022, 2021 and 2015.

2020.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Inventories

Inventories consisted of the following components at December 31:

Millions of dollars

  2017   2016 

Finished goods

  $2,932   $2,575 

Work-in-process

   142    154 

Raw materials and supplies

   1,143    1,080 
  

 

 

   

 

 

 

Total inventories

  $4,217   $3,809 
  

 

 

   

 

 

 

Millions of dollars20222021
Finished goods$3,027 $3,329 
Work-in-process227 178 
Raw materials and supplies1,550 1,394 
Total inventories$4,804 $4,901 
At December 31, 20172022 and 2016,2021, approximately 86%77% and 85%80%, respectively, of our inventories were valued using the last in, first out (“LIFO”) method and the remaining inventories, consisting primarily of materials and supplies, were valued at the moving average cost method. At December 31, 20172022 and 2016,2021, our LIFO cost exceeded current replacement cost under the first-in first-out method.
The excess of our inventories at estimated net realizable value over LIFO cost after lower of cost or market charges was approximately $1,194$1,586 million and $499$2,503 million at December 31, 20172022 and 2016,2021, respectively.

For information During 2020, we recognized an LCM inventory valuation charge of $16 million primarily related to lower of cost or market (“LCM”) inventory valuation charges recognized during 2016the decline in pricing for our raw material and 2015, see Note 21.

finished goods inventories.

7. Property, Plant and Equipment, Goodwill and Intangible Assets

Property, Plant and Equipment—The components of property, plant and equipment, at cost, and the related accumulated depreciation are as follows at December 31:

Millions of dollars

  Estimated
Useful Lives
(in Years)		   2017  2016 

Land

    $313  $278 

Major manufacturing equipment

   25    10,029   9,061 

Buildings

   30    826   682 

Light equipment and instrumentation

   5-20    2,141   1,932 

Office furniture

   15    16   14 

Major turnarounds

   4-7    1,765   1,528 

Information system equipment

   3-5    59   58 

Construction in progress

     1,421   1,082 
    

 

 

  

 

 

 

Total property, plant and equipment

     16,570   14,635 

Less accumulated depreciation

     (5,573)   (4,498) 
    

 

 

  

 

 

 

Property, plant and equipment, net

    $10,997  $10,137 
    

 

 

  

 

 

 

Millions of dollarsEstimated Useful Life (years)20222021
Land$321 $334 
Major manufacturing equipment2513,257 11,614 
Buildings302,280 1,228 
Light equipment and instrumentation5-203,528 3,347 
Office furniture1522 24 
Major turnarounds4-71,732 1,652 
Information system equipment3-563 63 
Construction in progress2,521 4,120 
Total property, plant and equipment23,724 22,382 
Less accumulated depreciation(8,337)(7,826)
Property, plant and equipment, net$15,387 $14,556 
Capitalized Interest—We capitalize interest costs incurred on funds used to construct property, plant and equipment. In 2017, 20162022, 2021 and 2015,2020, we capitalized interest of $20$114 million, $33$97 million and $11$40 million, respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Intangible Assets—The components of identifiable intangible assets, at cost, and the related accumulated amortization are as follows at December 31:

   2017   2016 

Millions of dollars

  Cost   Accumulated
Amortization		  Net   Cost   Accumulated
Amortization		  Net 

In-process research and development costs

  $117   $(70)  $47   $106   $(54)  $52 

Emission allowances

   786    (468)   318    697    (421)   276 

Various contracts

   552    (356)   196    518    (306)   212 

Software costs

   73    (66)   7    70    (60)   10 
  

 

 

   

 

 

  

 

 

   

 

 

   

 

 

  

 

 

 

Total intangible assets

  $1,528   $(960)  $568   $1,391   $(841)  $550 
  

 

 

   

 

 

  

 

 

   

 

 

   

 

 

  

 

 

 

 20222021
Millions of dollarsCostAccumulated
Amortization		NetCostAccumulated
Amortization		Net
Emission allowances$771 $(513)$258 $740 $(504)$236 
Various contracts436 (364)72 435 (357)78 
Customer relationships297 (88)209 303 (68)235 
Software costs124 (46)78 158 (81)77 
Other283 (238)45 296 (227)69 
Total intangible assets$1,911 $(1,249)$662 $1,932 $(1,237)$695 
Amortization of these identifiable intangible assets for the next five years is expected to be $103$83 million in 2018, $1022023, $75 million in 2019, $862024, $74 million in 2020, $352025, $50 million in 2026 and $34 million in 2027.
Impairments—During the fourth quarter of 2021 and $29during the third quarter of 2020, we identified impairment triggers relating to our Houston refinery’s asset group which resulted in non-cash impairment charges of $624 million and $582 million, respectively.
In September 2021, we announced we were weighing strategic options, including a potential sale, for our Houston refinery. The subsequent evaluation of strategic options during the fourth quarter of 2021 increased the likelihood of the asset’s disposal prior to the end of its expected useful life. As a result of this impairment indicator, we assessed the Houston refinery for impairment in 2022.

the fourth quarter of 2021 and determined that its carrying value exceeded its estimated undiscounted pre-tax cash flows. We estimated the fair values of the Houston refinery’s property, plant and equipment, materials and supplies and intangible assets were all zero as of December 31, 2021. Given this, our Refining segment recognized a $624 million non-cash impairment charge in the fourth quarter of 2021 that includes a $549 million impairment of property, plant and equipment, a $43 million impairment of materials and supplies and a $32 million impairment of intangible assets, which reduced the assets’ carrying values to their fair values. The fair values of the impaired assets were determined using market information provided by unrelated third parties. The fair value measurement for the asset group is classified as Level 3.

During 2020, prior to the Company’s evaluation of strategic options for the Houston refinery, we identified impairment triggers related to our Houston refinery’s asset group as a result of significant negative impacts to the Refining segment’s forecasted cash flows resulting from the COVID-19 pandemic. We assessed the Houston refinery for impairment and determined that the asset group carrying value exceeded its undiscounted estimated pre-tax cash flows. As of September 30, 2020, we estimated the fair value of the Houston refinery’s property, plant and equipment to be $550 million, and fair value of contract intangible assets to be $10 million, which was less than the carrying value. As a result, our Refining segment recognized a non-cash impairment charge in the third quarter of 2020 of $582 million, which included a $570 million impairment of property, plant and equipment and a $12 million impairment of contract intangible assets, which reduced the assets’ carrying values to their fair values. The fair value of the impaired assets was determined using an income approach that was based on significant inputs that were not observable in the market. The fair value measurement for the asset group is classified as Level 3.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Depreciation and Amortization Expense—Depreciation and amortization expense is summarized as follows:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Property, plant and equipment

  $1,023   $920   $875 

Investment in PO joint ventures

   41    40    28 

Emission allowances

   67    62    97 

Various contracts

   27    27    32 

In-process research and development costs

   9    8    8 

Software costs

   7    7    7 
  

 

 

   

 

 

   

 

 

 

Total depreciation and amortization

  $1,174   $1,064   $1,047 
  

 

 

   

 

 

   

 

 

 

 Year Ended December 31,
Millions of dollars202220212020
Property, plant and equipment$1,033 $1,146 $1,143 
PO Joint Ventures and Louisiana Joint Venture155 156 72 
Emission allowances8 12 58 
Various contracts18 20 20 
Customer relationships19 20 20 
Software costs14 12 8 
Other20 27 64 
Total depreciation and amortization$1,267 $1,393 $1,385 
Asset Retirement Obligations—In certain cases, we are contractually obligated to decommission our plants upon site exit. In such cases, we have accrued the net present value of the estimated costs. The majority of our asset retirement obligations are related to facilities in Europe. The changes in our asset retirement obligations are as follows:

   Year Ended December 31, 

Millions of dollars

  2017  2016 

Beginning balance

  $77  $83 

Payments

   (3)   (4) 

Changes in estimates

   (26)   (1) 

Accretion expense

   2   3 

Effects of exchange rate changes

   8   (4) 
  

 

 

  

 

 

 

Ending balance

  $58  $77 
  

 

 

  

 

 

 

 Year Ended December 31,
Millions of dollars20222021
Beginning balance$62 $64 
Liabilities incurred249 — 
Liabilities settled(3)(3)
Changes in estimates3 3 
Accretion expense3 2 
Divestiture(6)— 
Effects of exchange rate changes(3)(4)
Ending balance$305 $62 
In connection with the planned exit from the refinery business, we recorded liabilities for asset retirement obligations of $249 million in 2022. See Note 20 to the Consolidated Financial Statements for additional information regarding the planned exit. The remaining asset retirement obligations are primarily related to facilities in Europe.
Although we may have asset retirement obligations associated with some of our other facilities, the present value of those obligations is not material in the context of an indefinite expected life of the facilities. We continually review the optimal future alternatives for our facilities. Any decision to retire one or more facilities may result in an increase in the present value of such obligations.

Discontinued Operations—We began reporting the Berre refinery as a discontinued operation in the second quarter of 2012. The estimated cost and associated cash flows pertaining to the final closure and dismantlement of our Berre refinery from the Prefect of Bouches du Rhone are not deemed to be material.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill—Goodwill was $570 million at December 31, 2017 and $528 million at December 31, 2016. All movements were due to foreign exchange impacts.

8. Investment in PO Joint Ventures

We, together with Covestro PO LLC, a subsidiary of Covestro AG (collectively “Covestro”), share ownership in a U.S. propylene oxide (“PO”) manufacturing joint venture (the “U.S. PO joint venture”). The U.S. PO joint venture owns a PO/styrene monomer (“SM” or “styrene”) and a PO tertiary butyl alcohol (“TBA”) manufacturing facility. Covestro’s ownership interest represents an undivided interest in certain U.S. PO joint venture assets with correlative PO capacity reservation that resulted in ownership of annual in-kind cost-based PO production of approximately 1.5 billion pounds in 2017 and 2016. We take in kind the remaining cost-based PO and co-product production.

In addition, we and Covestro each have a 50% interest in a separate manufacturing joint venture (the “European PO joint venture”), which owns a PO/SM plant at Maasvlakte near Rotterdam, The Netherlands. In substance, each partner’s ownership interest represents an undivided interest in all of the European PO joint venture assets with correlative capacity reservation that resulted in ownership of annual in-kind cost-based PO and SM production.

We and Covestro do not share marketing or product sales under the U.S. PO joint venture. We operate the U.S. PO joint venture’s and the European PO joint venture’s (collectively the “PO joint ventures”) plants and arrange and coordinate the logistics of product delivery. The partners share in the cost of production and logistics is based on their product offtake.

We account for both the U.S. PO joint venture and the European PO joint venture using the equity method. We report the cost of our product offtake as inventory and equity loss as cost of sales in our Consolidated Financial Statements. Related production cash flows are reported in the operating cash flow section of the Consolidated Statements of Cash Flows.

Our equity investment in the PO joint ventures represents our share of the manufacturing plants and is decreased by recognition of our share of equity loss, which is equal to the depreciation and amortization of the assets of the PO joint ventures. Other changes in the investment balance are principally due to our additional capital contributions to the PO joint ventures to fund capital expenditures. Such contributions are reportedcarrying amount of goodwill in the investing cash flow sectioneach of the Consolidated Statements of Cash Flows.

Our product offtake was 6,189 million, 6,024 million and 6,270 million pounds of PO and its co-productsCompany’s reportable segments for the years ended December 31, 2017, 20162022 and 2015, respectively.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Changes in our investments in the U.S. and European PO joint ventures for 2017 and 2016 are summarized below:

Millions of dollars

  U.S. PO
Joint Venture		  European PO
Joint Venture		  Total PO
Joint Ventures		 

Investments in PO joint ventures—January 1, 2017

  $316  $99  $415 

Cash contributions

   26   6   32 

Depreciation and amortization

   (32)   (9)   (41) 

Effect of exchange rate changes

   —     14   14 
  

 

 

  

 

 

  

 

 

 

Investments in PO joint ventures—December 31, 2017

  $310  $110  $420 
  

 

 

  

 

 

  

 

 

 

Investments in PO joint ventures—January 1, 2016

  $296  $101  $397 

Cash contributions

   52   9   61 

Depreciation and amortization

   (32)   (8)   (40) 

Effect of exchange rate changes

   —     (3)   (3) 
  

 

 

  

 

 

  

 

 

 

Investments in PO joint ventures—December 31, 2016

  $316  $99  $415 
  

 

 

  

 

 

  

 

 

 

9.2021 were as follows:

Millions of dollarsO&P -
Americas		O&P -
EAI		I&DAPSTechnologyTotal
December 31, 2020$162 $142 $259 $1,379 $11 $1,953 
Foreign currency translation adjustments— (33)(34)(8)(3)(78)
December 31, 2021162 109 225 1,371 8 1,875 
Acquisitions— — — 6 — 6 
Foreign currency translation adjustments— (23)(24)(7)— (54)
December 31, 2022$162 $86 $201 $1,370 $8 $1,827 
8. Equity Investments

Our PO joint ventures, which are also accounted for using the equity method of accounting, are discussed in Note 8 to the accompanying Consolidated Financial Statements and are, therefore, not included in the following discussion.

Our remaining principal direct and indirect equity investments are as follows at December 31:

Percent of Ownership

  2017   2016 

Basell Orlen Polyolefins Sp. Z.o.o.

   50.00%    50.00% 

PolyPacific Pty. Ltd.

   50.00%    50.00% 

Saudi Polyolefins Company

   25.00%    25.00% 

Saudi Ethylene & Polyethylene Company Ltd.

   25.00%    25.00% 

Al-Waha Petrochemicals Ltd.

   25.00%    20.95% 

Polymirae Co. Ltd.

   50.00%    50.00% 

HMC Polymers Company Ltd.

   28.56%    28.56% 

Indelpro S.A. de C.V.

   49.00%    49.00% 

Ningbo ZRCC Lyondell Chemical Co. Ltd.

   26.65%    26.65% 

Ningbo ZRCC Lyondell Chemical Marketing Co.

   50.00%    50.00% 

NOC Asia Ltd.

   40.00%    40.00% 

Geosel

   —%    27.00% 

Percent of Ownership20222021
PO Joint Ventures—
European PO Joint Venture50.00 %50.00 %
U.S. PO Joint Venture - Series A23.71 %23.71 %
U.S. PO Joint Venture - Series B100.00 %100.00 %
Louisiana Joint Venture50.00 %50.00 %
Bora LyondellBasell Petrochemical Co. Ltd.50.00 %50.00 %
Basell Orlen Polyolefins Sp. Z.o.o.50.00 %50.00 %
Saudi Polyolefins Company25.00 %25.00 %
Saudi Ethylene & Polyethylene Company Ltd.25.00 %25.00 %
Al-Waha Petrochemicals Ltd.25.00 %25.00 %
Polymirae Co. Ltd.50.00 %50.00 %
HMC Polymers Company Ltd.28.56 %28.56 %
Indelpro S.A. de C.V.49.00 %49.00 %
Ningbo ZRCC Lyondell Chemical Co. Ltd.26.65 %26.65 %
Ningbo ZRCC LyondellBasell New Material Co. Ltd.50.00 %50.00 %
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The changes in our equity investments are as follows:

   Year Ended December 31, 

Millions of dollars

      2017          2016     

Beginning balance

  $1,575  $1,608 

Income from equity investments

   321   367 

Distribution of earnings, net of tax

   (309)   (385) 

Purchase of equity method investment

   —     38 

Sale of equity method investment

   (35)   (58) 

Unrealized gain on available-for-sale securities

   19   —   

Currency exchange effects

   68   8 

Other

   (4)   (3) 
  

 

 

  

 

 

 

Ending balance

  $1,635  $1,575 
  

 

 

  

 

 

 

follows at December 31:

Millions of dollars20222021
Beginning balance$4,786 $4,729 
Capital contributions108 61 
Income from equity investments5 461 
Acquisition of equity investments4 106 
Distribution of earnings, net of tax(349)(315)
Depreciation of PO Joint Ventures and Louisiana Joint Venture(155)(156)
Currency exchange effects(100)(55)
Other(4)(45)
Ending balance$4,295 $4,786 
Capital contributions in 2022 and 2021 include $69 million and $54 million, respectively, related to our PO Joint Ventures.
In September 2017,January 2021, we sold our 27%executed a joint venture agreement with China Petroleum & Chemical Corporation (“Sinopec”) to form the Ningbo ZRCC LyondellBasell New Material Company Limited joint venture. We contributed $104 million for a 50% equity interest in our Geoselthe joint venture. The joint venture constructed a new PO and received proceedsSM unit in Zhenhai Ningbo, China which began production in January 2022. The unit utilizes LyondellBasell’s leading PO/SM technology and has the capacity to produce 275 thousand tons of $155 million. In September 2016, we received proceedsPO and 600 thousand tons of $72 million fromSM per year. Products produced by the sale of our ownership interest in SunAllomer Ltd., our joint venture will be marketed equally by both partners, expanding our respective participation in Japan. Also in September 2016, we purchased a net additional 7.41% interest in Polymirae Co. Ltd., ourthe Chinese market. The joint venture in Korea, for $36 million.

is included within our Intermediates & Derivatives segment.

Summarized balance sheet information of the Company’sour investments accounted for under the equity method (presented at 100%) at December 31 are as follows at December 31:

   Year Ended December 31, 

Millions of dollars

      2017           2016     

Current assets

  $2,844   $2,436 

Noncurrent assets

   4,541    4,687 
  

 

 

   

 

 

 

Total assets

   7,385    7,123 

Current liabilities

   1,607    2,008 

Noncurrent liabilities

   1,418    1,668 
  

 

 

   

 

 

 

Net assets

  $4,360   $3,447 
  

 

 

   

 

 

 

follows:

Millions of dollars20222021
Current assets$4,043 $5,488 
Noncurrent assets11,185 11,521 
Total assets15,228 17,009 
Current liabilities2,995 3,589 
Noncurrent liabilities2,615 2,544 
Net assets$9,618 $10,876 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Summarized income statement information of the Company’sour investments accounted for under the equity method (presented at 100%) at December 31 are set forth below:

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Revenues

  $6,632  $6,608  $8,017 

Cost of sales

   (5,119)   (4,933)   (6,370) 
  

 

 

  

 

 

  

 

 

 

Gross profit

   1,513   1,675   1,647 

Net operating expenses

   (223)   (229)   (196) 
  

 

 

  

 

 

  

 

 

 

Operating income

   1,290   1,446   1,451 

Interest income

   7   8   7 

Interest expense

   (74)   (79)   (66) 

Foreign currency translation

   11   (13)   (29) 

Other income, net

   11   23   44 
  

 

 

  

 

 

  

 

 

 

Income before income taxes

   1,245   1,385   1,407 

Provision for income taxes

   (153)   (303)   (299) 
  

 

 

  

 

 

  

 

 

 

Net income

  $1,092  $1,082  $1,108 
  

 

 

  

 

 

  

 

 

 

as follows:

 Year Ended December 31,
Millions of dollars202220212020
Revenues$15,435 $15,456 $9,172 
Cost of sales(14,900)(13,269)(7,883)
Gross profit535 2,187 1,289 
Net operating expenses(519)(497)(320)
Operating income16 1,690 969 
Interest income7 — 1 
Interest expense(24)(48)(70)
Foreign currency translation(1)(5)5 
Other (expense) income, net(26)(21)2 
(Loss) income before income taxes(28)1,616 907 
Provision for income taxes(1)(337)(183)
Net (loss) income$(29)$1,279 $724 
The difference between our carrying value and the underlying equity in the net assets of our equity investments are assigned to the investment’s assets and liabilities of the investment, based on an analysis of the factors giving rise to the basis difference. The amortization of the basis difference is included in Income from equity investments in the Consolidated Statements of Income.

10.Income for each of the years ended December 31, 2022 and 2021 was $6 million and $5 million for the year ended December 31, 2020.

9. Prepaid Expenses, Other Current Assets and Other Assets

The components of Prepaid expenses and Otherother current assets were as follows at December 31:

Millions of dollars

  2017   2016 

Loans receivable

  $570   $369 

Renewable identification numbers

   117    123 

Advances to suppliers

   35    37 

Income taxes

   29    82 

VAT receivables

   184    95 

Prepaid insurance

   25    28 

Financial derivatives

   66    61 

Other taxes

   14    9 

Other

   107    119 
  

 

 

   

 

 

 

Total prepaid expenses and other current assets

  $1,147   $923 
  

 

 

   

 

 

 

The renewable identification numbers reflected above represent a U.S. government established credit used to show compliance in meeting the Environmental Protection Agency’s Renewable Fuel Standard.

Millions of dollars20222021
Renewable identification numbers$465 $305 
Income tax receivable285 263 
VAT receivables203 141 
Financial derivatives152 125 
Advances to suppliers63 57 
Prepaid insurance30 33 
Other94 98 
Total prepaid expenses and other current assets$1,292 $1,022 
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of Other assets were as follows at December 31:

Millions of dollars

  2017   2016 

Deferred tax assets

  $90   $192 

Debt issuance costs

   15    19 

Company-owned life insurance

   56    55 

Financial derivatives

   26    296 

Pension assets

   33    13 

Other

   41    43 
  

 

 

   

 

 

 

Total other assets

  $261   $618 
  

 

 

   

 

 

 

11.

Millions of dollars20222021
Financial derivatives$158 $282 
Deferred tax assets157 174 
Pension assets62 67 
Company-owned life insurance48 61 
Other199 83 
Total other assets$624 $667 
10. Accrued Liabilities

Accrued liabilities consisted of the following components at December 31:

Millions of dollars

  2017   2016 

Payroll and benefits

  $442   $334 

Renewable identification numbers

   130    136 

Product sales rebates

   166    147 

Taxes other than income taxes

   199    177 

Income taxes

   386    311 

Interest

   151    142 

Share repurchases

   —      21 

Deferred revenues

   61    22 

Restructuring

   14    12 

Other

   263    113 
  

 

 

   

 

 

 

Total accrued liabilities

  $1,812   $1,415 
  

 

 

   

 

 

 

Millions of dollars20222021
Renewable identification numbers$486 $340 
Payroll and benefits424 539 
Operating lease liabilities344 336 
Income taxes242 402 
Taxes other than income taxes208 211 
Interest168 145 
Contract liabilities167 169 
Product sales rebates163 178 
Financial derivatives31 3 
Other163 248 
Total accrued liabilities$2,396 $2,571 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12.

11. Debt

Long-term loans, notes and other long-term debt, net of unamortized discount, and debt issuance cost and cumulative fair value hedging adjustments, consisted of the following asat December 31:
Millions of dollars20222021
Senior Notes due 2024, $1,000 million, 5.75% ($1 million of debt issuance cost)$774 $773 
Senior Notes due 2055, $1,000 million, 4.625% ($15 million of discount; $11 million of debt issuance cost)974 974 
Guaranteed Notes due 2027, $300 million, 8.1%300 300 
Issued by LYB International Finance B.V.:
Guaranteed Notes due 2023, $750 million, 4.0% ($1 million of discount)424 423 
Guaranteed Notes due 2043, $750 million, 5.25% ($19 million of discount; $6 million of debt issuance cost)725 724 
Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $8 million of debt issuance cost)982 981 
Issued by LYB International Finance II B.V.:
Guaranteed Notes due 2026, €500 million, 0.875% ($1 million of discount; $2 million of debt issuance cost)518 562 
Guaranteed Notes due 2027, $1,000 million 3.5% ($2 million of discount; $2 million of debt issuance cost)587 631 
Guaranteed Notes due 2031, €500 million, 1.625% ($4 million of discount; $3 million of debt issuance cost)516 558 
Issued by LYB International Finance III, LLC:
Guaranteed Notes due 2025, $500 million, 1.25% ($1 million of discount; $2 million of debt issuance cost)475 486 
Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of debt issuance cost)120 143 
Guaranteed Notes due 2030, $500 million, 2.25% ($3 million of discount; $4 million of debt issuance cost)469 490 
Guaranteed Notes due 2040, $750 million, 3.375% ($2 million of discount; $7 million of debt issuance cost)741 741 
Guaranteed Notes due 2049, $1,000 million, 4.2% ($14 million of discount; $10 million of debt issuance cost)976 975 
Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost)971 981 
Guaranteed Notes due 2051, $1,000 million, 3.625% ($2 million of discount; $11 million of debt issuance cost)897 986 
Guaranteed Notes due 2060, $500 million, 3.8% ($4 million of discount; $6 million of debt issuance cost)481 490 
Other42 34 
Total10,972 11,252 
Less current maturities(432 )(6 )
Long-term debt$10,540 $11,246 
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Table of December 31:

Millions of dollars

  2017  2016 

Senior Notes due 2019, $2,000 million, 5.0% ($3 million of debt issuance cost)

  $961  $1,906 

Senior Notes due 2021, $1,000 million, 6.0% ($7 million of debt issuance cost)

   981   988 

Senior Notes due 2024, $1,000 million, 5.75% ($8 million of debt issuance cost)

   992   991 

Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost)

   973   972 

Guaranteed Notes due 2044, $1,000 million, 4.875% ($11 million of discount; $10 million of debt issuance cost)

   979   979 

Guaranteed Notes due 2043, $750 million, 5.25% ($21 million of discount; $7 million of debt issuance cost)

   722   721 

Guaranteed Notes due 2023, $750 million, 4.0% ($6 million of discount; $4 million of debt issuance cost)

   740   739 

Guaranteed Notes due 2027, $300 million, 8.1%

   300   300 

Guaranteed Notes due 2022, €750 million, 1.875% ($2 million of discount; $3 million of debt issuance cost)

   894   785 

Guaranteed Notes due 2027, $1,000 million, 3.5% ($9 million of discount; $8 million of debt issuance cost)

   984   —   

Other

   25   6 
  

 

 

  

 

 

 

Total

   8,551   8,387 

Less current maturities

   (2)   (2) 
  

 

 

  

 

 

 

Long-term debt

  $8,549  $8,385 
  

 

 

  

 

 

 

Gains (losses) related to fairContents

LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value hedging adjustments associated with the fair value hedge accounting of our fixed-for-floating interest rate swaps for the applicable periods are as follows:

Millions of dollars

  Inception
Year		   Year Ended
December 31,		   Cumulative
Amount
Since
Inception		 
      
      
    2017  2016   

Senior Notes due 2019, 5.0%

   2014   $(48)  $42   $36 

Senior Notes due 2021, 6.0%

   2016    9   3    12 

Guaranteed Notes due 2027, 3.5%

   2017    (1)   —      (1) 

These fair

Millions of dollarsGains (Losses)Cumulative Fair Value Hedging Adjustments Included in Carrying Amount of Debt
Year Ended December 31,December 31,
2022202120222021
Guaranteed Notes due 2025, 1.25%$12 $2 $14 $2 
Guaranteed Notes due 2026, 0.875%12 3 13 1 
Guaranteed Notes due 2027, 3.5%46 56 — (46)
Guaranteed Notes due 2030, 3.375%23 (2)21 (2)
Guaranteed Notes due 2030, 2.25%22 2 24 2 
Guaranteed Notes due 2031, 1.625%11 — 11 — 
Guaranteed Notes due 2050, 4.2%10 3 13 3 
Guaranteed Notes due 2051, 3.625%90 — 90 — 
Guaranteed Notes due 2060, 3.8%9 — 9 — 
Total$235 $64 $195 $(40)
Fair value adjustments are recognized in Interest expense in the Consolidated Statements of Income.

Short-term loans, notes and other short-term debt consisted of the following as ofat December 31:

Millions of dollars

  2017   2016 

$2,500 million Senior Revolving Credit Facility

  $—     $—   

$900 million U.S. Receivables Securitization Facility

   —      —   

Commercial paper

   —      500 

Precious metal financings

   64    90 

Other

   4    4 
  

 

 

   

 

 

 

Total short-term debt

  $68   $594 
  

 

 

   

 

 

 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Millions of dollars20222021
U.S. Receivables Facility$— $— 
Commercial paper200 204 
Precious metal financings131 155 
Other18 3 
Total Short-term debt$349 $362 
Aggregate maturities of debt during the next five years are $70$782 million in 2018, $1,0052023, which includes $425 million that remains outstanding under our 4.0% guaranteed notes due 2023, $789 million in 2019, $52024, $503 million in 2020, $1,0042025, $536 million in 2021, $9032026, $892 million in 20222027 and $5,801$8,182 million thereafter.

Long-Term Debt

Guaranteed Notes

Senior Revolving Credit Facility—Our $3,250 million senior unsecured revolving credit facility (the “Senior Revolving Credit Facility”), which expires in November 2026, may be used for dollar and euro denominated borrowings. The facility has a $200 million sub-limit for dollar and euro denominated letters of credit, a $1,000 million uncommitted accordion feature, and supports our commercial paper program. Borrowings under the facility bear interest at either a base rate, LIBOR rate or EURIBOR rate, plus an applicable margin. Additional fees are incurred for the average daily unused commitments. At December 31, 2022, we had no borrowings or letters of credit outstanding and $3,050 million of unused availability under this facility.
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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. Additionally, we are required to maintain a maximum leverage ratio (calculated as the ratio of total net funded debt to consolidated earnings before interest, taxes and depreciation and amortization, both as defined in the Amended and Restated Credit Agreement) financial covenant 3.50 to 1.00. In the event an acquisition meeting certain thresholds is consummated we can elect to increase the maximum leverage ratio for each of the first six fiscal quarters ending after such acquisition as indicated in the Amended and Restated Credit Agreement.
Term Loan due 2027—2022—In March 2017, LYB International Finance II2021 we fully repaid the remaining $1,450 million outstanding borrowings under our Term Loan due 2022 which was entered in 2019.
Covenants and Provisions—Our $300 million 8.1% guaranteed notes due 2027, which are guaranteed by LyondellBasell Industries Holdings B.V. (“LYB Finance II”), a direct, 100%wholly owned finance subsidiary of LyondellBasell Industries N.V., as defined in Rule 3-10(b)contain certain restrictions with respect to the level of Regulation S-X, issued $1,000 millionmaximum debt that can be incurred and security that can be granted by certain operating companies that are direct or indirect wholly owned subsidiaries of 3.5% guaranteed notes due 2027 at a discounted price of 98.968%. In March 2017, the net proceeds from these notes, together with available cash, were used to redeem $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019.

These unsecured notes, which are fully and unconditionally guaranteed by LyondellBasell Industries N.V., rank equally in rightHoldings B.V. These notes contain customary provisions for default, including, among others, the non-payment of paymentprincipal and interest, certain failures to allperform or observe obligations under the Agreement on the notes, the occurrence of LYB Finance II’s existing and future unsecuredcertain defaults under other indebtedness, failure to pay certain indebtedness and tothe insolvency or bankruptcy of certain LyondellBasell Industries N.V. subsidiaries.

The indentures governing all of LyondellBasell N.V.’s existing and future unsubordinated indebtedness. There are no significant restrictions that would impede LyondellBasell N.V., as guarantor, from obtaining funds by dividend or loan from its subsidiaries.

The indenture governing theseother notes containscontain limited covenants, including those restricting our ability and the ability of our subsidiaries to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially all of our assets.

The

We may redeem some of our notes may be redeemed before the date that is three monthsin whole or in part, prior to the scheduledtheir respective maturity datedates, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Treasury Yieldtreasury yield or comparable government bond rate plus 20their respective basis points) on the notes to be redeemed. TheSome of our notes may also be redeemed on or after the date that is three months prior to the scheduledtheir respective maturity date of the notesdates, at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest.

Certain notes are also redeemable upon certain tax events.

Additionally, our Senior Notes due 2019, 2021 and 2024—In March 2017, we redeemed $1,000 million aggregate principal amount of the $2,000 million aggregate principal amount outstanding of our 5% senior notes due 2019, and paid $65 million in make-whole premiums. In conjunction with the redemption of these notes, we recognized non-cash charges of $4 million for the write-off of unamortized debt issuance costs and $44 million for the write-off of the cumulative fair value hedge accounting adjustment related to the redeemed notes.

We have outstanding $1,000 million aggregate principal amount of 5.75% senior notes due 2024, and $1,000 million of 6% senior notes due 2021.

The indentures governing the 5%, 5.75% and 6% Senior Notes contain limited covenants, including those restricting our ability and the ability of our subsidiaries to incur indebtedness secured by any property or assets, enter into certain sale and lease-back transactions with respect to any assets or enter into consolidations, mergers or sales of all or substantially all of our assets.

These notes may be redeemed and repaid, in whole or in part, at any time andor in part from time to time prior to the date that is 90 days prior to the scheduled maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus a premium for each note redeemed equal to the greater of 1.00% of the then outstanding principal amount of the note and the excess of: (a) the present value at such redemption date of (i) the principal amount of the note at maturity plus (ii) all required interest payments due on the note through maturity (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate as of

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

such redemption date plus 50 basis points; over (b) the outstanding principal amount of the note. These notes may also be redeemed, in whole or in part, at any time on or after the date which is 90 days prior to the final maturity date of the notes, at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest.

As of December 31, 2022, we are in compliance with our debt covenants.
Guaranteed Notes due 2022—Notes—In March 2016, LYB Finance II issued €750June 2021, we redeemed $325 million of 1.875%the outstanding $750 million 4.0% guaranteed notes due 2022 at a discounted price2023. In conjunction with the partial redemption, we recognized $25 million of 99.607%.

These unsecured notes,debt extinguishment costs which are fullyreflected in Interest expense in the Consolidated Statements of Income. The debt extinguishment costs include $23 million paid for make-whole premiums and unconditionally guaranteed by LyondellBasell Industries N.V., rank equally in rightnon-cash charges of payment to all$2 million for the write-off of LYB Finance II’s existingunamortized debt discount and future unsecured indebtedness and to allissuance costs.

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Table of LyondellBasell N.V.’s existing and future unsubordinated indebtedness. There are no significant restrictions that would impede LyondellBasell N.V., as guarantor, from obtaining funds by dividend or loan from its subsidiaries.

The indenture governing these notes contains limited covenants, including those restricting our ability and the ability of our subsidiaries to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially all of our assets.

The notes may be redeemed before the date that is three months prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Comparable Government Bond Rate plus 35 basis points) on the notes to be redeemed. The notes may also be redeemed on or after the date that is three months prior to the scheduled maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest. The notes are also redeemable upon certain tax events.

Senior Notes due 2055—In March 2015, we issued $1,000 million of 4.625% Notes due 2055 at a discounted price of 98.353%. These unsecured notes rank equally in right of payment to all of LyondellBasell N.V.’s existing and future unsubordinated indebtedness.

The indenture governing these notes contains limited covenants, including those restricting our ability and the ability of our subsidiaries to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially all of our assets.

The notes may be redeemed before the date that is six months prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Treasury Yield plus 35 basis points) on the notes to be redeemed. The notes may also be redeemed on or after the date that is six months prior to the final maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest.

Guaranteed Notes due 2044—In February 2014, LYB International Finance B.V. (“LYB Finance”), a direct, 100% owned finance subsidiary of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X, issued $1,000 million of 4.875% guaranteed notes due 2044 at a discounted price of 98.831%.

These unsecured notes, which are fully and unconditionally guaranteed by LyondellBasell Industries N.V., rank equally in right of payment to all of LYB Finance’s existing and future unsecured indebtedness and to all of

Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

LyondellBasell’s existing and future unsubordinated indebtedness. There are no significant restrictions that would impede

In September 2021, we redeemed the Guarantor from obtaining funds by dividend or loan from its subsidiaries. Subsidiaries are generally prohibited from entering into arrangements that would limit their ability to make dividends to or enter into loans with the Guarantor.

The indenture governing these notes contains limited covenants, including those restricting our ability and the abilityentire $500 million outstanding of our subsidiaries to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially all of our assets.

The notes may be redeemed before the date that is six months prior to the scheduled maturity date at a redemption price equal to the greater of 100% of the principal amount of the notes redeemed and the sum of the present values of the remaining scheduled payments of principal and interest (discounted at the applicable Treasury Yield plus 20 basis points) on the notes to be redeemed. The notes may also be redeemed on or after the date that is six months prior to the final maturity date of the notes at a redemption price equal to 100% of the principal amount of the notes redeemed plus accrued and unpaid interest.

Guaranteed Notes due 2023 and 2043—In July 2013, LYB Finance issued $750 million of 4%2.875% guaranteed notes due 2023 and $7502025. In conjunction with the redemption, we recognized $37 million of 5.25% Notes due 2043 at discounted prices of 98.678% and 97.004%, respectively.

These unsecured notes,debt extinguishment costs which are fullyreflected in Interest expense in the Consolidated Statements of Income. The debt extinguishment costs include $34 million paid for make-whole premiums and unconditionallynon-cash charges of $3 million for the write-off of unamortized debt issuance costs.

In October 2021, we redeemed the entire $650 million outstanding guaranteed by LyondellBasell Industries N.V., rank equally in right of payment to all of LYB Finance’s existing and future unsecured indebtedness and to all of LyondellBasell’s existing and future unsubordinated indebtedness. There are no significant restrictions that would impede the Guarantor from obtaining funds by dividend or loan from its subsidiaries. Subsidiaries are generally prohibited from entering into arrangements that would limit their ability to make dividends to or enter into loansfloating rate notes due 2023. In conjunction with the Guarantor.

redemption, we recognized $3 million of debt extinguishment costs related to the non-cash write-off of unamortized debt issuance costs which are reflected in Interest expense in the Consolidated Statements of Income.

Pursuant to a cash tender offer, in December 2021 we repaid $775 million principal outstanding of our guaranteed notes, comprising $409 million of our $1,000 million 3.5% guaranteed notes due 2027, $358 million of our $500 million 3.375% guaranteed notes due 2030, and $8 million of our $500 million 1.25% guaranteed notes due 2025. In conjunction with the tender offer, we recognized $42 million of debt extinguishment costs which are reflected in Interest expense in the Consolidated Statements of Income. The indenture governing these notes contains limited covenants, including those restrictingdebt extinguishment costs include $71 million paid for make-whole premiums and non-cash charges of $7 million for the write-off of unamortized debt discount and issuance costs, partially offset by $36 million in gains resulting from the write-off of the cumulative fair value hedge accounting adjustments.
In 2020, in conjunction with the repayment of a portion of the indebtedness outstanding under our abilityTerm Loan due 2022 and the abilityredemption of our subsidiaries1.875% guaranteed notes due 2022, we recognized $23 million of debt extinguishment costs which are reflected in Interest expense in the Consolidated Statements of Income. The debt extinguishment costs include $22 million paid for make-whole premiums and non-cash charges of $2 million for the write-off of unamortized debt discount and issuance costs, partially offset by $1 million in gains resulting from the write-off of the cumulative fair value hedge accounting adjustments.
Senior Notes—Pursuant to incur indebtedness secured by significant property or by capital stock of subsidiaries that own significant property, enter into certain sale and lease-back transactions with respect to any significant property or enter into consolidations, mergers or sales of all or substantially alla cash tender offer, in December 2021 we repaid $225 million principal outstanding of our assets.

$1,000 million 5.75% senior notes due 2024. In conjunction with the tender offer, we recognized $23 million of debt extinguishment costs which are reflected in Interest expense in the Consolidated Statements of Income. The debt extinguishment costs include $22 million paid for make-whole premiums and non-cash charges of $1 million for the write-off of unamortized debt issuance costs.

In 2020, in conjunction with the redemption of our 6% senior notes may be redeemeddue 2021, we recognized $46 million of debt extinguishment costs which are reflected in Interest expense in the Consolidated Statements of Income. The debt extinguishment costs include $55 million paid for make-whole premiums and repaid,non-cash charges of $2 million for the write-off of unamortized debt discount and issuance costs, partially offset by $11 million in whole or in part, at any time andgains resulting from time to time prior to maturity at a redemption price equal to the greater of 100%write-off of the principal amount of the notes redeemed, and the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed. Such interest will be discounted to the date of redemption on a semi-annual basis at the applicable Treasury Yield plus 25 basis points in the case of the 4% Notes due 2023 and plus 30 basis points in the case of the 5.25% Notes due 2043.

Guaranteed Notes due 2027—We have outstanding $300 million aggregate principal amount of 8.1% Guaranteed Notes due 2027. These notes, which are guaranteed by LyondellBasell Industries Holdings B.V., a subsidiary of LyondellBasell N.V., contain certain restrictions with respect to the level of maximum debt that can be incurred and security that can be granted by certain operating companies that are direct or indirect wholly owned subsidiaries of LyondellBasell Industries Holdings B.V.

The 2027 Notes contain customary provisions for default, including, among others, the non-payment of principal and interest, certain failures to perform or observe obligations under the Agreement on the notes, the occurrence of certain defaults under other indebtedness, failure to pay certain indebtedness and the insolvency or bankruptcy of certain LyondellBasell N.V. subsidiaries.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

cumulative fair value hedge accounting adjustments.

Short-Term Debt

Senior Revolving Credit Facility—In June 2017, the term of our $2,500 million revolving credit facility was extended for one year to June 2022 pursuant to a consent agreement. All other material terms of the revolving credit facility remained unchanged.

The revolving credit facility may be used for dollar and euro denominated borrowings, has a $500 million sublimit for dollar and euro denominated letters of credit, a $1,000 million uncommitted accordion feature, and supports our commercial paper program. The aggregate balance of outstanding borrowings and letters of credit under the facility may not exceed $2,500 million at any given time. Borrowings under the facility bear interest at a Base Rate or LIBOR, plus an applicable margin. Additional fees are incurred for the average daily unused commitments.

The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens. In addition, we are required to maintain a leverage ratio at the end of every quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. We are in compliance with these covenants as of December 31, 2017.

At December 31, 2017, we had no outstanding commercial paper, no outstanding letters of credit and no outstanding borrowings under the facility.

Commercial Paper Program— We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). The program is backed by our $2,500 million Senior Revolving Credit Facility. Proceeds from the issuance of commercial paper may be used for general corporate purposes, including dividends and share repurchases.

U.S. Receivables Securitization Facility—Our $900 million U.S. accounts receivable securitization facility,Receivables Facility, which expires in August 2018,June 2024, has a purchase limit of $900 million in addition to a $300 million uncommitted accordion feature. This facility provides liquidity through the sale or contribution of trade receivables by certain of our U.S. subsidiaries to a wholly owned, bankruptcy-remote subsidiary on an ongoing basis and without recourse. The bankruptcy-remote subsidiary may then, at its option and subject to a borrowing base of eligible receivables, sell undivided interests in the pool of trade receivables to financial institutions participating in the facility.facility (“Purchasers”). The sale of the undivided interest in the pool of trade receivables is accounted for as a secured borrowing in the Consolidated Balance Sheets. We are responsible for servicing the receivables. We pay variable interest rates on our secured borrowings. Additional fees are incurred for the average daily unused commitments. In the event of liquidation, the bankruptcy-remote subsidiary’s assets will be used to satisfy the claims of its creditorsthe Purchasers prior to any assets or value in the bankruptcy-remote subsidiary becoming available to us. We are responsible for servicing the receivables. This facility also provides for the issuance of letters of credit up to $200 million. Performance obligations under the facility are guaranteed by LyondellBasell Industries N.V. The term of the securitization facility may be extended in accordance with the provisionsterms of the agreement. The facility is also subject to customary warranties and covenants, including limits and reserves and the maintenance of specified financial ratios. We
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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Under the terms of the U.S. Receivable Facility we are required to maintain a maximum leverage ratio atconsistent with the endterms of every fiscal quarter of 3.50 to 1.00 or less for the period covering the most recent four quarters. Performance obligations under the facility are guaranteed by our parent company. Additional fees are incurred for the average daily unused commitments.

Senior Revolving Credit Facility as discussed above. At December 31, 2017,2022, there were no borrowings or letters of credit outstanding and $794 million unused availability under the facility.

Commercial Paper Program—We have a commercial paper program under which we may issue up to $2,500 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). This program is backed by our $3,250 million Senior Revolving Credit Facility. Proceeds from the issuance of commercial paper may be used for general corporate purposes, including dividends and share repurchases. Interest rates on the commercial paper outstanding at December 31, 2022 are based on the terms of the notes and range from 4.3% to 5.0%. At December 31, 2022, we had $200 million of outstanding commercial paper.
Precious Metal Financings—We enter into lease agreements for precious metals which are used in our production processes. All preciousPrecious metal borrowings are classified as Short-term debt.

debt or Long-term debt, other, based on the maturities of the lease agreements.

Weighted Average Interest Rate—At December 31, 20172022 and 2016,2021, our weighted average interest ratesrate on outstanding short-termShort-term debt were 1.8%was 3.7% and 0.9%, respectively.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Additional Information
Debt Discount and Issuance Costs—Amortization of debt discount and debt issuance costs resulted in amortization expense of $15$14 million, $35 million and $21 million for the yearyears ended December 31, 2017,2022, 2021 and $16 million for each year ended December 31, 2016 and 2015,2020, respectively, which is included in Interest expense in the Consolidated Statements of Income.

13. Lease Commitments

Other Information—LYB International Finance B.V., LYB International Finance II B.V., LYB International Finance III, LLC and LYB Americas Finance Company LLC (“LYB Finance subsidiaries”) are wholly owned finance subsidiaries of LyondellBasell Industries N.V., as defined in Rule 3-10(b) of Regulation S-X. Any debt securities issued by LYB Finance subsidiaries will be fully and unconditionally guaranteed by LyondellBasell Industries N.V., and no other subsidiaries of LyondellBasell Industries N.V. guarantees these securities. Our unsecured notes rank equally in right of payment to each respective finance subsidiary’s existing and future unsecured indebtedness and to all of LyondellBasell Industries N.V.’s existing and future unsubordinated indebtedness. There are no significant restrictions that would impede LyondellBasell Industries N.V., as guarantor, from obtaining funds by dividend or loan from its subsidiaries.
12. Leases
Operating Leases—The majority of our leases are operating leases. We lease storage tanks, terminal facilities, land, office facilities, railcars, vehicles,pipelines, barges, plant equipment and other equipment underequipment. As of December 31, 2022 and 2021, our Operating lease assets were $1,725 million and $1,946 million, respectively. As of December 31, 2022 and 2021, Operating lease liabilities totaled $1,854 million and $1,985 million of which $344 million and $336 million, respectively, are current and recorded in Accrued liabilities. These values were derived using a weighted average discount rate of 3.4% and 3.3% as of December 31, 2022 and 2021, respectively.
Substantially all of our operating leases. Some leases contain renewal provisions, purchasehave remaining lease terms of 21 years or less and have a weighted-average remaining lease term of 9 years. Certain lease agreements include options to renew the lease, at our discretion, for approximately 1 year to 20 years and escalation clauses.

The aggregate future estimated payments under these commitments are:

Millions of dollars

 

2018

  $311 

2019

   232 

2020

   194 

2021

   165 

2022

   26 

Thereafter

   517 
  

 

 

 

Total minimum lease payments

  $1,445 
  

 

 

 

Rental expensedo not materially impact our operating lease assets or operating lease liabilities.

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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Maturities of operating lease liabilities as of December 31, 2022, are as follows:
Millions of dollars
2023$396 
2024330 
2025272 
2026229 
2027192 
Thereafter753 
Total lease payments2,172 
Less: Imputed interest(318)
Present value of lease liabilities$1,854 

Operating lease costs were $536 million, $418 million and $393 million for the years ended December 31, 2017, 20162022, 2021 and 2015 was $4402020, respectively, which are reflected in the Consolidated Statements of Income.
In connection with the planned exit from the refinery business, announced in April 2022, we recognized accelerated lease amortization costs of $91 million $426 during 2022 which is included in Operating lease cost. See Note 20 to the Consolidated Financial Statements for additional information.
Cash paid for amounts included in the measurement of operating lease liabilities totaled $423 million, $406 million and $422$383 million for the years ended December 31, 2022, 2021 and 2020, respectively.

14. Leased assets obtained in exchange for new operating lease liabilities totaled $248 million, $822 million and $351 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, we have entered into additional operating leases, with an undiscounted value of $78 million, primarily for railcars. These leases, which will commence in 2023 and 2024, have lease terms ranging from 3 to 10 years.
13. Financial Instruments and Fair Value Measurements

Market Risks—

We are exposed to market risks, such as changes in commodity pricing, currency exchangeinterest rates and interestcurrency exchange rates. To manage the volatility related to these exposures, we selectively enter into derivative transactionscontracts pursuant to our risk management policies.

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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding for the periods presented that are measured at fair value on a recurring basis:
December 31, 2022December 31, 2021
Notional
Amount		Fair
Value		Notional
Amount		Fair
Value		Balance Sheet
Classification
Millions of dollars
Assets—
Derivatives designated as hedges:
Commodities$— $— $41 $24 Prepaid expenses and other current assets
Foreign currency903 109 614 63 Prepaid expenses and other current assets
Foreign currency2,725 133 1,785 43 Other assets
Interest rates— 16 — 7 Prepaid expenses and other current assets
Interest rates400 25 300 1 Other assets
Derivatives not designated as hedges:
Commodities192 27 221 30 Prepaid expenses and other current assets
Foreign currency160 — 34 1 Prepaid expenses and other current assets
Non-derivatives:
Equity securities— — 9 8 Short-term investments
Total$4,380 $310 $3,004 $177 
Liabilities—
Derivatives designated as hedges:
Commodities$35 $14 $— $— Accrued liabilities
Foreign currency— 15 — 14 Accrued liabilities
Foreign currency650 8 1,800 99 Other liabilities
Interest rates— 23 — 3 Accrued liabilities
Interest rates2,164 229 1,863 280 Other liabilities
Derivatives not designated as hedges:
Commodities50 11 24 1 Accrued liabilities
Commodities7 3 — — Other liabilities
Foreign currency236 6 188 2 Accrued liabilities
Total$3,142 $309 $3,875 $399 
The financial instruments in the table above are classified as Level 2. We present the gross assets and liabilities of our derivative instruments on the Consolidated Balance Sheets.
Financial Instruments Not Measured at Fair Value on a Recurring Basis—The following table presents the carrying value and estimated fair value of our Short-term precious metal financings and Long-term debt:
 December 31, 2022December 31, 2021
 Carrying
Value		Fair
Value		Carrying
Value		Fair
Value
Millions of dollars
Precious metal financings$131 $113 $155 $130 
Long-term debt10,517 8,882 11,218 12,756 
Total$10,648 $8,995 $11,373 $12,886 
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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The financial instruments in the table above are classified as Level 2. Our other financial instruments classified within Current assets and Current liabilities have a short maturity and their carrying value generally approximates fair value.
Derivative Instruments:
Commodity Prices—We are exposed to commodity price volatility related to purchases of natural gas liquids, crude oil and other raw materialsvarious feedstocks and sales of our products. We selectively use over-the-counter commodity swaps, options and exchange traded futures contracts with various terms to manage these risks, including through cash flow hedging relationships.
The following table presents the volatilitynotional amounts of our outstanding commodity derivative instruments:
December 31, 2022December 31, 2021
Millions of dollarsNotional AmountNotional AmountMaturity Date
Derivatives designated as hedges:
Cash flow hedges$35 $41 2023
Derivatives not designated as hedges:
Commodity contracts249 245 2023to2024
Interest Rates—We are exposed to interest rate risk with respect to our fixed-rate and variable-rate debt. Fluctuations in interest rates impact the fair value of fixed-rate debt and expose us to the risk that we may need to refinance debt at higher rates. Fluctuations in interest rates also impact interest expense from our variable-rate debt. We use forward-starting interest rate swaps that are designated as cash flow hedges to mitigate the risk that benchmark rates will increase in connection with future financing activities. As of December 31, 2021, Other assets included $238 million of collateral related to these risks. In addition, weforward-starting interest swaps. As of December 31, 2022, there was no collateral remaining as it had been returned. We also use interest rate swaps that are exposeddesignated as fair value hedges to volatility onmitigate the priceschanges in the fair value of precious metalsour fixed-rate debt by effectively converting it to variable-rate debt. See Note 11 to the extent that we have obligations, classified as embedded derivatives, tied toConsolidated Financial Statements for additional information.
The following table presents the pricenotional amounts of precious metals associated with secured borrowings.

our outstanding interest rate derivative instruments:

December 31, 2022December 31, 2021
Millions of dollarsNotional AmountNotional AmountMaturity Date
Cash flow hedges$400 $1,000 2024
Fair value hedges2,164 1,163 2025to2031
Foreign Currency Rates—We have significant worldwide operations. The functional currencies of our consolidatedoperating subsidiaries through which we operate are primarily the U.S. dollar and the euro. We enter into transactions denominated in currencies other than our designated functional currencies. As a result, we are exposedcurrencies that create foreign currency exposure. We enter foreign currency contracts to economically hedge foreign currency risk on receivables and payables. We maintain risk management control policies intendedrelated to monitorrecognized foreign currency risk attributable to our outstanding foreign currency balances. These control policies involve the centralization of foreign currency exposure management, the offsetting of exposures and the estimating of expected impacts of changes in foreign currency rates on our earnings. We enter into foreign currency forward contracts to reduce the effects of our net currency exchange exposures.

For forward contracts that economically hedge recognized monetary assets and liabilities in foreign currencies and that are not designated as net investment hedges, hedge accounting is not applied.liabilities. Changes in the fair value

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

of foreign currencysuch forward and swap contracts which are reported in the Consolidated Statements of Income areand offset, in part, bycurrency remeasurement results. In the currency translation results recognized on the assets and liabilities.

Foreign Currency Gain (Loss)—past, we have entered euro-denominated debt that was designated as a net investment hedge. Other (expense) income, net, in the Consolidated Statements of Income reflected foreign currency losses of $1$14 million, in 2017, $4$2 million in 2016, and $7 million in 2015.

Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding as of December 31, 20172022, 2021 and 20162020, respectively.

We enter foreign currency contracts that are measured at fair value on a recurring basis:

   December 31, 2017   December 31, 2016    
   Notional
Amount		   Fair
Value		   Notional
Amount		   Fair
Value		   

Balance Sheet

Classification

Millions of dollars

          

Assets—

          

Derivatives designated as hedges:

          

Commodities

  $—     $—     $4   $—     Prepaid expenses and other current assets

Commodities

   —      —      54    3   Other assets

Foreign currency

   —      26    604    49   Prepaid expenses and other current assets

Foreign currency

   2,000    25    2,439    282   Other assets

Interest rates

   —      20    —      6   Prepaid expenses and other current assets

Interest rates

   650    1    2,200    11   Other assets

Derivatives not designated as hedges:

          

Commodities

   77    20    85    3   Prepaid expenses and other current assets

Foreign currency

   19    —      11    —     Prepaid expenses and other current assets

Non-derivatives:

          

Available-for-sale securities

   1,310    1,307    1,069    1,073   Short-term investments
  

 

 

   

 

 

   

 

 

   

 

 

   

Total

  $4,056   $1,399   $6,466   $1,427   
  

 

 

   

 

 

   

 

 

   

 

 

   

Liabilities—

          

Derivatives designated as hedges:

          

Commodities

  $97   $8   $—     $—     Accrued liabilities

Commodities

   5    —      —      —     Other liabilities

Foreign currency

   139    29    —      15   Accrued liabilities

Foreign currency

   950    140    —      —     Other liabilities

Interest rates

   —      5    —      1   Accrued liabilities

Interest rates

   3,350    58    1,400    20   Other liabilities

Derivatives not designated as hedges:

          

Commodities

   108    29    103    11   Accrued liabilities

Foreign currency

   995    11    28    1   Accrued liabilities

Non-derivatives:

          

Performance share awards

   23    23    19    19   Accrued liabilities

Performance share awards

   27    27    22    22   Other liabilities
  

 

 

   

 

 

   

 

 

   

 

 

   

Total

  $5,694   $330   $1,572   $89   
  

 

 

   

 

 

   

 

 

   

 

 

   

designated as net investment hedges to manage the impacts of foreign currency translation of our net investments in foreign operations. We also enter foreign currency contracts that are designated as cash flow hedges to manage the variability in cash flows associated with intercompany debt balances.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

All derivatives and available-for-sale securities in the tables above are classified as Level 2, except our limited partnership investments included in our available-for-sale securities discussed below, that are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been classified in the fair value hierarchy.

At December 31, 2017, our outstanding foreign currency and commodity contracts not designated as hedges mature in January 2018 and from January 2018 to June 2018, respectively.

Financial Instruments Not Measured at Fair Value on a Recurring Basis—

The following table presents the carrying value and estimated fair valuenotional amounts of our financial instruments that are not measured at fair value on a recurring basis as of December 31, 2017 and 2016. Short-term and long-term loans receivable, which represent our repurchase agreements, and short-term and long-term debt are recorded at amortized cost in the Consolidated Balance Sheets. The carrying and fair values of short-term and long-term debt exclude capital leases and commercial paper.

   December 31, 2017   December 31, 2016 
   Carrying
Value		   Fair
Value		   Carrying
Value		   Fair
Value		 

Millions of dollars

        

Non-derivatives:

        

Assets:

        

Short-term loans receivable

  $570   $570   $369   $369 
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

        

Short-term debt

  $64   $75   $90   $98 

Long-term debt

   8,526    9,442    8,382    9,147 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $8,590   $9,517   $8,472   $9,245 
  

 

 

   

 

 

   

 

 

   

 

 

 

All financial instruments in the table above are classified as Level 2. There were no transfers between Level 1 and Level 2 for any of our financial instruments during the years ended December 31, 2017 and 2016.

Net Investment Hedges—In 2017 and 2016, we entered into €617 million and €275 million, respectively, of foreign currency contracts that were designated as net investment hedges. In 2017 and 2016, foreign currency contracts with an aggregate notional value of €550 million and €1,200 million, respectively, expired. Upon settlement of these foreign currency contracts in 2017, we paid €550 million ($658 million at the expiry spot rate) to our counterparties and received $609 million from our counterparties. In 2016, we paid €1,200 million ($1,356 million at the expiry spot rate) to our counterparties and received $1,295 million from our counterparties.

In 2016, we also issued euro denominated notes payable due 2022 with notional amounts totaling €750 million that were designated as a net investment hedge.

At December 31, 2017 and December 31, 2016, we had outstanding foreign currency contracts with an aggregate notional value of €742 million ($789 million) and €675 million ($743 million), respectively, designated as net investment hedges. In addition, at December 31, 2017 and December 31, 2016, we had outstanding foreign-currency denominated debt, with notional amounts totaling €750 million ($899 million) and €750 million ($791 million), respectively, designated as a net investment hedge.

There was no ineffectiveness recorded for any of these net investment hedging relationships during the years ended December 31, 2017, 2016 and 2015.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding at December 31, 2017 and December 31, 2016:

   December 31,
2017		   December 31,
2016		     

Millions of dollars

  Notional
Value		   Notional
Value		   Expiration
Date		 

Foreign currency

  $2,300   $2,300    2021 to 2027 

Interest rates

   1,000    1,000    2019 

Commodities

   102    58    2018 to 2019 

In 2015 we recognized a gain of $15 million in Accumulated other comprehensive loss related to the settlement of our forward-starting interest rate swap agreements. In 2017 and 2016, there was no settlement of our forward-starting swap agreements.

The ineffectiveness recorded for these hedging relationships were less than $1 million during each of the years ended December 31, 2017, 2016 and 2015.

As of December 31, 2017, less than $1 million (on a pretax basis) and $8 million (on a pretax basis) is scheduled to be reclassified as a decrease to interest expense and cost of sales respectively over the next twelve months.

Fair Value Hedges—In February 2017, we entered into U.S. dollar fixed-for-floating interest rate swaps to mitigate changes in fair value of our $1,000 million 3.5% guaranteed notes due 2027 associated with the risk of variability in the 3 Month USD LIBOR rate. The fixed-rate and variable-rate are settled semi-annually and quarterly, respectively.

In the third quarter of 2014, we entered into U.S. dollar fixed-for-floating interest rate swaps to mitigate changes in the fair value of our $2,000 million 5% senior notes due 2019. In March 2017, concurrent with the redemption of $1,000 million of our outstanding 5% senior notes due 2019, we dedesignated the related $2,000 million fair value hedge and terminated swaps in the notional amount of $1,000 million. At the same time, we redesignated the remaining $1,000 million notional amount of swaps as a fair value hedge of the remaining $1,000 million of 5% senior notes outstanding.

In 2016 and 2017, we entered into U.S. dollar fixed-for-floating interest rate swaps with aggregate notional value of $600 million and $400 million, respectively, to mitigate changes in the fair value of our $1,000 million 6% senior notes due 2021 associated with the risk of variability in the 1 Month USD LIBOR rate. The fixed and variable payments for the interest rate swaps related to our 6% senior notes due 2021 are settled semi-annually and monthly, respectively.

At December 31, 2017 and December 31, 2016, we had outstanding interest rate contracts with aggregate notional amounts of $3,000 million and $2,600 million, respectively, designated as fair value hedges. Our interest rate contracts outstanding at December 31, 2017 mature from 2019 to 2027.

We recognized a net loss of $16 million during the year ended December 31, 2017 and net gains of $32 million and $44 million during the years ended December 31, 2016 and 2015, respectively, related to the ineffectiveness of our hedging relationships.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

derivative instruments:

December 31, 2022December 31, 2021
Millions of dollarsNotional AmountNotional AmountMaturity Date
Net investment hedges$3,128 $3,048 2023to2030
Cash flow hedges1,150 1,150 2024to2027
Not designated396 222 2023
Impact on Earnings and Other Comprehensive Income—The following tables summarize the pretaxpre-tax effect of derivative instruments and non-derivative instruments onrecorded in Accumulated other comprehensive loss (“AOCI”), the gains (losses) reclassified from AOCI to earnings and additional gains (losses) recognized directly in earnings:
 Effect of Derivative Instruments
 Year Ended December 31, 2022
Balance SheetIncome Statement
Millions of dollarsGain (Loss)
Recognized
in AOCI		Gain (Loss)
Reclassified from AOCI to Income		Additional
Gain (Loss)
Recognized
in Income		Income Statement
Classification
Derivatives designated as hedges:
Commodities$21 $(59)$— Cost of sales
Foreign currency308 (75)69 Interest expense
Interest rates296 6 (227)Interest expense
Derivatives not designated as hedges:
Commodities— — 72 Sales and other operating revenues
Commodities— — (22)Cost of sales
Foreign currency— — (60)Other (expense) income, net
Total$625 $(128)$(168)
 Year Ended December 31, 2021
Balance SheetIncome Statement
Millions of dollarsGain (Loss)
Recognized
in AOCI		Gain (Loss)
Reclassified from AOCI to Income		Additional
Gain (Loss)
Recognized
in Income		Income Statement
Classification
Derivatives designated as hedges:
Commodities$54 $(34)$— Cost of sales
Foreign currency406 (216)37 Interest expense
Interest rates75 6 (7)Interest expense
Derivatives not designated as hedges:
Commodities— — 20 Sales and other operating revenues
Commodities— — 69 Cost of sales
Foreign currency— — (35)Other (expense) income, net
Total$535 $(244)$84 
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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
 Year Ended December 31, 2020
Balance SheetIncome Statement
Millions of dollarsGain (Loss)
Recognized
in AOCI		Gain (Loss)
Reclassified from AOCI to Income		Additional
Gain (Loss)
Recognized
in Income		Income Statement
Classification
Derivatives designated as hedges:
Commodities$5 $— $— Cost of sales
Foreign currency(253)170 46 Interest expense
Interest rates(347)5 95 Interest expense
Derivatives not designated as hedges:
Commodities— — 4 Sales and other operating revenues
Commodities— — 115 Cost of sales
Foreign currency— — (14)Other (expense) income, net
Non-derivatives designated as hedges:
Long-term debt(42)— — Other (expense) income, net
Total$(637)$175 $246 
Amounts excluded from the assessment of effectiveness for foreign currency contracts designated as net investment hedges recognized in Other comprehensive income and earningsor Interest expense for the years ended December 31, 2017, 20162022, 2021 and 2015:

  Effect of Financial Instruments
  Year Ended December 31, 2017

Millions of dollars

 Gain (Loss)
Recognized
in AOCI		  Gain (Loss)
Reclassified
from AOCI
to Income		  Additional
Gain (Loss)
Recognized
in Income		  

Income Statement

Classification

Derivatives designated as hedges:

    

Commodities

 $(11)  $—    $—    Cost of sales

Foreign currency

  (466)   265   42  Other income, net; Interest expense

Interest rates

  (25)   (1)   2  Interest expense

Derivatives not designated as hedges:

    

Commodities

  —     —     (18)  Sales and other operating revenues

Commodities

  —     —     (23)  Cost of sales

Foreign currency

  —     —     (23)  Other income, net

Non-derivatives designated as hedges:

    

Long-term debt

  (109)   —     —    Other income, net
 

 

 

  

 

 

  

 

 

  
 $(611)  $264  $(20)  
 

 

 

  

 

 

  

 

 

  
  Effect of Financial Instruments
  Year Ended December 31, 2016

Millions of dollars

 Gain (Loss)
Recognized
in AOCI		  Gain (Loss)
Reclassified
from AOCI
to Income		  Additional
Gain (Loss)
Recognized
in Income		  

Income Statement

Classification

Derivatives designated as hedges:

    

Commodities

 $3  $—    $—    Cost of sales

Foreign currency

  (30)   (63)   46  Other income, net; Interest expense

Interest rates

  (17)   —     8  Interest expense

Derivatives not designated as hedges:

    

Commodities

  —     —     12  Sales and other operating revenues

Commodities

  —     —     6  Cost of sales

Foreign currency

  —     —     16  Other income, net

Non-derivatives designated as hedges:

    

Long-term debt

  58   —     —    Other income, net
 

 

 

  

 

 

  

 

 

  

Total

 $14  $(63)  $88  
 

 

 

  

 

 

  

 

 

  

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

  Effect of Financial Instruments
  Year Ended December 31, 2015

Millions of dollars

 Gain (Loss)
Recognized
in AOCI		  Gain (Loss)
Reclassified
from AOCI
to Income		  Additional
Gain (Loss)
Recognized
in Income		  

Income Statement

Classification

Derivatives designated as hedges:

    

Foreign currency

 $257  $(207)  $45  Other income, net; Interest expense

Interest rates

  17   —     38  Interest expense

Derivatives not designated as hedges:

    

Commodities

  —     —     (14)  Sales and other operating revenues

Commodities

  —     —     50  Cost of sales

Foreign currency

  —     —     (24)  Other income, net
 

 

 

  

 

 

  

 

 

  

Total

 $274  $(207)  $95  
 

 

 

  

 

 

  

 

 

  

For the years ended December 31, 2017, 2016 and 2015, the pretax effect of the periodic receipt of fixed interest and payment of variable interest associated with our fixed-for-floating interest rate swaps resulted in an additional gain (loss) recognized in Interest expense of $23 million, $21 million and $29 million, respectively.

Investments in Marketable Securities—The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our available-for-sale and held-to-maturity securities that are outstanding as2020 were immaterial.

As of December 31, 20172022, on a pre-tax basis, $6 million is scheduled to be reclassified from Accumulated other comprehensive loss as an increase to interest expense over the next twelve months.
Other Financial Instruments:
Cash and 2016:

   December 31, 2017 

Millions of dollars

  Cost   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		  Fair
Value		 

Available-for-sale securities:

       

Commercial paper

  $180   $—     $—    $180 

Bonds

   630    —      —     630 

Certificates of deposit

   150    —      —     150 

Limited partnership investments

   350    2    (5)   347 
  

 

 

   

 

 

   

 

 

  

 

 

 

Total available-for-sale securities

  $1,310   $2   $(5)  $1,307 
  

 

 

   

 

 

   

 

 

  

 

 

 
   December 31, 2016 

Millions of dollars

  Cost   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		  Fair
Value		 

Available-for-sale securities:

       

Commercial paper

  $232   $—     $—    $232 

Bonds

   141    —      —     141 

Certificates of deposit

   347    1    —     348 

Limited partnership investments

   350    2    —     352 
  

 

 

   

 

 

   

 

 

  

 

 

 

Total available-for-sale securities

  $1,070   $3   $—    $1,073 
  

 

 

   

 

 

   

 

 

  

 

 

 

Held-to-maturity securities:

       

Time deposits

  $74   $—     $—    $74 
  

 

 

   

 

 

   

 

 

  

 

 

 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash Equivalents—At December 31, 20172022 and 2016,2021, we had marketable securities classified as Cash and cash equivalents of $1,035$1,191 million and $351$438 million, respectively.

Our limited partnership investments include investments

Investments in among other things, equities and equity related securities, debt securities, credit instruments, global interest rate products, currencies, commodities, futures, options, warrants and swaps. These investments, which include both long and short positions, may be redeemed at least monthly with advance notice ranging up to ninety days. Equity Securities—The fair value of these funds is estimated using the net asset value (“NAV”) per share of the respective pooled fund investment.

No losses related to other-than-temporary impairmentscost basis of our available-for-saleinvestment in equity securities was $9 million as of December 31, 2021. As of December 31, 2022, there was no investment in equity securities remaining. The investment was under an orderly voluntary liquidation by the fund administrator in 2021. We received proceeds of $8 million, $335 million and held-to-maturity investments have been recorded in Accumulated other comprehensive loss$313 million from the sale or liquidation of this investment during the years ended December 31, 2017, 20162022, 2021 and 2015.

As2020, respectively. The investment was fully liquidated in January 2022.

98
Table of December 31, 2017, our available-for-sale securities had the following maturities: commercial paper securities held by the Company had maturities between two and three months; bonds had maturities between four and thirty-four months; certificates of deposit mature in three months; and limited partnership investments mature between one and three months.

The proceeds from maturities and sales of our available-for-sale securities during the years ended December 31, 2017, 2016 and 2015 are summarized in the following table:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Proceeds from maturities of securities

  $499   $674   $2,288 

Proceeds from sales of securities

   —      —      201 

We recognized realized gains of less than $1 million in connection with the sale of securities during the year ended December 31, 2015. No gain or loss was realized in connection with the sales of our available-for-sale securities during the years ended December 31, 2017 and 2016, respectively.

The specific identification method was used to identify the cost of the securities sold and the amounts reclassified out of Accumulated other comprehensive loss into earnings.

During the year ended December 31, 2017, we had maturities of our held-to-maturity securities of $75 million and had no transfers of investments classified as held-to-maturity to available-for-sale.

Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the fair value and unrealized losses related to available-for-sale and held-to-maturity securities that were in a continuous unrealized loss position for less than and greater than twelve months as of December 31, 2017, 2016 and 2015:

   December 31, 2017 
   Less than 12 months  Greater than 12 months 

Millions of dollars

  Fair
Value		   Unrealized
Loss		  Fair
Value		   Unrealized
Loss		 

Available-for-sale securities:

       

Limited partnership investments

  $117   $(5)  $—   $—   
   December 31, 2016 
   Less than 12 months  Greater than 12 months 

Millions of dollars

  Fair
Value		   Unrealized
Loss		  Fair
Value		   Unrealized
Loss		 

Available-for-sale securities:

       

Limited partnership investments

  $—   $—    $105   $(3) 
   December 31, 2015 
   Less than 12 months  Greater than 12 months 

Millions of dollars

  Fair
Value		   Unrealized
Loss		  Fair
Value		   Unrealized
Loss		 

Available-for-sale securities:

       

Limited partnership investments

  $345   $(5)  $—   $—   

15.

14. Pension and Other PostretirementPost-retirement Benefits

We have defined benefit pension plans which cover employees in the U.S. and various non-U.S.other countries. We also sponsor postretirementpost-retirement benefit plans other than pensions that provide medical benefits to certain of our U.S., Canadian and French employees. In addition, we provide other postemploymentpost-employment benefits such as early retirement and deferred compensation severance benefits to employees of certain non-U.S. countries. We use a measurement date of December 31 for all of our benefit plans.

For 2017, the actual returns on the assets of our U.S. and non-U.S. defined benefit pension plans were a gain of 14.45% and 8.82%, respectively.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Pension Benefits—The following table providestables provide a reconciliation of projected benefit obligations, plan assets and the funded status of our U.S. and non-U.S. defined benefit pension plans:

   Year Ended December 31, 
   2017  2016 

Millions of dollars

  U.S.  Non-U.S.  U.S.  Non-U.S. 

Change in benefit obligation:

     

Benefit obligation, beginning of period

  $1,846  $1,491  $2,066  $1,317 

Service cost

   47   39   44   32 

Interest cost

   60   23   88   32 

Actuarial loss (gain)

   104   (174)   15   254 

Plan amendments

   —     12   —     (4) 

Benefits paid

   (133)   (31)   (79)   (33) 

Participant contributions

   —     1   —     1 

Settlement

   —     (30)   (288)   (25) 

Business divestiture

   —     —     —     (11) 

Foreign exchange effects

   —     180   —     (72) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Benefit obligation, end of period

   1,924   1,511   1,846   1,491 
  

 

 

  

 

 

  

 

 

  

 

 

 

Change in plan assets:

     

Fair value of plan assets, beginning of period

   1,571   824   1,789   723 

Actual return on plan assets

   195   (60)   100   146 

Company contributions

   47   56   49   65 

Benefits paid

   (133)   (31)   (79)   (33) 

Participant contributions

   —     1   —     1 

Settlement

   —     (30)   (288)   (25) 

Foreign exchange effects

   —     92   —     (53) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Fair value of plan assets, end of period

   1,680   852   1,571   824 
  

 

 

  

 

 

  

 

 

  

 

 

 

Funded status of continuing operations,end of period

  $(244)  $(659)  $(275)  $(667) 
  

 

 

  

 

 

  

 

 

  

 

 

 
   December 31, 2017  December 31, 2016 

Millions of dollars

  U.S.  Non-U.S.  U.S.  Non-U.S. 

Amounts recognized in the Consolidated Balance Sheets consist of:

     

Prepaid benefit cost, long-term

  $8  $25  $3  $10 

Accrued benefit liability, current

   —     (24)   —     (18) 

Accrued benefit liability, long-term

   (252)   (660)   (278)   (659) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Funded status, end of period

  $(244)  $(659)  $(275)  $(667) 
  

 

 

  

 

 

  

 

 

  

 

 

 
   December 31, 2017  December 31, 2016 

Millions of dollars

  U.S.  Non-U.S.  U.S.  Non-U.S. 

Amounts recognized in Accumulated other comprehensive loss:

     

Actuarial and investment loss

  $385  $234  $376  $346 

Prior service cost (credit)

   2   8   2   (1) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Balance, end of period

  $387  $242  $378  $345 
  

 

 

  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
 20222021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Change in benefit obligation:
Benefit obligation, beginning of period$1,916 $1,924 $2,039 $2,159 
Service cost48 35 60 42 
Interest cost48 26 36 20 
Actuarial gain(356)(523)(29)(107)
Plan amendments— 4 — 1 
Benefits paid(56)(51)(71)(50)
Participant contributions— 1 — 2 
Settlement(460)(6)(119)(8)
Foreign exchange effects— (134)— (135)
Benefit obligation, end of period1,140 1,276 1,916 1,924 
Change in plan assets:
Fair value of plan assets, beginning of period1,743 1,082 1,548 1,168 
Actual return on plan assets(206)(275)229 (29)
Company contributions— 58 156 62 
Benefits paid(56)(51)(71)(50)
Participant contributions— 1 — 2 
Settlement(460)(6)(119)(8)
Foreign exchange effects— (76)— (63)
Fair value of plan assets, end of period1,021 733 1,743 1,082 
Funded status of continuing operations, end of period$(119)$(543)$(173)$(842)
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amounts recognized in the Consolidated Balance Sheets consists of the following:
 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Prepaid benefit cost, long-term$12 $50 $7 $60 
Accrued benefit liability, current— (26)— (31)
Accrued benefit liability, long-term(131)(567)(180)(871)
Funded status of continuing operations, end of period$(119)$(543)$(173)$(842)
Amounts recognized in Accumulated other comprehensive loss include the following:
 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Actuarial and investment loss$274 $39 $450 $273 
Prior service cost— 29 — 29 
Balance, end of period$274 $68 $450 $302 
The following additional information is presented for our U.S. and non-U.S. pension plans as of December 31:

   December 31, 2017   December 31, 2016 

Millions of dollars

  U.S.   Non-U.S.   U.S.   Non-U.S. 

Accumulated benefit obligation for defined benefit plans

  $1,887   $1,406   $1,816   $1,382 

plans:

 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Accumulated benefit obligation for defined benefit plans$1,114 $1,185 $1,854 $1,783 
Pension plans with projected benefit obligations in excess of the fair value of assets are summarized as follows at December 31:

   December 31, 2017   December 31, 2016 

Millions of dollars

  U.S.   Non-U.S.   U.S.   Non-U.S. 

Projected benefit obligations

  $1,776   $1,285   $1,703   $943 

Fair value of assets

   1,524    601    1,425    265 

follows:

 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Projected benefit obligations$667 $720 $1,909 $1,152 
Fair value of assets536 127 1,729 250 
Pension plans with accumulated benefit obligations in excess of the fair value of assets are summarized as follows at December 31:

   December 31, 2017   December 31, 2016 

Millions of dollars

  U.S.   Non-U.S.   U.S.   Non-U.S. 

Accumulated benefit obligations

  $1,742   $1,190   $1,676   $725 

Fair value of assets

   1,524    601    1,425    135 

The following table provides the componentsfollows:

 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Accumulated benefit obligations$655 $582 $1,086 $1,005 
Fair value of assets536 52 966 215 
100
Table of net periodic pension costs:

   U.S. Plans 
   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Net Periodic Pension Cost:

    

Service cost

  $47  $44  $45 

Interest cost

   60   88   85 

Actual return on plan assets

   (195)   (100)   27 

Less—return in excess of (less than) expected return

   74   (39)   (175) 
  

 

 

  

 

 

  

 

 

 

Expected return on plan assets

   (121)   (139)   (148) 

Settlement loss

   —     58   2 

Prior service cost amortization

   1   1   —   

Actuarial and investment loss amortization

   20   20   13 
  

 

 

  

 

 

  

 

 

 

Net periodic benefit cost (credit)

  $7  $72  $(3) 
  

 

 

  

 

 

  

 

 

 

Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

   Non-U.S. Plans 
   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Net Periodic Pension Cost:

    

Service cost

  $39  $32  $32 

Interest cost

   23   32   37 

Actual return on plan assets

   60   (146)   (63) 

Less—return in excess of (less than) expected return

   (79)   122   39 
  

 

 

  

 

 

  

 

 

 

Expected return on plan assets

   (19)   (24)   (24) 

Settlement loss

   2   3   —   

Prior service cost amortization

   2   —     2 

Actuarial and investment loss amortization

   16   8   8 
  

 

 

  

 

 

  

 

 

 

Net periodic benefit cost

  $63  $51  $55 
  

 

 

  

 

 

  

 

 

 

Lump sum

Components of net periodic pension costs for our U.S. and non-U.S. plans are as follows:
 U.S. Plans
 Year Ended December 31,
Millions of dollars202220212020
Service cost$48 $60 $63 
Interest cost48 36 53 
Expected return on plan assets(97)(114)(115)
Settlement loss103 27 4 
Actuarial loss amortization20 35 29 
Net periodic benefit cost$122 $44 $34 
 Non-U.S. Plans
 Year Ended December 31,
Millions of dollars202220212020
Service cost$35 $42 $46 
Interest cost26 20 21 
Expected return on plan assets(18)(17)(19)
Settlement loss— 1 2 
Curtailment gain— — (4)
Prior service cost amortization3 3 3 
Actuarial loss amortization7 15 23 
Net periodic benefit cost$53 $64 $72 
In May 2022, a LyondellBasell sponsored pension plan purchased a group annuity contract from an insurance company to transfer $361 million of our outstanding pension benefit paymentsobligations related to certain U.S. retirees and beneficiaries. The purchase of $288 million were made from existingthe group annuity contract was funded with pension plan assetsassets. The insurance company is now required to pay and administer the retirement benefits owed to approximately 9,000 U.S. retirees and beneficiaries with no change to their monthly retirement benefit payment amounts. In connection with this transaction, in 2016. These payments in total exceeded annual service and interest cost, resulting inthe second quarter of 2022, we recognized a non-cash pension settlement expenseloss of $58 million. A significant portion$80 million, reflected in Other (expense) income, net, primarily related to the accelerated recognition of the lump sum payments were due to a voluntary lump sum program to certain former employeesactuarial losses included in select U.S. pension plans.

Our goal is to manage pension investments over the longer term to achieve optimal returns with an acceptable levelAccumulated other comprehensive loss.

101
Table of risk and volatility. The assets are externally managed by professional investment firms and performance is evaluated continuously against specific benchmarks.

Contents

LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The actual and target asset allocations for our plans are as follows:

   2017  2016 

Millions of dollars

  Actual  Target  Actual  Target 

Canada

     

Equity securities

   50%   50%   49%   50% 

Fixed income

   50%   50%   51%   50% 

United Kingdom—Lyondell Chemical Plans

     

Equity securities

   49%   50%   50%   50% 

Fixed income

   51%   50%   50%   50% 

United Kingdom—Basell Plans

     

Equity securities

   49%   50%   58%   60% 

Fixed income

   51%   50%   42%   40% 

United States

     

Equity securities

   36%   32%   33%   32% 

Fixed income

   37%   38%   47%   38% 

Alternatives

   27%   30%   20%   30% 

Netherlands—Lyondell Chemical Plans

     

Fixed income

   N/A   N/A   100%   100% 

Netherlands—Basell Plans

     

Equity securities

   N/A   N/A   7%   10% 

Fixed income

   N/A   N/A   93%   90% 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During 2017, Netherlands Defined Benefits pension plans modified their insurance arrangements. As a result, the plan assets were transferred to the insurer for investment in its pooled asset portfolio, and treated as a nonparticipating insurance contract. The associated plan assets of $527 million underlying the insurance arrangement are measured at the cash surrender value, which is derived primarily from an actuarial determination of the discounted benefits cash flows. The transfer of plan assets resulted in a change in classification in the fair value hierarchy from Level 2 in 2016 for fixed income securities to Level 3 in 2017. Furthermore, changes in the underlying discount rate assumption (1.93%), resulted in an $83 million reduction reported in actual return on plan assets and a loss in Other Comprehensive Income. This other comprehensive loss was effectively offset by a corresponding gain due to the change in the discount rate used to measure the related plan benefit obligation.

 20222021
ActualTargetActualTarget
Canada
Fixed income100 %100 %100 %100 %
United Kingdom—Lyondell Chemical Plans
Equity securities34 %38 %39 %38 %
Fixed income66 %62 %61 %62 %
United Kingdom—Basell Plans
Equity securities22 %25 %40 %40 %
Fixed income78 %75 %60 %60 %
United Kingdom—A. Schulman Plans
Equity securities and growth assets22 %25 %51 %50 %
Fixed income and matching assets78 %75 %49 %50 %
United States
Equity securities35 %35 %32 %35 %
Fixed income38 %39 %40 %39 %
Alternatives27 %26 %28 %26 %
We estimate the following contributions to our pension plans in 2018:

Millions of dollars

  U.S.   Non-U.S. 

Defined benefit plans

  $44   $63 

Multi-employer plans

   —      7 
  

 

 

   

 

 

 

Total

  $44   $70 
  

 

 

   

 

 

 

2023:

Millions of dollarsU.S.Non-U.S.
Defined benefit plans$9 $54 
Multi-employer plans— 6 
Total$9 $60 
As of December 31, 2017,2022, future expected benefit payments by our pension plans which reflect expected future service, as appropriate, are as follows:

Millions of dollars

  U.S.   Non-U.S. 

2018

  $153   $59 

2019

   151    55 

2020

   146    53 

2021

   142    52 

2022

   137    54 

2023 through 2027

   641    292 

Millions of dollarsU.S.Non-U.S.
2023$121 $59 
2024123 58 
202591 60 
202694 61 
202794 62 
2028 through 2032475 332 
The following tables set forth the principal assumptions on discount rates, projected rates of compensation increase and expected rates of return on plan assets, where applicable. These assumptions vary for the different plans, as they are determined in consideration of local conditions.

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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The weighted average assumptions used in determining the net benefit liabilities for our pension plans were as follows at December 31:

   2017  2016 
   U.S.  Non-U.S.  U.S.  Non-U.S. 

Weighted average assumptions:

     

Discount rate

   3.73%   2.13%   4.20%   1.52% 

Rate of compensation increase

   4.00%   2.94%   4.00%   2.93% 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 20222021
 U.S.Non-U.S.U.S.Non-U.S.
Discount rate5.50 %3.99 %2.80 %1.45 %
Rate of compensation increase4.65 %2.66 %4.74 %2.64 %
Cash balance interest credit rate3.80 %— %1.78 %— %
The weighted average assumptions used in determining net benefit costs for our pension plans were as follows:

   Year Ended December 31, 
   2017  2016  2015 
   U.S.  Non-U.S.  U.S.  Non-U.S.  U.S.  Non-U.S. 

Weighted average assumptions for the year:

       

Discount rate

   4.20%   1.52%   4.38%   2.70%   4.04%   2.84% 

Expected return on plan assets

   8.00%   2.15%   8.00%   3.37%   8.00%   3.63% 

Rate of compensation increase

   4.00%   2.93%   4.00%   3.15%   4.00%   3.19% 

 Year Ended December 31,
 202220212020
 U.S.Non-U.S.U.S.Non-U.S.U.S.Non-U.S.
Discount rate2.80 %1.45 %2.54 %0.99 %3.16 %1.03 %
Expected return on plan assets7.25 %1.85 %7.25 %1.44 %7.25 %1.79 %
Rate of compensation increase4.74 %2.64 %4.63 %2.55 %4.83 %2.59 %
The discount rate assumptions reflect the rates at which the benefit obligations could be effectively settled, based on the yields of high qualityhigh-quality long-term bonds where the term closely matches the term of the benefit obligations. At the beginning of 2017, we changed the approach used toWe measure service and interest costs for pension and other postretirement benefits under significant U.S. plans. For 2016, we measured service and interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations. For 2017, we measured service and interest costs by applying the specific spot rates along that same yield curve to the plans’ projected cash flows. We believeflows of the newplans. This approach provides a more precise measurement of service and interest costs. This change did not affect the measurement of our plan obligations. We will account for this change as a change in accounting estimate and, accordingly, will account for it on a prospective basis. The weighted average expected long-term rate of return on assets in our U.S. plans of 8.00%7.25% is based on the average level of earnings that our independent pension investment advisoradviser had advised could be expected to be earned over a fifteen to twenty year time period consistent with the plans’ target asset allocation of the plans, historical capital market performance, historical plan performance (since the 1997 inception of the U.S. Master Trust) and a forecast of expected future asset returns. The weighted average expected long-term rate of return on assets in our non-U.S. plans of 2.15%1.85% is based on expectations and asset allocations that vary by region. We review these long-term assumptions on a periodic basis.

In the U.S. plans, the expected rate of return was derived based on the target asset allocation of 32% equity securities (8.3% expected return), 38% fixed income securities (5.6% expected return), and 30% alternative investments (9.5% expected return). In the non-U.S. plans, the investments consist primarily of fixed income securities whose expected rates of return range from 2.45% to 5.75%.

The following table reflects the actual annualized total returns for the periods ended December 31, 2017:

      Annualized 
    December 31,
2017		  One
Year		   Three
Years		   Five
Years		   Ten
Years		 

U.S. plan assets

   14.45%   14.45%    6.78%    8.01%    5.30% 

Non-U.S. plan assets

   8.82%   8.82%    9.40%    10.68%    7.82% 

Actual rates of return may differ from the expected rate due to the volatility normally experienced in capital markets. The goal is to manage the investmentsAssets are externally managed by professional investment firms over the long term to achieve optimal returns with an acceptable level of risk and volatility in order to meet the benefit obligations of the plans as they come due.

Our pension plans have not directly invested in securities of LyondellBasell N.V., and there have been no significant transactions between any of the pension plans and the Company or related parties thereof.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The pension investments that are measured at fair value as of December 31, 2017 and 2016 are summarized below:

   December 31, 2017 

Millions of dollars

  Fair Value   Level 1   Level 2   Level 3 

U.S.

        

Common and preferred stock

  $410   $410   $—     $—   

Commingled funds measured at net asset value

   410    —      —      —   

Fixed income securities

   225    —      225    —   

Real estate measured at net asset value

   102       

Hedge funds measured at net asset value

   253       

Private equity measured at net asset value

   94       

U.S. government securities

   148    148    —      —   

Cash and cash equivalents

   34    34    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total U.S. Pension Assets

  $1,676   $592   $225   $—   
  

 

 

   

 

 

   

 

 

   

 

 

 

   December 31, 2017 

Millions of dollars

  Fair Value   Level 1   Level 2   Level 3 

Non-U.S.

        

Common stock

  $—     $—     $—     $—   

Commingled funds measured at net asset value

   297       

Fixed income securities

   —      —      —      —   

Insurance arrangements

   549    —      —      549 

Cash and cash equivalents

   5    5    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Non-U.S. Pension Assets

  $851   $5   $—     $549 
  

 

 

   

 

 

   

 

 

   

 

 

 
   December 31, 2016 

Millions of dollars

  Fair Value   Level 1   Level 2   Level 3 

U.S.

        

Common and preferred stock

  $394   $394   $—     $—   

Commingled funds measured at net asset value

   215       

Fixed income securities

   215    —      215    —   

Real estate measured at net asset value

   100       

Hedge funds measured at net asset value

   126       

Private equity measured at net asset value

   77       

U.S. government securities

   138    136    2    —   

Cash and cash equivalents

   294    294    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total U.S. Pension Assets

  $1,559   $824   $217   $—   
  

 

 

   

 

 

   

 

 

   

 

 

 

 December 31, 2022
Millions of dollarsFair ValueLevel 1Level 2Level 3
U.S.
Common and preferred stock$142 $142 $— $— 
Commingled funds measured at net asset value357 
Real estate measured at net asset value100 
Hedge funds measured at net asset value119 
Private equity measured at net asset value60 
U.S. government securities223 223 — — 
Cash and cash equivalents27 27 — — 
Total U.S. Pension Assets$1,028 $392 $— $— 
 December 31, 2022
Millions of dollarsFair ValueLevel 1Level 2Level 3
Non-U.S.
Insurance arrangements$492 $— $— $492 
Commingled funds measured at net asset value239 
Cash and cash equivalents1 1 — — 
Total Non-U.S. Pension Assets$732 $1 $— $492 
 December 31, 2021
Millions of dollarsFair ValueLevel 1Level 2Level 3
U.S.
Common and preferred stock$279 $279 $— $— 
Commingled funds measured at net asset value523 
Real estate measured at net asset value113 
Hedge funds measured at net asset value171 
Private equity measured at net asset value203 
U.S. government securities401 401 — — 
Cash and cash equivalents64 64 — — 
Total U.S. Pension Assets$1,754 $744 $— $— 
 December 31, 2021
Millions of dollarsFair ValueLevel 1Level 2Level 3
Non-U.S.
Insurance arrangements$737 $— $— $737 
Commingled funds measured at net asset value341 
Cash and cash equivalents2 2 — — 
Total Non-U.S. Pension Assets$1,080 $2 $— $737 
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

   December 31, 2016 

Millions of dollars

  Fair Value   Level 1   Level 2   Level 3 

Non-U.S.

        

Common stock

  $2   $2   $—     $—   

Commingled funds measured at net asset value

   337       

Fixed income securities

   463    —      463    —   

Cash and cash equivalents

   21    21    —      —   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Non-U.S. Pension Assets

  $823   $23   $463   $—   
  

 

 

   

 

 

   

 

 

   

 

 

 

Certain non-U.S. plans have investments in a pooled asset portfolio which are treated as a nonparticipating insurance contract. The associated plan assets underlying the insurance arrangement are measured at the cash surrender value, which is derived primarily from an actuarial determination of the discounted benefits cash flows. As such, these assets are considered as using significant unobservable inputs (Level 3). These defined benefits pension plan assets at December 31, 2021 were valued at $737 million and has decreased to $492 million at December 31, 2022. The change is due primarily to the reduction of the assets in relation with the increase of the discount rate from 2021 to 2022.
The fair value measurements of the investments in certain entities that calculate net asset value per share as of December 31, 20172022 are as follows:

Millions of dollars

 Fair
Value		  Unfunded
Commitments		   Remaining
Life		   

Redemption Frequency
(if currently eligible)

 Trade to
Settlement
Terms		  Redemption
Notice Period		 

U.S.

        

Commingled fund investing in Domestic Equity

 $106  $—      N/A   daily  1 to 3 days   3 to 4 days 

Commingled fund investing in International Equity

  61   —      N/A   daily  1 to 3 days   3 days 

Commingled fund investing in Fixed Income

  243   —      N/A   daily  1 to 3 days   3 to 7 days 

Real Estate

  102   12    10 years   quarterly  15 to 25 days   45 to 90 days 

Hedge Funds

  253   —      N/A   quarterly  10 to 30 days   20 to 90 days 

Private Equity

  94   92    10 years   Not eligible  N/A   N/A 
 

 

 

  

 

 

       

Total U.S.

 $859  $104       
 

 

 

  

 

 

       

Millions of dollars

 Fair
Value		  Unfunded
Commitments		  Remaining
Life		   

Redemption Frequency
(if currently eligible)

 Trade to
Settlement
Terms		  Redemption
Notice
Period		 
Non-U.S.       

Commingled fund investing in Domestic Equity

 $29  $—     N/A   1 to 7 days  1 to 3 days   1 to 3 days 

Commingled fund investing in International Equity

  119   —     N/A   1 to 7 days  1 to 3 days   1 to 3 days 

Commingled fund investing in Fixed Income

  149   —     N/A   daily  1 to 3 days   3 days 
 

 

 

  

 

 

      

Total Non-U.S.

 $297  $—        
 

 

 

  

 

 

      

Millions of dollarsFair
Value		Unfunded
Commitments		Remaining
Life		Redemption Frequency
(if currently eligible)		Trade to
Settlement
Terms		Redemption
Notice Period
U.S.
Commingled fund investing in Domestic Equity$148 $— N/Adaily1 to 3 days3 to 4 days
Commingled fund investing in International Equity65 — N/Adaily1 to 3 days3 days
Commingled fund investing in Fixed Income144 — N/Adaily1 to 3 days3 to 7 days
Real Estate100 13 10 yearsquarterly15 to 25 days45 to 90 days
Hedge Funds119 — N/Aquarterly10 to 30 days20 to 90 days
Private Equity60 18 10 yearsNot eligibleN/AN/A
Total U.S.$636 $31 
Millions of dollarsFair
Value		Unfunded
Commitments		Remaining
Life		Redemption Frequency
(if currently eligible)		Trade to
Settlement
Terms		Redemption
Notice
Period
Non-U.S.
Commingled fund investing in Domestic Equity$20 $— N/A1 to 7 days1 to 3 days1 to 3 days
Commingled fund investing in International Equity21 — N/A1 to 7 days1 to 3 days1 to 3 days
Commingled fund investing in Fixed Income198 — N/Adaily1 to 3 days3 days
Total Non-U.S.$239 $— 
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The fair value measurements of the investments in certain entities that calculate net asset value per share as of December 31, 20162021 are as follows:

Millions of dollars

 Fair
Value		  Unfunded
Commitments		  Remaining
Life		   

Redemption Frequency
(if currently eligible)

 Trade to
Settlement
Terms		  Redemption
Notice Period		 
U.S.       

Commingled fund investing in Domestic Equity

 $78  $—     N/A   daily  1 to 3 days   3 to 4 days 

Commingled fund investing in International Equity

  47   —     N/A   daily  1 to 3 days   3 days 

Commingled fund investing in Fixed Income

  90   —     N/A   daily  1 to 3 days   3 to 7 days 

Real Estate

  100   9   10 years   quarterly  15 to 25 days   45 to 90 days 

Hedge Funds

  126   —     N/A   quarterly  10 to 30 days   20 to 90 days 

Private Equity

  77   96   10 years   Not eligible  N/A   N/A 
 

 

 

  

 

 

      

Total U.S.

 $518  $105      
 

 

 

  

 

 

      

Millions of dollars

 Fair
Value		  Unfunded
Commitments		  Remaining
Life		   

Redemption Frequency
(if currently eligible)

 Trade to
Settlement
Terms		 Redemption
Notice Period

Non-U.S.

      

Commingled fund investing in Domestic Equity

 $27  $—     N/A   1 to 7 days 1 to 3 days 1 to 3 days

Commingled fund investing in International Equity

  125   —     N/A   1 to 7 days 1 to 3 days 1 to 3 days

Commingled fund investing in Fixed Income

  185   —     N/A   daily 1 to 3 days 3 days
 

 

 

  

 

 

      

Total Non-U.S.

 $337  $—        
 

 

 

  

 

 

      

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The redemption frequency may be subject to market conditions and/or contractual obligations. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Millions of dollarsFair
Value		Unfunded
Commitments		Remaining
Life		Redemption Frequency
(if currently eligible)		Trade to
Settlement
Terms		Redemption
Notice Period
U.S.
Commingled fund investing in Domestic Equity$148 $— N/Adaily1 to 3 days3 to 4 days
Commingled fund investing in International Equity128 — N/Adaily1 to 3 days3 days
Commingled fund investing in Fixed Income247 — N/Adaily1 to 3 days3 to 7 days
Real Estate113 14 10 yearsquarterly15 to 25 days45 to 90 days
Hedge Funds171 — N/Aquarterly10 to 30 days20 to 90 days
Private Equity203 72 10 yearsNot eligibleN/AN/A
Total U.S.$1,010 $86 
Millions of dollarsFair
Value		Unfunded
Commitments		Remaining
Life		Redemption  Frequency
(if currently eligible)		Trade to
Settlement
Terms		Redemption
Notice 
Period
Non-U.S.
Commingled fund investing in Domestic Equity$35 $— N/A1 to 7 days1 to 3 days1 to 3 days
Commingled fund investing in International Equity67 — N/A1 to 7 days1 to 3 days1 to 3 days
Commingled fund investing in Fixed Income239 — N/Adaily1 to 3 days3 days
Total Non-U.S.$341 $— 
Multi-employer Plan—The Company participates in a multi-employer arrangement with Pensionskasse der BASF WaG V.VaG (“Pensionskasse”) which provides for benefits to the majority of our employees in Germany. Up to a certain salary level, the benefit obligations are covered by contributions of the Company and the employees to the plan. Contributions made to the multi-employer plan are expensed as incurred.

The following table provides disclosure related to the Company’s multi-employer plan:

   Company Contributions 

Millions of dollars

  2017   2016   2015 

Pensionskasse(a)

  $27   $7   $7 

(a)

The Company-specific plan information for the Pensionskasse is not publicly available and the plan is not subject to a collective-bargaining agreement. The plan provides fixed, monthly retirement payments on the

 Company Contributions
Millions of dollars202220212020
Pensionskasse$7 $6 $7 
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basis of the credits earned by the participating employees. To the extent that the Pensionskasse is underfunded, the future contributions to the plan may increase and may be used to fund retirement benefits for employees related to other employers. The Pensionskasse financial statements for the years ended December 31, 2016 and 2015 indicated total assets of $7,897 million and $7,560 million, respectively; total actuarial present value of accumulated plan benefits of $7,559 million and $7,232 million, respectively; and total contributions for all participating employers of $246 million and $244 million, respectively. Our plan contributions did not exceed 5 percent of the total contributions in 2017, 2016 or 2015.

The Company-specific plan information for the Pensionskasse is not publicly available and the plan is not subject to a collective-bargaining agreement. The plan provides fixed, monthly retirement payments on the basis of the credits earned by the participating employees. To the extent that the Pensionskasse is underfunded, the future contributions to the plan may increase and may be used to fund retirement benefits for employees related to other employers. The Pensionskasse financial statements for the years ended December 31, 2021 and 2020 indicated total assets of $9,944 million and $10,257 million, respectively; total actuarial present value of accumulated plan benefits of $9,524 million and $9,828 million, respectively; and total contributions for all participating employers of $232 million and $254 million, respectively. Our plan contributions did not exceed 5 percent of the total contributions in 2022, 2021 or 2020.
Other PostretirementPost-retirement Benefits—We sponsor unfunded health care and life insurance plans covering certain eligible retired employees and their eligible dependents. Generally, the medical plans pay a stated percentage of medical expenses reduced by deductibles and other coverage. Life insurance benefits are generally provided by insurance contracts. We retain the right, subject to existing agreements, to modify or eliminate these benefits.

The following table providestables provide a reconciliation of benefit obligations of our unfunded other postretirementpost-retirement benefit plans:

   Year Ended December 31, 
   2017  2016 

Millions of dollars

  U.S.  Non-U.S.  U.S.  Non-U.S. 

Change in benefit obligation:

     

Benefit obligation, beginning of period

  $276  $67  $285  $56 

Service cost

   3   2   3   2 

Interest cost

   9   1   11   2 

Actuarial loss (gain)

   6   (15)   (7)   9 

Benefits paid

   (21)   (1)   (23)   (1) 

Participant contributions

   7   —     7   —   

Foreign exchange effects

   —     8   —     (1) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Benefit obligation, end of period

   280   62   276   67 
  

 

 

  

 

 

  

 

 

  

 

 

 

Change in plan assets:

     

Fair value of plan assets, beginning of period

   —     —     —     —   

Employer contributions

   14   1   16   1 

Participant contributions

   7   —     7   —   

Benefits paid

   (21)   (1)   (23)   (1) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Fair value of plan assets, end of period

   —     —     —     —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Funded status, end of period

  $(280)  $(62)  $(276)  $(67) 
  

 

 

  

 

 

  

 

 

  

 

 

 

   December 31, 2017  December 31, 2016 

Millions of dollars

  U.S.  Non-U.S.  U.S.  Non-U.S. 

Amounts recognized in the Consolidated

     

Balance Sheets consist of:

     

Accrued benefit liability, current

  $(18)  $(1)  $(18)  $(1) 

Accrued benefit liability, long-term

   (262)   (61)   (258)   (66) 
  

 

 

  

 

 

  

 

 

  

 

 

 

Funded status, end of period

  $(280)  $(62)  $(276)  $(67) 
  

 

 

  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
 20222021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Change in benefit obligation:
Benefit obligation, beginning of period$203 $68 $211 $86 
Service cost1 2 1 3 
Interest cost5 1 4 1 
Actuarial (gain) loss(40)(23)8 (17)
Benefits paid(23)(1)(28)(1)
Participant contributions7 — 7 — 
Plan amendments— — — 2 
Foreign exchange effects— (6)— (6)
Benefit obligation, end of period153 41 203 68 
Change in plan assets:
Fair value of plan assets, beginning of period— — — — 
Employer contributions16 1 21 1 
Participant contributions7 — 7 — 
Benefits paid(23)(1)(28)(1)
Fair value of plan assets, end of period— — — — 
Funded status, end of period$(153)$(41)$(203)$(68)

Amounts recognized in the Consolidated Balance Sheets are as follows:
 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Accrued benefit liability, current$(14)$(1)$(15)$(1)
Accrued benefit liability, long-term(139)(40)(188)(67)
Funded status, end of period$(153)$(41)$(203)$(68)
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   December 31, 2017  December 31, 2016 

Millions of dollars

  U.S.   Non-U.S.  U.S.   Non-U.S. 

Amounts recognized in Accumulated other comprehensive loss:

       

Actuarial and investment income (loss)

  $19   $(19)  $25   $(37) 
  

 

 

   

 

 

  

 

 

   

 

 

 

Balance, end of period

  $19   $(19)  $25   $(37) 
  

 

 

   

 

 

  

 

 

   

 

 

 

Amounts recognized in Accumulated other comprehensive loss are as follows:
 December 31, 2022December 31, 2021
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.
Actuarial and investment income (loss)$89 $18 $54 $(7)
Prior service cost— (1)— (1)
Balance, end of period$89 $17 $54 $(8)
The following table provides the components of net periodic other postretirement benefit costs:

   U.S. Plans 
   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Net Periodic Other Postretirement Cost:

      

Service cost

  $3   $3   $4 

Interest cost

   9    11    13 

Actuarial loss amortization

   —      —      2 
  

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

  $12   $14   $19 
  

 

 

   

 

 

   

 

 

 
   Non-U.S. Plans 
   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Net Periodic Other Postretirement Cost:

      

Service cost

  $2   $2   $1 

Interest cost

   1    2    2 

Actuarial loss amortization

   3    2    3 
  

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

  $6   $6   $6 
  

 

 

   

 

 

   

 

 

 

post-retirement costs are as follows:
 U.S. Plans
 Year Ended December 31,
Millions of dollars202220212020
Service cost$1 $1 $1 
Interest cost5 4 7 
Actuarial gain amortization(5)(6)(2)
Net periodic benefit cost$1 $(1)$6 
 Non-U.S. Plans
 Year Ended December 31,
Millions of dollars202220212020
Service cost$2 $3 $3 
Interest cost1 1 1 
Actuarial loss amortization— 2 3 
Net periodic benefit cost$3 $6 $7 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table setstables set forth the assumed health care cost trend rates:

   U.S. Plans 
   December 31, 
   2017  2016 

Assumed health care trend rate:

   

Immediate trend rate

   6.7%   7.0% 

Ultimate trend rate (the rate to which the cost trend rate is assumed to decline)

   4.5%   4.5% 

Year that the rate reaches the ultimate trend rate

   2038   2038 
   Non-U.S. Plans 
   Canada  France 
    December 31,  December 31, 
    2017  2016  2017  2016 

Assumed health care trend rate:

     

Immediate trend rate

   6.0%   6.0%   4.7%   4.6% 

Ultimate trend rate (the rate to which the cost trend rate is assumed to decline)

   4.5%   4.5%   4.7%   4.6% 

Year that the rate reaches the ultimate trend rate

   2021   2021   —     —   

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

rates for our U.S. and Non-U.S. Plans:

 U.S. Plans
 December 31,
 20222021
Immediate trend rate6.5 %6.3 %
Ultimate trend rate (the rate to which the cost trend rate is assumed to decline)4.5 %4.5 %
Year that the rate reaches the ultimate trend rate20312029
 Non-U.S. Plans
 CanadaFrance
  December 31,December 31,
  2022202120222021
Immediate trend rate4.5 %4.5 %4.5 %4.5 %
Ultimate trend rate (the rate to which the cost trend rate is assumed to decline)4.5 %4.5 %4.5 %4.5 %
Year that the rate reaches the ultimate trend rate— — — — 
The health care cost trend rate assumption does not typically have a significant effect on the amounts reported due to limits on maximum contribution levels to the medical plans. However, changing the assumed health care cost trend rates by one percentage point in each year would increase or decrease the accumulated other postretirement benefit liability as of December 31, 2017 by $18 million and $12 million, respectively, for non-U.S. plans and by less than $1 million for U.S. plans and would not have a material effect on the aggregate service and interest cost components of the net periodic other postretirement benefit cost for the year then ended.

The weighted average assumptions used in determining the net benefit liabilities for our other postretirementpost-retirement benefit plans were as follows:

   December 31, 
   2017  2016 
   U.S.  Non-U.S.  U.S.  Non-U.S. 

Weighted average assumptions:

     

Discount rate

   3.66%   2.48%   4.07%   1.69% 

Rate of compensation increase

   4.00%   —     4.00%   —   

 December 31,
 20222021
 U.S.Non-U.S.U.S.Non-U.S.
Discount rate5.44 %3.95 %2.75 %1.47 %
Rate of compensation increase4.16 %— 4.18 %— 
The weighted average assumptions used in determining the net benefit costs for our other postretirementpost-retirement benefit plans were as follows:

   Year Ended December 31, 
   2017  2016  2015 
   U.S.  Non-U.S.  U.S.  Non-U.S.  U.S.  Non-U.S. 

Weighted average assumptions for the year:

       

Discount rate

   4.07%   1.69%   4.23%   2.69%   3.85%   2.92% 

Rate of compensation increase

   4.00%   —     4.00%   —     4.00%   —   

 Year Ended December 31,
 202220212020
 U.S.Non-U.S.U.S.Non-U.S.U.S.Non-U.S.
Discount rate2.75 %1.47 %2.48 %1.10 %3.12 %1.20 %
Rate of compensation increase4.18 %— 4.19 %— 4.50 %— 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of December 31, 2017,2022, future expected benefit payments by our other postretirementpost-retirement benefit plans, which reflect expected future service, as appropriate, were as follows:

Millions of dollars

  U.S.   Non-U.S. 

2018

  $19   $1 

2019

   20    1 

2020

   20    1 

2021

   21    1 

2022

   21    1 

2023 through 2027

   98    8 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Millions of dollarsU.S.Non-U.S.
2023$15 $1 
202415 1 
202515 1 
202614 1 
202714 1 
2028 through 203262 8 
Accumulated Other Comprehensive Loss—The following pretax amounts were recognized in Accumulated other comprehensive loss as of and for the years ended December 31, 2017 and 2016:

   Pension Benefits  Other Benefits 

Millions of dollars

  Actuarial
(Gain) Loss		  Prior Service
Cost (Credit)		  Actuarial
(Gain) Loss		  Prior Service
Cost (Credit)		 

December 31, 2015

  $625  $6  $12  $—   

Arising during the period

   186   (4)   2   —   

Amortization

   (28)   (1)   (2)   —   

Settlement loss

   (61)   —     —     —   
  

 

 

  

 

 

  

 

 

  

 

 

 

December 31, 2016

   722   1   12   —   

Arising during the period

   (65)   12   (9)   —   

Amortization

   (36)   (3)   (3)   —   

Settlement loss

   (2)   —     —     —   
  

 

 

  

 

 

  

 

 

  

 

 

 

December 31, 2017

  $619  $10  $—    $—   
  

 

 

  

 

 

  

 

 

  

 

 

 

In 2017, $65 million of2022, pension benefits actuarial gain primarily reflects $72and other post-retirement benefits actuarial gain of $281 million of gainsand $65 million, respectively, are primarily due to changes in discount rate assumption offset by $7 million of losses due to asset experience. There were $9 million of other postretirement benefitsand updated actuarial gains primarily due to $2 million of discount rate assumption changes and $6 million of changes due to favorable liability experience, and other immaterial items.assumptions. In 2016, $186 million of2021, pension benefits actuarial lossgain and other post-retirement benefits actuarial gain of $205 million and $9 million, respectively, are primarily reflects $265 million of losses due to changes in discount rate assumption offset by $79 million of gains due to asset experience (actual asset return compared to expected return). There were $2 million of other postretirement benefitsand updated actuarial losses due to $14 million of discount rate assumption changes, offset by a gain of $10 million of changes due to favorable liability experience, and other immaterial items.

assumptions.

Deferred income taxes related to amounts in Accumulated other comprehensive income (loss)loss include provisions of $208$53 million and $237$178 million as of December 31, 20172022 and 2016,2021, respectively.

At December 31, 2017, Accumulated other comprehensive income (loss) of $10 million represents net actuarial and investment losses related to non-U.S. pension plans that are expected to be recognized as a component of net periodic benefit cost in 2018. There are $21 million of net actuarial and investment losses and $1 million of prior service cost in AOCI at December 31, 2017 for U.S. pension plans expected to be recognized in net periodic benefit cost in 2018. At December 31, 2017, AOCI included $1 million of net actuarial loss related to non-U.S. other postretirement benefits that is expected to be recognized in net periodic benefit cost in 2018.

Defined Contribution Plans—Most employees in the U.S. and certain non-U.S. countries are eligible to participate in defined contribution plans (“Employee Savings Plan”) by contributing a portion of their compensation. We also make employer contributions, such as matching contributions, to certain of these plans. The Company also has a nonqualified deferred compensation plan that covers senior management in the U.S. TheThis plan was amended in April 2013 to provide for companyCompany contributions on behalf of certain eligible employees who earn base pay above the IRS annual compensation limit.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table provides the companyCompany contributions to the Employee Savings Plans:

   Company Contributions 
   2017   2016   2015 

Millions of dollars

    U.S.     Non-U.S.     U.S.     Non-U.S.     U.S.     Non-U.S. 

Employee Savings Plans

  $36   $5   $35   $7   $32   $4 

16.

 Company Contributions
 202220212020
Millions of dollarsU.S.Non-U.S.U.S.Non-U.S.U.S.Non-U.S.
Employee Savings Plans$53 $8 $51 $8 $48 $8 

15. Incentive and Share-Based Compensation

We are authorized to grant restricted stock units, stockRSUs, Stock options, performance share units,PSUs, and other cash and stock awards under our Long-Term Incentive Plan (“LTIP”). The Compensation and Talent Development Committee determines the recipients of theoversees our equity awards,award grants, the type of awards, the required performance measures and the timing and duration of each grant. The maximum number of shares of our common stock reserved for issuance under the LTIP is 22,000,000. As30,000,000 shares. Assuming a maximum payout for our PSU awards, there were 9,134,270 shares available for issuance as of December 31, 2017, there were 5,806,969 shares remaining available for issuance assuming maximum payout for PSUs. Upon share exercise or payment, shares are issued from our treasury shares.

2022.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Total share-based compensation expense and the associated tax benefits are as follows for the years ended December 31:

Millions of dollars

  2017   2016  2015 

Compensation Expense:

     

Restricted stock units

  $13   $10  $11 

Stock options

   7    7   6 

Qualified performance awards

   —      (3)   25 

Performance share units

   35    24   11 
  

 

 

   

 

 

  

 

 

 

Total

  $55   $38  $53 
  

 

 

   

 

 

  

 

 

 

Tax Benefit:

     

Restricted stock units

  $5   $4  $4 

Stock options

   2    2   2 

Qualified performance awards

   —      (1)   9 

Performance share units

   12    8   4 
  

 

 

   

 

 

  

 

 

 

Total

  $19   $13  $19 
  

 

 

   

 

 

  

 

 

 

Beginning in 2017, we elected to recognize forfeitures as they occur for stock-based compensation.

follows:

Year Ended December 31,
Millions of dollars202220212020
Compensation Expense:
Restricted stock units$33 $30 $26 
Stock options8 9 8 
Performance share units29 27 21 
Total$70 $66 $55 
Tax Benefit:
Restricted stock units$8 $7 $6 
Stock options2 2 2 
Performance share units7 6 5 
Total$17 $15 $13 
Restricted Stock Unit Awards (“RSUs”)—RSUs generally entitle the recipient to be paid out an equal number of ordinary shares upon vesting. RSUs generally cliff vest on the third anniversary of the grant date. RSUs, which are subject to customary accelerated vesting or forfeiture in the event of certain termination events, are accounted for as an equity award with compensation cost recognized in the income statement ratably over the vesting period.

In 2015, 190,399 RSUs were granted to the Chief Executive Officer (“CEO”) and three other executive officers. These RSUs vest in annual tranches with 10% vested after one year and an additional 15% vested after two years and the remaining vesting in equal tranches after each of the third, fourth, and fifth years. Compensation cost for these awards is recognized using the graded vesting method.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The holders of all RSUs are entitled to dividend equivalents to be settled no later than March 15, following the year in which dividends are paid, as long as the participant is in full employment at the time of the dividend payment. See the “Dividend Distribution” section of Note 19 for the per share amount of dividend equivalent payments made to the holdersfair value of RSUs during 2017, 2016 and 2015. Total dividend equivalent payments were $1 million in each of 2017 and 2016, and $2 million in 2015.

RSUs are valued atis based on the market price of the underlying stock on the date of grant. The weighted average grant date fair value for RSUs granted during the years ended December 31, 2017, 20162022, 2021 and 20152020 was $91.14, $79.77$96.14, $104.43 and $83.31,$79.58, respectively. The total fair value of RSUs vested during 2017, 2016 and 2015issued was $8$20 million, $16$27 million and $120$18 million during 2022, 2021 and 2020, respectively.

The following table summarizes RSU activity for the year ended December 31, 2017:

   Number of
Units		  Weighted
Average Grant
Date  Fair Value
(per share)		 

Thousands of units, except per share amounts

   

Outstanding at January 1, 2017

   295  $79.03 

Granted

   205   91.14 

Vested

   (95)   78.97 

Forfeited

   (28)   85.20 
  

 

 

  

 

 

 

Outstanding at December 31, 2017

   377  $85.17 
  

 

 

  

 

 

 

activity:

Number of
Units
 (in thousands)		Weighted Average
 Grant Date Fair Value
(per share)
Outstanding at January 1, 2022738 $93.43 
Granted487 96.14 
Vested(335)92.47 
Forfeited(42)95.17 
Outstanding at December 31, 2022848 $95.28 
As of December 31, 2017,2022, the unrecognized compensation cost related to RSUs was $15$39 million, which is expected to be recognized over a weighted average period of 2two years.

Stock OptionsOption Awards—Stock options are granted withallow employees the opportunity to purchase ordinary shares of stock in the future at an exercise price equal to the market price of our ordinary shares at the date of grant. The awards generally have a three-year vesting period that vests in equal increments on the first, second and third anniversary of the grant date. The awardsdate and have a contractual term of ten years, subject to customary accelerated vesting or forfeiture inyears. None of the event of certain termination events. The stockStock options are accounted fordesigned to qualify as equity awards with compensation cost recognized using the graded vesting method.

In 2015, 457,555 stock options were granted to the CEO and three other executive officers. These stock options vestIncentive Stock Options as defined in annual tranches with 10% vested after one year and an additional 15% vested after two years and the remaining vesting in equal tranches after eachSection 422 of the third, fourth, and fifth years.

Internal Revenue Code.

The fair value of each stockStock option award is estimated, based on several assumptions, on the date of grant using the Black-Scholes option valuation model. The principal assumptions utilized in valuing stockStock options include the expected stock price volatility (based on our historical stock price volatility over the expected term); the expected dividend yield; and the risk-free interest rate (an estimate based on the yield of a United States Treasury zero coupon bond with a maturity equal to the expected lifeterm of the option).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The expected term of allStock options granted is estimated based on the weighted average of historical exercise patterns and the midpoint of the remaining expected life. Prior to 2021, the expected term of Stock options granted was estimated based on a simplified approach. approach, which was consistent with the historical exercise pattern.
In 2010, when2022, our board of directors declared a special dividend of $5.20 per share to all shareholders as of June 6, 2022. Pursuant to the majority of our options were granted, we determined thatanti-dilutive provisions under the simplified method was appropriate becauseaward agreement, the Compensation Committee authorized the reduction of the lifeexercise price for all outstanding stock options in an amount equal to the special dividends per share. The reduction in exercise price of

LyondellBasell N.V. $5.20 per share for all outstanding stock options was intended to provide an equitable and its relative stage of development. Similarly, we did not possess exercise patterns similarproportionate adjustment to our situation. The option grants that have been made since 2010 have been limited in number and have occurred during periods of substantial share price volatility.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Weighted average fair valuesholders of stock options grantedas a result of the Company’s payment of the special dividend. These adjustments did not result in each respective yearincremental expense.

The weighted average fair value of Stock options granted and the assumptions used in estimating those fair values are as follows:

   2017  2016  2015 

Weighted average fair value

  $21.55  $20.39  $22.71 

Fair value assumptions:

    

Dividend yield

   4.0%  3.0-4.0%   3.0% 

Expected volatility

   34.9%-35.1%   35.3-36.0%   35.9-37.0% 

Risk-free interest rate

   2.10%-2.29%   1.14-1.93%   1.48-1.93% 

Weighted average expected term, in years

   6.0   6.0   6.0-6.7 

Year Ended December 31,
202220212020
Weighted average fair value$24.27$20.49$12.18
Fair value assumptions:
Dividend yield4.3 %5.9 %5.0 %
Expected volatility39.1-40.7%39.1-39.4%28.3-38.4%
Risk-free interest rate1.9-4.2%0.9-1.0%0.3-1.4%
Weighted average expected term, in years5.45.66.0
The following table summarizes stockStock option activity foractivity:
Number of
Shares
(in thousands)
Weighted
Average
Exercise
Price (1)
Weighted
Average
Remaining
Term		Aggregate
Intrinsic
Value
(millions of
dollars)
Outstanding at January 1, 20222,449$91.50 
Granted372 92.16 
Exercised(221)86.23 
Forfeited(2)98.40 
Expired(7)108.46 
Outstanding at December 31, 20222,591 $87.46 5.6 years$5 
Exercisable at December 31, 20221,856 $85.69 4.5 years$4 
(1) The weighted-average exercise price in the year ended December 31, 2017 fortable above has been modified to reflect the non-qualified stock options:

   Number of
Shares
(in thousands)		  Weighted
Average
Exercise
Price		   Weighted
Average
Remaining
Term		   Aggregate
Intrinsic
Value
(millions of
dollars)		 

Outstanding at January 1, 2017

   927  $74.19     

Granted

   313   92.73     

Exercised

   (134)   44.76     

Forfeited

   (45)   83.34     

Expired

   (42)   84.57     
  

 

 

  

 

 

     

Outstanding at December 31, 2017

   1,019  $82.93    7.6 years   $28 
  

 

 

  

 

 

     

 

 

 

Exercisable at December 31, 2017

   324  $78.47    6.3 years   $10 
  

 

 

  

 

 

     

 

 

 

The rangereduction of exercise prices for stock options outstanding as of December 31, 2017, 2016 and 2015 was $13.11price related to $113.03, $12.61 to $113.03 and $12.61 to $113.03, respectively.

the special dividend.

The aggregate intrinsic value of stockStock options exercised during the years ended December 31, 2017, 20162022, 2021 and 20152020 was $6 million, $7 million and $1 million, and $280 million, respectively.

As of December 31, 2017,2022, the unrecognized compensation cost related to non-qualified stockStock options was $5 million, which is expected to be recognized over a one-year period. During 2017, cash received from the exercise of stock options was $6 million. There was $2 million tax benefit associated with these exercises.

Performance Share Units (“PSUs”), Qualified Performance Awards (“QPAs”), Medium-Term Incentive Program (“MTI”)—Shares issued in satisfaction of PSU and QPA awards are granted under our LTIP. The target number of share awards is established at the beginning of a three-calendar year performance period. Each unit is equivalent to one share of our common stock. Beginning in 2017, the final number of shares payable is determined based on LyondellBasell N.V.’s Total Shareholder Return (TSR) relative to a group of peer companies, and are classified as equity awards. Compensation expense during the three-calendar year performance period is accrued on a straight- line basis. PSUs are valued using a Monte-Carlo simulation payout value on grant date. These share awards are subject to customary accelerated vesting and forfeiture in the event of certain termination events.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

PSU awards granted prior to 2017 and QPA awards are similar. The final number of shares payable related to pre-2017 PSUs and QPAs are determined at the end of the three-calendar year performance period by our Compensation Committee. Since the service-inception date precedes the grant date, these share awards are treated as a liability award until the grant date and compensation expense during the three-calendar year performance period is accrued on a straight-line basis subject to fair value adjustments. Pre-2017 PSU awards are valued based on the market price of the underlying stock on the date of payment.

Beginning January 1, 2016, the holders of PSUs are entitled to accrue dividend equivalent units. These dividend equivalent units will be converted to shares upon payment at the end of the three-year performance cycle and are classified in Accrued and Other liabilities on the Consolidated Balance Sheets. PSU dividend equivalent units on liability awards are recorded in compensation expense while PSU dividend equivalent units on equity awards are recorded in retained earnings.

The following table summarizes PSU activity for the year ended December 31, 2017:

   Number of
Units		  Weighted
Average Grant
Date Fair Value
(per share)		 

Thousands of units, except per share amounts

   

Outstanding at January 1, 2017

   —    $—   

Granted

   237   93.28 

Vested

   —     —   

Forfeited

   (13)   93.28 
  

 

 

  

 

 

 

Outstanding at December 31, 2017

   224  $93.28 
  

 

 

  

 

 

 

The number of PSUs are based on the target number of share awards. The assumptions used in the Monte Carlo simulation to estimate the fair value of PSUs granted in 2017 are as follows:

2017

Expected volatility of LyondellBasell N.V. common stock

30.98% 

Expected volatility of peer companies

16.98-39.89% 

Average correlation coefficient of peer companies

0.51

Risk-free interest rate

1.46% 

As of December 31, 2017, the unrecognized compensation cost related to PSUs and dividend equivalents assuming target payout was $27 million, which is expected to be recognized over a weighted average period of 21.4 years.

For grants made in 2013, eligible employees other than executive officers could elect to receive share-based awards (QPAs) or cash-based awards (MTI) while executive officers were only eligible for During 2022, cash received from the share-based awards (QPAs). Awards under the MTI are accounted for as a liability and classified in Other liabilities on the Consolidated Balance Sheets. We recorded compensation expense for cash MTI awardsexercise of $1Stock options was $11 million and $10 million for the years ended December 31, 2016 and 2015, respectively, based on the expected achievementtax benefit associated with these exercises was $1 million.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Performance Share Units Awards —A target number of PSUs is granted to participants at the beginning of a three-year performance period. Final payout of awards, which can range from 0% to 200% of target shares granted, is determined and paid after the performance period. These awards are settled in shares of common stock, and each unit is equivalent to one share of our common stock.
Beginning in 2021, the payout for PSUs granted will be equally based on Total Shareholder Return (“TSR”) relative to our peers and a performance metric. The fair value of the portion of the award that vests based on TSR is estimated using a Monte-Carlo simulation. For the other portion of the award, the fair value is determined at the end of each reporting period based on our stock price and the number of shares expected to vest. Prior to 2021, all our PSUs vesting was based on TSR relative to our peers, and the fair value was estimated using a Monte-Carlo simulation.
The weighted average grant date fair value for QPAs granted duringand the years ended December 31, 2016 and 2015 was $77.93 and $89.94, respectively. assumptions used in estimating those fair value using a Monte-Carlo simulation are as follows:
Year Ended December 31,
 202220212020
Weighted average fair value$122.15 $169.57 $82.70 
Fair value assumptions:
Expected volatility of LyondellBasell N.V. common stock48.71 %48.05%25.96%-41.50%
Expected volatility of peer companies23.12-61.28%24.30-59.44%16.13-50.42%
Average correlation coefficient of peer companies0.590.590.45-0.58
Risk-free interest rate1.69 %0.31%0.23-1.35%
The following table summarizes PSU activity assuming payout at 100% of target shares:
Number of
Units
 (in thousands)		Weighted Average
 Grant Date Fair Value (per share)
Outstanding at January 1, 2022754 $95.45 
Granted291 101.33 
Forfeited(274)78.06 
Outstanding at December 31, 2022771 $102.07 
The total fair value of QPAsPSUs vested during 2016 and 20152020 was $20$9 million. As of December 31, 2022, the unrecognized compensation cost related to PSUs was $28 million, and $33 million, respectively.

which is expected to be recognized over a weighted average period of two years.

Employee Stock Purchase Plan

—We have an Employee Share Purchase Plan (“ESPP”) which includes a 10% discount and a look-back provision. These provisions allowallows participants to purchase our stock at a 10% discount on the lower of the fair market value at either the beginning or end of the purchase period. As a result of the 10% discount and the look-back provision, the ESPP is considered a compensatory plan under generally accepted accounting principles.

Total expense related to our ESPP was $3 million in both 2022 and 2021 and $4 million in 2020.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
16. Income Taxes

LyondellBasell Industries N.V. is tax resident in the United Kingdom pursuant to a mutual agreement procedure determination ruling between the Dutch and United Kingdom competent authorities and therefore subject solely to the United Kingdom corporate income tax system.

Through our subsidiaries, we have substantial operations world-wide and earn significant income in the United States. Taxes are primarily paid on the earnings generated in various jurisdictions, including the United States, The Netherlands, Germany, France, Italy and other countries. LyondellBasell Industries N.V. has little or no taxable income of its own because, as a holding company, it does not conduct any operations. Instead,Through our subsidiaries, we have substantial operations world-wide. Taxes are paid on the earnings generated in various jurisdictions where our subsidiaries through which we operate, incur tax obligations in the jurisdictions in which they operate.

We monitor income tax developments in countries where we conduct business. On December 22, 2017,including primarily the U.S. enacted “H.R.1”, also known as the “Tax CutsThe Netherlands, Germany, France, and Jobs Act” (the “Tax Act”)Italy.

The Company operates in multiple jurisdictions with some provisions effective as early as 2017 while others are delayed until 2018. This change in U.S.complex legal and tax law included a reduction in the federal corporate tax rate from 35% to 21% for years beginning after 2017, which resulted in the remeasurement of our U.S. net deferred income tax liabilities. Our 2017 income tax provision includes an $819 million income tax benefit related to the remeasurement of our U.S. net deferred income tax liabilities. Although the $819 million income tax benefit represents a reasonable estimate of the impact of the Tax Act on our Consolidated Financial Statements as of December 31, 2017, it should be considered provisional. The impact of the Tax Act may differ from this reasonable estimate due to additional guidance that may be issued, changes in assumptions made,regulatory environments and the finalization of certain U.S. income tax positions with the filing of our 2017 U.S. income tax return which will allow for the ability to conclude whether any further adjustments are necessary to our deferred tax assets and liabilities. Any adjustments to these provisional amounts will be reported as a component of income tax expense in the reporting period in which any such adjustments are identified which will be no later than the fourth quarter of 2018. We will continue to analyze the Tax Act to determine the full effects of the new law.

In September 2016, the United Kingdom enacted provisions (the so called “anti-hybrid provisions”), effective for years beginning January 1, 2017, that resulted in changes to our internal financing structure which did not materially impact our Consolidated Financial Statements. In addition, in October 2016 the U.S. Treasury issued final Section 385 debt-equity regulations that may impact our internal financings in future years. Pursuant to a recent Executive Order, the Treasury Department reviewed these regulations and determined to delay but retain these regulations,is subject to further review after enactment of U.S. tax reform. There has been an increase in attention, bothtaxes in the U.S. and globally,non-U.S. jurisdictions. We monitor tax law changes and the potential impact to our results of operations. There continues to be increased attention on the tax practices of multinational companies, includingin particular in the European Union’s state aid investigationsU.S. and proposals byEurope where we operate. In 2020, the Organization for Economic Cooperation and Development with respect(“OECD”) released Pillar One and Two proposals focused on taxing rights and minimum taxes. Although certain actions have occurred, there continues to base erosionbe uncertainty as to the enactment and profit shifting. Such attention may resultimplementation of the OECD’s Pillars One and Two in additional legislativecountries where we operate. With the European Union’s approval of a Pillar 2 Directive in late December 2022, we anticipate local law enactment in 2023 effective no earlier than 2024 inclusive of non-EU countries such as the United Kingdom. While the timing and ultimate impact is still uncertain, we do not expect the impact to be material based on the principles agreed to at this stage. We continue to monitor these and other proposed tax law changes thatas they could adversely affectincrease our tax rate. Other thanliabilities in the recentlyfuture, if enacted.

On August 16, 2022, the U.S. enacted Taxthe Inflation Reduction Act Management does(“IRA”) which is intended to address climate change, lower health-care costs and reduce the federal deficit. We are continuing to analyze the provisions included in the IRA and await proposed and final regulations from the Department of the Treasury; however, we do not believe that

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recent changes in income tax laws willexpect it to have a material impact on our Consolidated Financial Statements, although new or proposed changes to tax laws could affect our tax liabilitiesStatements.

The Company considered the impact of the CARES Act, enacted March 27, 2020, in the future.

period of enactment. Several of the tax measures favorably impacted our income tax provision in 2020. Based on return filings in 2021, we recorded an overall tax benefit related to the carryback of U.S. tax net operating losses (“NOL”) of approximately $364 million cumulatively. We requested a cash refund of approximately $1.1 billion which has been received; $870 million and $231 million in 2021 and 2022, respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The significant components of the provision for (benefit from) income taxes are as follows:

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Current:

    

U.S. federal

  $543  $421  $1,009 

Non-U.S.

   595   557   468 

State

   47   51   72 
  

 

 

  

 

 

  

 

 

 

Total current

   1,185   1,029   1,549 
  

 

 

  

 

 

  

 

 

 

Deferred:

    

U.S. federal

   (637)   339   66 

Non-U.S.

   22   20   104 

State

   28   (2)   11 
  

 

 

  

 

 

  

 

 

 

Total deferred

   (587)   357   181 
  

 

 

  

 

 

  

 

 

 

Provision for income taxes before tax effects of other comprehensive income

   598   1,386   1,730 

Tax effects of elements of other comprehensive income:

    

Pension and postretirement liabilities

   29   (21)   4 

Financial derivatives

   (14)   (96)   71 

Foreign currency translation

   (33)   (7)   (5) 

Unrealized gains (losses) from available-for-sale securities

   (3)   1   (1) 
  

 

 

  

 

 

  

 

 

 

Total income tax expense in comprehensive income

  $577  $1,263  $1,799 
  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
Millions of dollars202220212020
Current:
U.S. federal$250 $669 $(774)
Non-U.S.205 617 399 
State58 75 1 
Total current513 1,361 (374)
Deferred:
U.S. federal369 (103)415 
Non-U.S.(12)(114)(76)
State12 19 (8)
Total deferred369 (198)331 
Provision for (benefit from) income taxes before tax effects of other comprehensive income882 1,163 (43)
Tax effects of elements of other comprehensive income:
Pension and post-retirement liabilities125 67 (10)
Financial derivatives57 20 (70)
Foreign currency translation59 45 (30)
Total income tax expense (benefit) in comprehensive income$1,123 $1,295 $(153)
Since the proportion of U.S. revenues, assets, operating income and associated tax provisions is significantly greater than any other single taxing jurisdiction within the worldwide group, the reconciliation of the differences between the provision for income taxes and the statutory rate is presented on the basis of the U.S. statutory federal income tax rate of 35%21% as opposed to the United Kingdom statutory rate of 20% to provide a more meaningful insight into those differences. Since the Tax Act lowered the U.S. statutory federal income tax rate to 21% for tax years beginning after 2017, the reconciliation uses the 35% rate in effect for the year ended December 31, 2017.19%. Our effective tax rate for the year ended December 31, 20172022 is 10.9%18.5%. This summary is shown below:

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

Income before income taxes:

    

U.S.

  $2,438  $2,511  $3,691 

Non-U.S.

   3,055   2,722   2,518 
  

 

 

  

 

 

  

 

 

 

Total

  $5,493 ��$5,233  $6,209 
  

 

 

  

 

 

  

 

 

 

Income tax at U.S. statutory rate

  $1,923  $1,832  $2,173 

Increase (reduction) resulting from:

    

Non-U.S. income taxed at lower statutory rates

   (164)   (159)   (130) 

Remeasurement of U.S. net deferred tax liability

   (819)   —     —   

State income taxes, net of federal benefit

   40   24   59 

Exempt income

   (385)   (349)   (319) 

U.S. manufacturing deduction

   (57)   (42)   (88) 

Other, net

   60   80   35 
  

 

 

  

 

 

  

 

 

 

Income tax provision

  $598  $1,386  $1,730 
  

 

 

  

 

 

  

 

 

 

Our effective income tax rate fluctuates based on, among other factors, changes in pre-tax income in countries with varying statutory tax rates, changes in valuation allowances, changes in foreign exchange gains/losses, the amount of exempt income, changes in unrecognized tax benefits associated with uncertain tax positions and changes in tax laws.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our 2016

The following table reconciles the expected tax expense (benefit) at the U.S. statutory federal income tax rate to the total income tax provision included a chargeas calculated:
 Year Ended December 31,
Millions of dollars202220212020
Income (loss) before income taxes:
U.S.$3,289 $3,458 $(456)
Non-U.S.1,487 3,328 1,842 
Total$4,776 $6,786 $1,386 
Income tax at U.S. statutory rate$1,003 $1,425 $291 
Increase (reduction) resulting from:
Non-U.S. income taxed at different statutory rates27 73 14 
Changes in tax laws— (6)(298)
Return to accrual adjustments16 (179)(50)
State income taxes, net of federal benefit60 82 (2)
Exempt income(213)(303)(144)
Uncertain tax positions(74)19 97 
Other, net63 52 49 
Income tax provision$882 $1,163 $(43)
Our return to accrual adjustments in 2021 primarily include the tax benefits associated with an election made in 2021 to step-up of $135 million for non-cash outcertain Italian assets to fair market value retroactively and the impact of period adjustments from prior years which is reflected in Other, netcertain retroactive elections made with respect to the CARES Act in the table above. $74 millionU.S.
Our exempt income primarily includes interest income, export incentives, and equity earnings of the charge relates to a correction for the tax effects on our cross-currency swaps with the remainder relating primarily to adjustments for deferred tax liabilities associated with somejoint ventures. Interest income earned by certain of our consolidated subsidiaries. Management concluded that these adjustments were immaterialsubsidiaries through intercompany financings is taxed at rates substantially lower than the U.S. statutory rate. Export incentives relate to tax benefits derived from elections and structures available for U.S. exports. Equity earnings attributable to the earnings of our joint ventures, when paid through dividends to certain European subsidiaries, are exempt from all periods presented.

or portions of normal statutory income tax rates. We currently anticipate the favorable treatment for interest income, dividends, and export incentives to continue in the near term; however, this treatment is based on current law, which could change.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The deferred tax effects of tax loss, credit and creditinterest carryforwards (“tax attributes”) and the tax effects of temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements, reduced by a valuation allowance where appropriate, are presented below.
 December 31,
Millions of dollars20222021
Deferred tax liabilities:
Accelerated tax depreciation$2,383 $1,838 
Investment in joint venture partnerships504 525 
Inventory194 192 
Operating lease assets373 423 
Other liabilities123 142 
Total deferred tax liabilities$3,577 $3,120 
Deferred tax assets:
Tax attributes$210 $182 
Employee benefit plans200 339 
Operating lease liabilities399 429 
Other assets133 136 
Total deferred tax assets942 1,086 
Deferred tax asset valuation allowances(66)(126)
Net deferred tax assets876 960 
Net deferred tax liabilities$2,701 $2,160 
 December 31,
Millions of dollars20222021
Balance sheet classifications:
Deferred tax assets—long-term$157 $174 
Deferred tax liabilities—long-term2,858 2,334 
Net deferred tax liabilities$2,701 $2,160 
Deferred taxes on the unremitted earnings of certain equity joint ventures and subsidiaries of $86 million and $94 million at December 31, 2022 and 2021, respectively, have been provided. The 2017Company intends to permanently reinvest approximately $550 million of our non-U.S. earnings. Repatriation of these earnings to the U.S. in the future could result in a tax impact of re-measurement of the U.S. net deferred tax liability resulting from the U.S. enactment of the Tax Act is included in the various components of deferred income taxes.

   December 31, 

Millions of dollars

  2017  2016 

Deferred tax liabilities:

   

Accelerated tax depreciation

  $1,523  $1,910 

Investment in joint venture partnerships

   214   304 

Intangible assets

   48   140 

Inventory

   266   379 

Other liabilities

   26   41 
  

 

 

  

 

 

 

Total deferred tax liabilities

   2,077   2,774 
  

 

 

  

 

 

 

Deferred tax assets:

   

Tax attributes

   196   255 

Employee benefit plans

   315   404 

Other assets

   97   72 
  

 

 

  

 

 

 

Total deferred tax assets

   608   731 

Deferred tax asset valuation allowances

   (96)   (96) 
  

 

 

  

 

 

 

Net deferred tax assets

   512   635 
  

 

 

  

 

 

 

Net deferred tax liabilities

  $1,565  $2,139 
  

 

 

  

 

 

 
   December 31, 

Millions of dollars

  2017  2016 

Balance sheet classifications:

   

Deferred tax assets—long-term

  $90  $192 

Deferred tax liability—long-term

   1,655   2,331 
  

 

 

  

 

 

 

Net deferred tax liabilities

  $1,565  $2,139 
  

 

 

  

 

 

 

approximately $60 million.

At December 31, 20172022 and 2016,2021, we had total tax attributes available in the amount of $784$1,103 million and $968$943 million, respectively, for which a deferred tax asset was recognized at December 31, 20172022 and 20162021 of $196$210 million and $255$182 million, respectively.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The scheduled expiration of the tax attributes and the related deferred tax assets, before valuation allowance, as of December 31, 20172022 are as follows:

Millions of dollars

  Tax
Attributes		   Deferred Tax
on Tax
Attributes		 

2018

  $26   $6 

2019

   35    9 

2020

   —      —   

2021

   29    2 

2022

   15    1 

Thereafter

   147    33 

Indefinite

   532    145 
  

 

 

   

 

 

 
  $784   $196 
  

 

 

   

 

 

 

Millions of dollarsTax
Attributes		Deferred Tax
on Tax
Attributes
2023$12 $1 
202439 1 
202518 1 
202613 1 
20275 1 
Thereafter336 28 
Indefinite680 177 
Total$1,103 $210 
The tax attributes are primarily related to operations in France, Canada, the United States, France, United Kingdom Spain,and The Netherlands and the United States.Netherlands. The related deferred tax assets by primary jurisdictions are shown below:

   December 31, 

Millions of dollars

  2017   2016   2015 

France

  $92   $140   $197 

Canada

   31    29    31 

United Kingdom

   17    16    17 

Spain

   32    33    38 

The Netherlands

   13    19    23 

United States

   10    16    15 

Other

   1    2    1 
  

 

 

   

 

 

   

 

 

 
  $196   $255   $322 
  

 

 

   

 

 

   

 

 

 

 December 31,
Millions of dollars202220212020
United States$84 $25 $25 
France46 26 58 
United Kingdom45 31 30 
The Netherlands13 81 103 
Spain6 — 6 
Other16 19 20 
Total$210 $182 $242 
To fully realize these net deferred tax assets, we will need to generate sufficient future taxable income in the countries where these tax attributes exist during the periods in which the attributes can be utilized. Based upon projections of future taxable income over the periods in which the attributes can be utilized and/or temporary differences can be reversed,are expected to reverse, management believes it is more likely than not that only $101$144 million of these deferred tax assets at December 31, 20172022 will be realized.

Prior to the close

As of each reporting period, management considersdate, we consider the weight of all evidence, both positive and negative, to determine if a valuation allowance is necessary for each jurisdictions’ net deferred tax assets. We place greater weight on historical evidence over future predictions of our ability to utilize net deferred tax assets. We consider future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income in prior carryback year(s) if carryback is permitted under applicable law, as well as available prudent and feasible tax planning strategies that would, if necessary, be implemented to ensure realization of the net deferred tax asset.

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A summary of the valuation allowances by primary jurisdiction is shown below, reflecting the valuation allowances for all the net deferred tax assets, including deferred tax assets for tax attributes and other temporary differences.

   December 31, 

Millions of dollars

  2017   2016   2015 

France

  $25   $22   $27 

Canada

   32    30    33 

United Kingdom

   17    16    11 

Spain

   —      —      19 

The Netherlands

   12    12    20 

United States

   10    16    14 

Other

   —      —      1 
  

 

 

   

 

 

   

 

 

 
  $96   $96   $125 
  

 

 

   

 

 

   

 

 

 

 December 31,
Millions of dollars202220212020
United Kingdom$29 $31 $30 
France22 26 26 
United States11 12 14 
The Netherlands3 55 57 
Other1 2 5 
$66 $126 $132 
During 2017, the valuation allowance decreased2022, we had some reductions in the U.S. due to the remeasurement of our U.S. net deferred income tax liability. This reduction was offset by increases in theattributes with offsetting valuation allowances of other jurisdictions due primarily to currency translation adjustments.

During 2016, we released $19 million of our valuation allowance related to Spanish net deferredwhich did not impact the effective tax assets associated with operating losses, as Spanish operations were no longer in a three-year cumulative loss position and our projections indicated and management expected the operating losses to be fully utilized within the next nine years.

During 2015, the reduction in our valuation allowances were primarily attributable to currency translation adjustments.

French tax law provides for an indefinite carryforward of tax losses; however, losses allowed in any particular year may not exceed fifty percent of taxable income. With respect to our French operations, we have a total net deferred tax asset of $62 million, against which we retain a valuation allowance of $25 million for losses that we do not expect to realize a future benefit due to limitations imposed by French tax law. The remaining portion of the net deferred tax asset of $37 million, primarily related to French tax losses, is expected to be fully realized.

We continue to maintain a full valuation allowance against the net deferred tax asset in Canada. Given our operational structure in Canada and the relevant Canadian loss utilization rules, we do not expect to realize a future benefit related to the net deferred tax asset.

Deferred taxes on the unremitted earnings of certain equity joint ventures and subsidiaries of $51 million and $47 million at December 31, 2017 and 2016, respectively, have been provided.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

rate.

Tax benefits totaling $544$271 million, $546$327 million and $521$339 million relating to uncertain tax positions which are reflected in Other liabilities, were unrecognized as of December 31, 2017, 20162022, 2021 and 2015,2020, respectively. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Balance, beginning of period

  $546   $521   $534 

Additions for tax positions of current year

   15    16    9 

Additions for tax positions of prior years

   3    11    5 

Reductions for tax positions of prior years

   (20)    (2)    (24) 

Settlements (payments/refunds)

   —      —      (3) 
  

 

 

   

 

 

   

 

 

 

Balance, end of period

  $544   $546   $521 
  

 

 

   

 

 

   

 

 

 

 Year Ended December 31,
Millions of dollars202220212020
Balance, beginning of period$327 $339 $238 
Additions for tax positions of current year22 — 1 
Additions for tax positions of prior years13 20 113 
Reductions for tax positions of prior years(91)(21)(12)
Settlements (payments/refunds)— (11)(1)
Balance, end of period$271 $327 $339 
The majority of the 2017, 2016 and 2015 balances,uncertain tax positions, if recognized, will affect the effective tax rate. We operate in multiple jurisdictions throughout the world, and our tax returns are periodically audited or subjected to review by tax authorities. We are currently under examination in a number of tax jurisdictions. As a result, there is an uncertainty in income taxes recognized in our financial statements. We may settle or appeal positionsPositions challenged by the tax authorities.authorities may be settled or appealed by us.
During 2022, we accrued a $91 million non-cash tax benefit to our effective tax rate as a reduction for tax positions of a prior year. This benefit was largely due to the expiration of certain statutes of limitations. During 2020, we accrued a $113 million non-cash tax expense to our effective tax rate as an addition for tax positions of prior years.
We are no longer subject to any significant income tax examinations by tax authorities in our principal tax jurisdiction for the years prior to 2005 in Germany, prior to 2014 in Italy and the U.S., and prior to 2019 in The Netherlands, France, and the United Kingdom. It is reasonably possible that, within the next twelve months, due to the settlement of uncertain tax positions with various tax authorities and the expiration of statutes of limitations, unrecognized tax benefits could decrease by up to approximately $110$100 million. We are no longer subject to any significant income tax examinations by tax authorities for the years prior to 2016 in the Netherlands, prior to 2013 in Italy, prior to 2010 in Germany, prior to 2009 in France, prior to 2016 in the United Kingdom, and prior to 2011 in the U.S., our principal tax jurisdictions.

We recognize interest accrued related toassociated with unrecognized tax benefits in income tax expense. Income tax expense includedincludes expenses of interest and penalties totaling $16of $1 million, $25 million and $1 million in each of the years ended December 31, 20172022, 2021 and 2016 and $5 million in the year ended December 31, 2015. 2020, respectively.
We had accrued approximately $63$41 million, $47$40 million and $31$16 million for interest and penalties as of December 31, 2017, 20162022, 2021 and 2015,2020, respectively.

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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Commitments and Contingencies

Commitments—We have various purchase commitments for materials, supplies and services incidentincidental to the ordinary conduct of business, generally for quantities required for our businesses and at prevailing market prices. These commitments are designed to assure sources of supply and are not expected to be in excess of normal requirements. AtAs of December 31, 2017,2022, we had capital expenditure commitments, which we incurred in our normal course of business, including commitments of approximately $820$71 million primarily related to building our new Hyperzone high-density polyethylenePO/TBA plant in La Porte, Texas and a world-scale PO/TBA plant on the Texas Gulf Coast. Our other capital expenditure commitments at December 31, 2017 were in the normal course of business.

Houston, Texas.

Financial Assurance Instruments—We have obtained letters of credit, performance and surety bonds and have issued financial and performance guarantees to support trade payables, potential liabilities and other obligations. Considering the frequency of claims made against the financial instruments we use to support our obligations, and the magnitude of those financial instruments in light of our current financial position, management does not expect that any claims against or draws on these instruments would have a material adverse effect on our Consolidated Financial Statements. We have not experienced any unmanageable difficultydifficulties in obtaining the required financial assurance instruments for our current operations.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Environmental Remediation—Our accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $102$127 million and $95$138 million as of December 31, 20172022 and 2016,2021, respectively. At December 31, 2017,2022, the accrued liabilities for individual sites range from less than $1 million to $19$26 million. The remediation expenditures are expected to occur over a number of years, and not to be concentrated in any single year. In our opinion, it is reasonably possible that losses in excess of the liabilities recorded may have been incurred. However, we cannot estimate any amount or range of such possible additional losses. New information about sites, new technology or future developments such as involvement in investigations by regulatory agencies, could require us to reassess our potential exposure related to environmental matters.

The following table summarizes the activity in our accrued environmental liability included in “Accrued liabilities” and “Other liabilities:”

   Year Ended December 31, 

Millions of dollars

      2017           2016     

Beginning balance

  $95   $106 

Additional provisions

   —      5 

Changes in estimates

   11    15 

Amounts paid

   (13)    (29) 

Foreign exchange effects

   9    (2) 
  

 

 

   

 

 

 

Ending balance

  $102   $95 
  

 

 

   

 

 

 

Access Indemnity Demand—In December 2010, one of our subsidiaries received demand letters from affiliates of Access Industries (collectively, “Access Entities”), a more than five percent shareholder of the Company, demanding indemnity for losses, including attorney’s fees and expenses, arising out of a pending lawsuit styledEdward S. Weisfelner, as Litigation Trustee of the LB Litigation Trust v. Leonard Blavatnik, et al., Adversary Proceeding No. 09-1375 (REG), in the United States Bankruptcy Court, Southern District of New York. In theWeisfelner lawsuit, the plaintiffs seek to recover from Access the return of all amounts earned by the Access Entities related to their purchase of shares of Lyondell Chemical Company (“Lyondell Chemical”) prior to its acquisition by Basell AF S.C.A.; distributions by Basell AF S.C.A. to its shareholders before it acquired Lyondell Chemical; and management and transaction fees and expenses. Trial of the lawsuit was held in October 2016. In April 2017, the court awarded $7.2 million to the plaintiffs and denied all other relief, and in May 2017 the court issued its Final Judgment reflecting this ruling. With prejudgment interest included, the total Final Judgment is $12.6 million. The plaintiffs filed an appeal to the Federal District Court for the Southern District of New York, which largely affirmed the Final Judgement on January 24, 2018.

The Access Entities have also demanded $100 million in management fees under a 2007 management agreement between an Access affiliate and the predecessor of LyondellBasell AF, as well as other unspecified amounts relating to advice purportedly given in connection with financing and other strategic transactions. In June 2009, an Access affiliate filed a proof of claim in Bankruptcy Court against LyondellBasell AF seeking “no less than” $723 thousand for amounts allegedly owed under the 2007 management agreement. In April 2011, Lyondell Chemical filed an objection to the claim and brought a declaratory judgment action for a determination that the demands are not valid. The declaratory judgment action is stayed pending the outcome of theWeisfelner lawsuit.

We do not believe that the 2007 management agreement is in effect or that the Company or any Company-affiliated entity owes any obligations under the management agreement, including for management fees or for indemnification. We intend to vigorously defend our position in any proceedings and against any claims or demands that may be asserted.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Although the court issued its Final Judgment inWeisfelnerin May 2017 as noted above, it remains subject to further potential appeal by the parties. Accordingly, we cannot at this time estimate whether there is a reasonably possible loss or range of loss that may be incurred.

 Year Ended December 31,
Millions of dollars20222021
Beginning balance$138 $133 
Changes in estimates5 25 
Amounts paid(12)(14)
Foreign exchange effects(4)(5)
Other— (1)
Ending balance$127 $138 
Indemnification—We are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation and dissolution of joint ventures. Pursuant to these arrangements, we provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions. These indemnification arrangements typically include provisions pertaining to third party claims relating to environmental and tax matters and various types of litigation. As of December 31, 2017,2022, we had not accrued any significant amounts for our indemnification obligations, and we are not aware of other circumstances that would likely lead to significant future indemnification obligations. We cannot determine with certainty the potential amount of future payments under the indemnification arrangements until events arise that would trigger a liability under the arrangements.

As part of our technology licensing contracts, we give indemnifications to our licensees for liabilities arising from possible patent infringement claims with respect to certain proprietary licensed technologies. Such indemnifications have a stated maximum amount and generally cover a period of five5 to ten10 years.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Legal Proceedings—We are subject to various lawsuits and claims, including but not limited to, matters involving contract disputes, environmental damages, personal injury and property damage. We vigorously defend ourselves and prosecute these matters as appropriate.
Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor legal proceedings in which we are a party. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial, mediation or other resolution. We regularly assess the adequacy of legal accruals based on our professional judgment, experience and the information available regarding our cases.
Based on a consideration of all relevant facts and circumstances, we do not believe the ultimate outcome of any currently pending lawsuit against us will have a material adverse effect upon our operations, financial condition or Consolidated Financial Statements.
18. Shareholders’ Equity

and Redeemable Non-controlling Interests

Shareholders’ Equity
Dividend Distributions—The following table summarizes the dividends paid to common shareholders in the periods presented:

Millions of dollars, except per share amounts

  Dividend Per
Ordinary
Share		   Aggregate
Dividends
Paid		   Date of Record 

For the year 2017:

      

March

  $0.85   $343    March 6, 2017 

June

   0.90    361    June 5, 2017 

September

   0.90    356    September 6, 2017 

December

   0.90    355    December 5, 2017 
  

 

 

   

 

 

   
  $3.55   $1,415   
  

 

 

   

 

 

   

For the year 2016:

      

March

  $0.78   $336    February 29, 2016 

June

   0.85    362    May 24, 2016 

September

   0.85    351    August 16, 2016 

December

   0.85    346    November 29, 2016 
  

 

 

   

 

 

   
  $3.33   $1,395   
  

 

 

   

 

 

   

presented, including the special dividend that our board of directors declared in May 2022:

Millions of dollars, except per share amountsDividend Per
Ordinary
Share		Aggregate
Dividends
Paid		Date of Record
For the year 2022:
March - Quarterly dividend$1.13 $371 March 7, 2022
June - Quarterly dividend1.19 389 June 6, 2022
June - Special dividend5.20 1,704 June 6, 2022
September - Quarterly dividend1.19 388 August 29, 2022
December - Quarterly dividend1.19 386 November 28, 2022
$9.90 $3,238 
For the year 2021:
March - Quarterly dividend$1.05 $352 March 8, 2021
June - Quarterly dividend1.13 378 June 7, 2021
September - Quarterly dividend1.13 380 August 30, 2021
December - Quarterly dividend1.13 376 November 29, 2021
$4.44 $1,486 
In addition to the dividends paid to ordinary shareholders above, in 2022 we paid $8 million of dividend equivalents to holders of RSUs, which are recognized as dividends in Retained earnings. See Note 2 to the Consolidated Financial Statements.
Share Repurchase ProgramAuthorization—In May 2017,2022, our shareholders approved a proposal to authorize us to repurchase up to an additional 10% of our outstanding34.0 million ordinary shares, through November 201827, 2023 (“May 20172022 Share Repurchase Program”Authorization”). As a result, the authorization, which superseded any prior repurchase authorizations. The timing and amount of the remaining unpurchased shares under the share repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was superseded. We completed the repurchase of shares under our share repurchase programs authorized by our shareholders in May 2015 (“May 2015 Share Repurchase Program”) and April 2014 (“April 2014 Share Repurchase Program”) in 2016 and 2015, respectively.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Thesethese repurchases, which are determined at the discretionbased on our evaluation of our Management Board,market conditions and other factors, may be executed from time to time through open market or privately negotiated transactions. The repurchased shares, which are recorded at cost, are classified as Treasury stock and may be retired or used for general corporate purposes, including for various employee benefit and compensation plans.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In May 2021, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares, through November 28, 2022 (“2021 Share Repurchase Authorization”), which superseded any prior repurchase authorizations.
In May 2020, our shareholders approved a proposal to authorize us to repurchase up to 34.0 million ordinary shares through November 29, 2021 (“2020 Share Repurchase Authorization”), which superseded our prior repurchase authorizations.
The following table summarizes our share repurchase activity for the periods presented:

Millions of dollars, except shares and per share amounts

  Shares
Repurchased		   Average
Purchase
Price		   Total
Purchase
Price,
Including
Commissions		 

For the year 2017:

      

May 2016 Share Repurchase Program

   3,501,084   $85.71   $300 

May 2017 Share Repurchase Program

   6,516,917    83.54    545 
  

 

 

   

 

 

   

 

 

 
   10,018,001   $84.30   $845 
  

 

 

   

 

 

   

 

 

 

For the year 2016:

      

May 2015 Share Repurchase Program

   15,302,707   $80.15   $1,226 

May 2016 Share Repurchase Program

   21,316,627    79.18    1,688 
  

 

 

   

 

 

   

 

 

 
   36,619,334   $79.58   $2,914 
  

 

 

   

 

 

   

 

 

 

For the year 2015:

      

April 2014 Share Repurchase Program

   19,892,101   $86.40   $1,719 

May 2015 Share Repurchase Program

   31,947,812    90.66    2,896 
  

 

 

   

 

 

   

 

 

 
   51,839,913   $89.03   $4,615 
  

 

 

   

 

 

   

 

 

 

Due to the timing of settlements, total

Millions of dollars, except shares and per share amountsShares
Repurchased		Average
Purchase
Price		Total Purchase Price, Including Commissions and Fees
For the year 2022:
2021 Share Repurchase Authorization2,111,538 $97.72 $206 
2022 Share Repurchase Authorization2,286,216 87.50 200 
4,397,754 $92.41 $406 
For the year 2021:
2021 Share Repurchase Authorization5,163,334 $92.37 $477 
5,163,334 $92.37 $477 
For the year 2020:
September 2019 Share Repurchase Authorization50,685 $78.93 $4 
2020 Share Repurchase Authorization— — — 
50,685 $78.93 $4 
Total cash paid for share repurchases for the years ended December 31, 2017, 20162022, 2021 and 20152020 was $866$420 million, $2,938$463 million and $4,656$4 million, respectively.

Cash payments made during the reporting period may differ from the total purchase price, including commissions and fees, due to the timing of payments.

Ordinary Shares—The changes in the outstanding amounts of ordinary shares are as follows:

   Year Ended December 31, 
   2017  2016  2015 

Ordinary shares outstanding:

    

Beginning balance

   404,046,331   440,150,069   486,969,402 

Share-based compensation

   371,980   418,892   4,972,908 

Warrants exercised

   4,184   200   1,989 

Employee stock purchase plan

   107,560   96,504   45,683 

Purchase of ordinary shares

   (10,018,001)   (36,619,334)   (51,839,913) 
  

 

 

  

 

 

  

 

 

 

Ending balance

   394,512,054   404,046,331   440,150,069 
  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
 202220212020
Ordinary shares outstanding:
Beginning balance329,536,389 334,015,220 333,476,883 
Share-based compensation291,104 468,131 263,786 
Employee stock purchase plan293,828 216,372 325,236 
Purchase of ordinary shares(4,397,754)(5,163,334)(50,685)
Ending balance325,723,567 329,536,389 334,015,220 
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Treasury Shares—The changes in the amounts of treasury shares held by the Company are as follows:

   Year Ended December 31, 
   2017  2016  2015 

Ordinary shares held as treasury shares:

    

Beginning balance

   174,389,139   138,285,201   91,463,729 

Share-based compensation

   (371,980)   (418,892)   (4,972,908) 

Warrants exercised

   509   —     150 

Employee stock purchase plan

   (107,560)   (96,504)   (45,683) 

Purchase of ordinary shares

   10,018,001   36,619,334   51,839,913 
  

 

 

  

 

 

  

 

 

 

Ending balance

   183,928,109   174,389,139   138,285,201 
  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
 202220212020
Ordinary shares held as treasury shares:
Beginning balance10,675,605 6,030,408 6,568,745 
Share-based compensation(291,104)(468,131)(263,786)
Employee stock purchase plan(83,324)(50,006)(325,236)
Purchase of ordinary shares4,397,754 5,163,334 50,685 
Ending balance14,698,931 10,675,605 6,030,408 
Accumulated Other Comprehensive Income (Loss)Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the years ended December 31, 2017, 20162022, 2021 and 20152020 are presented in the following table:

Millions of dollars

  Financial
Derivatives		  Net
Unrealized
Holding
Gains
(Losses) on
Investments		  Net
Unrealized
Holding
Gains
(Losses)
on Equity
Investees		   Defined
Benefit
Pension
and Other
Postretirement
Benefit Plans		  Foreign
Currency
Translation
Adjustments		  Total 

Balance—January 1, 2017

  $(75)  $1  $—     $(498)  $(939)  $(1,511) 

Other comprehensive income (loss) before reclassifications

   (323)   (6)   19    62   145   (103) 

Tax (expense) benefit before reclassifications

   86   3   —      (15)   33   107 

Amounts reclassified from accumulated other comprehensive income (loss)

   264   —     —      44   —     308 

Tax (expense) benefit

   (72)   —     —      (14)   —     (86) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Net other comprehensive income (loss)

   (45)   (3)   19    77   178   226 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance—December 31, 2017

  $(120)  $(2)  $19   $(421)  $(761)  $(1,285) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance—January 1, 2016

  $(79)  $(5)  $—     $(428)  $(926)  $(1,438) 

Other comprehensive income (loss) before reclassifications

   (29)   7   —      (184)   (27)   (233) 

Tax (expense) benefit before reclassifications

   7   (1)   —      37   7   50 

Amounts reclassified from accumulated other comprehensive income (loss)

   (63)   —     —      93   7   37 

Tax (expense) benefit

   89   —     —      (16)   —     73 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Net other comprehensive income (loss)

   4   6   —      (70)   (13)   (73) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance—December 31, 2016

  $(75)  $1  $—     $(498)  $(939)  $(1,511) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Millions of dollarsFinancial
Derivatives		Unrealized
Gains
(Losses) on Available-for-Sale Debt
Securities		Defined
Benefit
Pension
and Other
Post-retirement
Benefit Plans		Foreign
Currency
Translation
Adjustments		Total
Balance—December 31, 2019$(200)$— $(711)$(873)$(1,784)
Other comprehensive income (loss) before reclassifications(471)1 (109)77 (502)
Tax benefit before reclassifications110 — 25 30 165 
Amounts reclassified from accumulated other comprehensive loss175 — 58 — 233 
Tax expense(40)— (15)— (55)
Net other comprehensive income (loss)(226)1 (41)107 (159)
Balance—December 31, 2020$(426)$1 $(752)$(766)$(1,943)
Other comprehensive income (loss) before reclassifications$336 $(1)$214 $(110)$439 
Tax expense before reclassifications(64)— (50)(45)(159)
Amounts reclassified from accumulated other comprehensive loss(244)— 77 — (167)
Tax (expense) benefit44 — (17)— 27 
Net other comprehensive income (loss)72 (1)224 (155)140 
Balance—December 31, 2021$(354)$— $(528)$(921)$(1,803)
Other comprehensive income (loss) before reclassifications$393 $— $342 $(64)$671 
Tax expense before reclassifications(86)— (95)(59)(240)
Amounts reclassified from accumulated other comprehensive loss(128)— 128 — — 
Tax (expense) benefit29 — (29)— — 
Net other comprehensive income (loss)208 — 346 (123)431 
Balance—December 31, 2022$(146)$— $(182)$(1,044)$(1,372)

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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Millions of dollars

  Financial
Derivatives		  Net
Unrealized
Holding
Gains
(Losses) on
Investments		  Net
Unrealized
Holding
Gains
(Losses)
on Equity
Investees		   Defined
Benefit
Pension and
Other
Postretirement
Benefit Plans		  Foreign
Currency
Translation
Adjustments		  Total 

Balance—January 1, 2015

  $(80)  $—    $—     $(449)  $(497)  $(1,026) 

Other comprehensive income (loss) before reclassifications

   279   (6)   —      (8)   (434)   (169) 

Tax (expense) benefit before reclassifications

   (71)   1   —      2   5   (63) 

Amounts reclassified from accumulated other comprehensive income (loss)

   (207)   —     —      33   —     (174) 

Tax (expense) benefit

   —     —     —      (6)   —     (6) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Net other comprehensive income (loss)

   1   (5)   —      21   (429)   (412) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance—December 31, 2015

  $(79)  $(5)  $—     $(428)  $(926)  $(1,438) 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

The amounts reclassified out of each component of Accumulated other comprehensive loss are as follows:

Millions of dollars

  Year Ended
December 31,		  

Affected Line Items on

the Consolidated

Statements of Income

   
  2017   2016  2015  

Reclassification adjustments for:

      

Financial derivatives

  $264   $(63)  $(207)  Other income, net

Income tax expense (benefit)

   72    (89)   —    Provision for income taxes
  

 

 

   

 

 

  

 

 

  

Financial derivatives, net of tax

   192    26   (207)  
      

Amortization of defined pension items:

      

Prior service cost

   3    1   5  

Actuarial loss

   39    31   28  

Settlement loss

   2    61   —    

Income tax expense

   14    16   6  
  

 

 

   

 

 

  

 

 

  

Defined pension items, net of tax

   30    77   27  

Foreign currency translations adjustments

   —      7   —    Other income, net

Income tax expense (benefit)

   —      —     —    Provision for income taxes
  

 

 

   

 

 

  

 

 

  

Foreign currency translations adjustments, net of tax

   —      7   —    

Total reclassifications, before tax

   308    37   (174)  

Income tax expense (benefit)

   86    (73)   6  Provision for income taxes
  

 

 

   

 

 

  

 

 

  

Total reclassifications, after tax

  $222   $110  $(180)  Amount included in net income
  

 

 

   

 

 

  

 

 

  

Millions of dollarsYear Ended December 31,Affected Line Items on the Consolidated Statements of Income
202220212020
Reclassification adjustments for:
Financial derivatives:
Commodities$(59)$(34)$— Cost of sales
Foreign currency(75)(216)170 Interest expense
Interest rates6 6 5 Interest expense
Income tax (expense) benefit29 44 (40)Provision for income taxes
Financial derivatives, net of tax(99)(200)135 
Amortization of defined pension items:
Settlement loss103 28 6 Other (expense) income, net
Actuarial loss22 46 53 Other (expense) income, net
Prior service cost3 3 3 Other (expense) income, net
Curtailment gain— — (4)Other (expense) income, net
Income tax expense(29)(17)(15)Provision for income taxes
Defined pension items, net of tax99 60 43 
Total reclassifications, before tax— (167)233 
Income tax (expense) benefit— 27 (55)Provision for income taxes
Total reclassifications, after tax$— $(140)$178 Amount included in net income
Amortization of prior service cost and actuarial lossdefined pension items are included in the computation of net periodic pension and other postretirementpost-retirement benefit costs, (seesee Note 15).

14 to the Consolidated Financial Statements.

Redeemable Non-controlling Interests
As of December 31, 2022 and 2021, we had 113,471 and 115,374 shares of redeemable non-controlling interest stock outstanding, respectively. During the year ended December 31, 2022, 1,903 shares were redeemed for approximately $2 million. There were no share redemptions during 2021 and 2020.
In February, May, August and November 2022, we paid cash dividends of $15.00 per share to our redeemable non-controlling interest stock shareholders of record as of January 15, 2022, April 15, 2022, July 15, 2022, and October 15, 2022, respectively. In 2022, 2021 and 2020, these dividends were $7 million for each year.
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Non-Controlling Interests—In April 2017, we increased our interest in the entity that holds our equity interest in Al Waha Petrochemicals Ltd. from 83.79% to 100% by paying $21 million to exercise a call option to purchase the remaining 16.21% interest held by a third party.

20.

19. Per Share Data

Basic earnings per share areis based upon the weighted average number of shares of common stock outstanding during the periods.period. Diluted earnings per share includes the effect of certain stock options awardsoption and other equity-based compensation awards. We haveOur unvested restricted stock units thatcontain non-forfeitable rights to dividend equivalents and are considered participating securities forsecurities. We calculate basic and diluted earnings per share.

share under the two-class method.

Earnings per share data and dividends declared per shareis as follows:
 Year Ended December 31,
 202220212020
 ContinuingDiscontinuedContinuingDiscontinuedContinuingDiscontinued
Millions of dollarsOperationsOperationsOperationsOperationsOperationsOperations
Net income (loss)$3,894 $(5)$5,623 $(6)$1,429 $(2)
Dividends on redeemable non-controlling interests(7)— (7)— (7)— 
Net income attributable to participating securities(10)— (14)— (3)— 
Net income (loss) attributable to ordinary shareholders—basic and diluted$3,877 $(5)$5,602 $(6)$1,419 $(2)
Millions of shares,
except per share amounts
Basic weighted average common stock outstanding327 327 334 334 334 334 
Effect of dilutive securities1 1 — — — — 
Potential dilutive shares328 328 334 334 334 334 
Earnings (loss) per share:
Basic$11.86 $(0.02)$16.79 $(0.02)$4.25 $(0.01)
Diluted$11.83 $(0.02)$16.77 $(0.02)$4.25 $(0.01)
125
Table of common stock are as follows:

   Year Ended December 31, 
   2017  2016  2015 
   Continuing  Discontinued  Continuing  Discontinued  Continuing  Discontinued 

Millions of dollars

  Operations  Operations  Operations  Operations  Operations  Operations 

Net income (loss)

  $4,895  $(18)  $3,847  $(10)  $4,479  $(5) 

Less: net (income) loss attributable to non-controlling interests

   2   —     (1)   —     2   —   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) attributable to the Company shareholders

   4,897   (18)   3,846   (10)   4,481   (5) 

Net income attributable to participating securities

   (5)   —     (4)   —     (8)   —   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) attributable to ordinary shareholders—basic and diluted

  $4,892  $(18)  $3,842  $(10)  $4,473  $(5) 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Millions of shares,
except per share amounts

       

Basic weighted average common stock outstanding

   398   398   419   419   465   465 

Effect of dilutive securities:

       

Stock options

   1   1   —     —     —     —   

QPA and PSU awards

   —     —     1   1   1   1 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Potential dilutive shares

   399   399   420   420   466   466 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings (loss) per share:

       

Basic

  $12.28  $(0.05)  $9.17  $(0.02)  $9.63  $(0.01) 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Diluted

  $12.28  $(0.05)  $9.15  $(0.02)  $9.60  $(0.01) 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Participating securities

   0.4   0.4   0.3   0.3   0.4   0.4 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Dividends declared per share of common stock

  $3.55  $—    $3.33  $—    $3.04  $—   
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

21.

20. Segment and Related Information

Our operations are managed through five operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280,Segment Reporting. Each of the operating segments is managed by a senior executive reporting directlyexecutives who report to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the operating results of each of the operating segments for performance evaluation and resource allocation. The activities of each of our segments from which they earn revenues and incur expenses are described below:

•Olefins and Polyolefins—AmericasPolyolefins-Americas (“O&P—Americas”&P-Americas”). Our O&P—Americas&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.


•Olefins and Polyolefins—Europe,Polyolefins-Europe, Asia, International (“O&P—EAI”&P-EAI”). Our O&P—EAI&P-EAI segment produces and markets olefins and co-products, polyethylene, and polypropylene, including polypropylene compounds.

polypropylene.


•Intermediates and Derivatives (“I&D”). Our I&D segment produces and markets propylene oxide and its derivatives; oxyfuels and related products; and intermediate chemicals such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.

Refining.

•Advanced Polymer Solutions (“APS”). Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes Catalloy and polybutene-1.

•Refining. Our Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products, including gasoline and distillates.

Technology.

•Technology. Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

Our chief operating decision maker uses EBITDA as the primary measure for reviewing profitability of our segments’ profitabilitysegments, and therefore, in accordance with ASC 280,Segment Reporting, we have presented EBITDA for all segments. We define EBITDA as earnings from continuing operations before interest, income taxes, and depreciation and amortization.

Intersegment

“Other” includes intersegment eliminations and items that are not directly related or allocated to business operations, are included in “Other.”such as foreign exchange gains or losses and components of pension and other post-retirement benefit costs other than service costs. Sales between segments are made primarily at prices approximating prevailing market prices.


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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Summarized financial information concerning reportable segments is shown in the following tabletables for the periods presented:

   Year Ended December 31, 2017 
   O&P –
Americas		   O&P –
EAI		   I&D   Refining   Technology   Other  Total 

Millions of dollars

             

Sales and other operating revenues:

             

Customers

  $7,592   $12,040   $8,346   $6,165   $341   $—    $34,484 

Intersegment

   2,808    223    126    683    109    (3,949)   —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 
   10,400    12,263    8,472    6,848    450    (3,949)   34,484 

Depreciation and amortization expense

   439    239    279    177    40    —     1,174 

Other income (expense), net

   40    138    1    2    —      (2)   179 

Income from equity investments

   42    271    8    —      —      —     321 

Capital expenditures

   753    206    332    213    32    11   1,547 

EBITDA

   2,982    2,282    1,490    157    223    —     7,134 

 Year Ended December 31, 2022
 O&P -
Americas		O&P -
EAI		I&DAPSRefiningTechnologyOtherTotal
Millions of dollars
Sales and other operating revenues:
Customers$8,928 $12,030 $12,703 $5,227 $10,975 $588 $— $50,451 
Intersegment5,007 793 247 4 918 105 (7,074)— 
13,935 12,823 12,950 5,231 11,893 693 (7,074)50,451 
Depreciation and amortization expense582 166 332 109 39 39 — 1,267 
Other (expense) income, net(28)— (39)2 (7)(4)4 (72)
Income (loss) from equity investments98 (68)(25)— — — — 5 
EBITDA2,734 112 1,872 312 921 366 (16)6,301 
Capital expenditures375 344 940 73 53 98 7 1,890 
 Year Ended December 31, 2021
Millions of dollarsO&P -
Americas		O&P -
EAI		I&DAPSRefiningTechnologyOtherTotal
Sales and other operating revenues:
Customers$10,502 $12,685 $9,968 $5,133 $7,178 $707 $— $46,173 
Intersegment4,500 805 212 12 824 136 (6,489)— 
15,002 13,490 10,180 5,145 8,002 843 (6,489)46,173 
Depreciation and amortization expense578 197 379 117 79 43 — 1,393 
Other income (expense), net28 11 (2)7 (7)— 25 62 
Income (loss) from equity investments115 313 34 (1)— — — 461 
EBITDA5,273 1,749 1,378 409 (624)514 (10)8,689 
Capital expenditures319 249 1,112 85 74 91 29 1,959 
 Year Ended December 31, 2020
Millions of dollarsO&P -
Americas		O&P -
EAI		I&DAPSRefiningTechnologyOtherTotal
Sales and other operating revenues:
Customers$5,032 $7,809 $6,144 $3,903 $4,346 $519 $— $27,753 
Intersegment2,243 558 125 10 381 140 (3,457)— 
7,275 8,367 6,269 3,913 4,727 659 (3,457)27,753 
Depreciation and amortization expense525 214 305 152 152 37 — 1,385 
Other income (expense), net70 14 1 1 1 — (2)85 
Income (loss) from equity investments45 186 26 (1)— — — 256 
EBITDA1,810 826 833 378 (871)324 (15)3,285 
Capital expenditures543 166 880 63 63 111 121 1,947 
127
Table of Contents
LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

   Year Ended December 31, 2016 

Millions of dollars

  O&P –
Americas		   O&P –
EAI		   I&D   Refining   Technology   Other  Total 

Sales and other operating revenues:

             

Customers

  $6,757   $10,404   $7,085   $4,559   $378   $—    $29,183 

Intersegment

   2,320    175    141    576    101    (3,313)   —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 
   9,077    10,579    7,226    5,135    479    (3,313)   29,183 

Depreciation and amortization expense

   362    229    269    163    41    —     1,064 

Other income (expense), net

   63    42    —      8    —      (2)   111 

Income from equity investments

   59    302    6    —      —      —     367 

Capital expenditures

   1,376    261    333    224    36    13   2,243 

EBITDA

   2,877    2,067    1,333    72    262    (9)   6,602 

   Year Ended December 31, 2015 

Millions of dollars

  O&P –
Americas		   O&P –
EAI		   I&D   Refining   Technology   Other  Total 

Sales and other operating revenues:

             

Customers

  $7,344   $11,371   $7,596   $6,059   $365   $—    $32,735 

Intersegment

   2,620    205    176    498    100    (3,599)   —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 
   9,964    11,576    7,772    6,557    465    (3,599)   32,735 

Depreciation and amortization expense

   353    219    233    196    46    —     1,047 

Other income (expense), net

   10    14    4    2    —      (5)   25 

Income from equity investments

   42    283    14    —      —      —     339 

Capital expenditures

   668    186    441    108    24    13   1,440 

EBITDA

   3,661    1,825    1,475    342    243    (13)   7,533 

In 2017, our O&P—Americas results include a $31 million gain on the first quarter sale of our Lake Charles, Louisiana site. EBITDA for our O&P—EAI segment includes a $108 million gain on the sale of our 27% interest in Geosel and also includes a $21 million non-cash gain stemming from the elimination of an obligation associated with a lease.

In 2016, operating results for our O&P—Americas segment includes a non-cash, LCM inventory valuation charge of $29 million due mainly to the drop in polypropylene prices. Our O&P—Americas and O&P—EAI segments’ results benefited from gains of $57 million and $21 million, respectively, related to the 2016 sale of our wholly owned subsidiary, Petroken Petroquimica Ensenada S.A.

In 2015, operating results for the O&P—Americas, O&P—EAI, I&D and Refining segments included non-cash charges of $160 million, $30 million, $181 million and $177 million, respectively, related to LCM inventory valuation adjustments. Declines in the prices of ethylene, propylene and other products correlated with crude oil were the primary drivers of the LCM inventory valuation adjustment for the O&P—Americas segment while the LCM inventory valuation adjustment recognized by our O&P—EAI segment is mainly related to polyolefins. Declines in the prices of various chemicals, notably benzene and ETBE, within our I&D segment’s inventory pools led to the LCM inventory valuation adjustment recognized by the I&D segment in 2015. The LCM inventory valuation adjustment recognized by the Refining segment in 2015 was driven primarily by declines in the price of crude oil.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of EBITDA to Income from continuing operations before income taxes is shown in the following table for each of the periods presented:

   Year Ended December 31, 

Millions of dollars

  2017  2016  2015 

EBITDA:

    

Total segment EBITDA

  $7,134  $6,611  $7,546 

Other EBITDA

   —     (9)   (13) 

Less:

    

Depreciation and amortization expense

   (1,174)   (1,064)   (1,047) 

Interest expense

   (491)   (322)   (310) 

Add:

    

Interest income

   24   17   33 
  

 

 

  

 

 

  

 

 

 

Income from continuing operations before income taxes

  $5,493  $5,233  $6,209 
  

 

 

  

 

 

  

 

 

 

 Year Ended December 31,
Millions of dollars202220212020
EBITDA:
Total segment EBITDA$6,317 $8,699 $3,300 
Other EBITDA(16)(10)(15)
Less:
Depreciation and amortization expense(1,267)(1,393)(1,385)
Interest expense(287)(519)(526)
Add:
Interest income29 9 12 
Income from continuing operations before income taxes$4,776 $6,786 $1,386 
The following assets are summarized and reconciled to consolidated totals in the following table:

Millions of dollars

  O&P –
Americas		   O&P –
EAI		   I&D   Refining   Technology   Other   Total 

December 31, 2017

              

Property, plant and equipment, net

  $5,092   $2,077   $2,457   $1,130   $241   $—     $10,997 

Investment in PO joint ventures

   —      —      420    —      —      —      420 

Equity investments

   187    1,366    82    —      —      —      1,635 

Goodwill

   162    162    237    —      9    —      570 

December 31, 2016

              

Property, plant and equipment, net

  $4,688   $1,881   $2,288   $1,067   $213   $—     $10,137 

Investment in PO joint ventures

   —      —      415    —      —      —      415 

Equity investments

   164    1,332    79    —      —      —      1,575 

Goodwill

   162    139    219    —      8    —      528 

The following geographic data for revenues are based upon the location of the customer and for long-lived assets, the location of the assets:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues:

      

United States

  $16,618   $13,962   $16,101 

Germany

   2,746    2,474    2,697 

Italy

   1,352    1,203    1,349 

France

   1,306    1,055    1,201 

Mexico

   1,504    1,026    951 

The Netherlands

   1,069    727    856 

Other

   9,889    8,736    9,580 
  

 

 

   

 

 

   

 

 

 

Total

  $34,484   $29,183   $32,735 
  

 

 

   

 

 

   

 

 

 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

   Year Ended December 31, 

Millions of dollars

      2017           2016     

Long-lived assets:

    

United States

  $8,761   $8,230 

Germany

   1,417    1,276 

The Netherlands

   779    657 

France

   551    530 

Italy

   329    309 

Mexico

   198    175 

Other

   1,585    1,500 
  

 

 

   

 

 

 

Total

  $13,620   $12,677 
  

 

 

   

 

 

 

Millions of dollarsO&P -
Americas		O&P -
EAI		I&DAPSRefiningTechnologyTotal
December 31, 2022
Property, plant and equipment, net$6,283 $1,818 $5,728 $793 $255 $510 $15,387 
Equity investments2,053 1,655 585 2 — — 4,295 
Goodwill162 86 201 1,370 — 8 1,827 
December 31, 2021
Property, plant and equipment, net$6,398 $1,782 $5,118 $811 $— $447 $14,556 
Equity investments2,122 1,983 679 2 — — 4,786 
Goodwill162 109 225 1,371 — 8 1,875 
Long-lived assets include Property, plant and equipment, net, Intangible assets, net and Equity investments, and Investments in PO joint ventures (seesee Notes 7 and 8 and 9).

Revenues by key product are summarized into the following table:

   Year Ended December 31, 

Millions of dollars

  2017   2016   2015 

Sales and other operating revenues:

      

Olefins & co-products

  $4,304   $3,215   $3,446 

Polyethylene

   7,368    6,903    7,536 

Polypropylene

   7,824    6,917    7,616 

PO & derivatives

   2,204    1,852    2,149 

Oxyfuels and related products

   3,022    2,676    2,906 

Intermediate chemicals

   3,051    2,483    2,541 

Refined products

   6,165    4,559    6,059 

Other

   546    578    482 
  

 

 

   

 

 

   

 

 

 

Total

  $34,484   $29,183   $32,735 
  

 

 

   

 

 

   

 

 

 

22. Unaudited Quarterly Results

Consolidated Financial Statements. The following table presents selected financiallong-lived assets data foris based upon the quarterly periods in 2017 and 2016:

   For the Quarter Ended 

Millions of dollars, except per share amounts

  March 31  June 30  September 30  December 31 

2017

     

Sales and other operating revenues

  $8,430  $8,403  $8,516  $9,135 

Gross profit(a)

   1,439   1,802   1,577   1,607 

Operating income(b)

   1,210   1,577   1,332   1,341 

Income from equity investments

   81   78   81   81 

Income from continuing operations(b) (c)

   805   1,134   1,058   1,898 

Loss from discontinued operations, net of tax

   (8)   (4)   (2)   (4) 

Net income(b) (c)

   797   1,130   1,056   1,894 

Earnings per share:

     

Basic

   1.98   2.82   2.67   4.80 

Diluted

   1.98   2.81   2.67   4.79 

location of the assets:

 December 31,
Millions of dollars20222021
Long-lived assets:
United States$14,651 $13,955 
Germany1,443 1,460 
The Netherlands903 887 
France740 676 
China503 799 
Italy304 300 
Mexico284 306 
Other1,516 1,654 
Total$20,344 $20,037 
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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

   For the Quarter Ended 

Millions of dollars, except per share amounts

  March 31   June 30  September 30  December 31 

2016

      

Sales and other operating revenues

  $6,743   $7,328  $7,365  $7,747 

Gross profit(a)

   1,577    1,626   1,462   1,327 

Operating income(b)

   1,360    1,403   1,249   1,048 

Income from equity investments

   91    117   81   78 

Income from continuing operations(b)

   1,030    1,092   955   770 

Loss from discontinued operations, net of tax

   —      (1)   (2)   (7) 

Net income(b)

   1,030    1,091   953   763 

Earnings per share:

      

Basic

   2.38    2.57   2.30   1.87 

Diluted

   2.37    2.56   2.30   1.87 

(a)Represents Sales and other operating revenues less Cost of sales.
(b)The three months ended March 31, 2017 includes a gain of $31 million ($20 million after tax) on the sale of our Lake Charles, Louisiana site currently used as a logistic terminal. The three months ended June 30, 2017 includes a $21 million non-cash gain ($14 million after tax) stemming from the elimination of an obligation associated with a lease. The three months ended September 30, 2017 includes a $108 million gain ($103 million after tax) on the sale of our 27% interest in Geosel.

The three months ended March 31, 2016 included charges

Disposition—In the second quarter of $40 million related2022 we sold our ownership interest in our polypropylene manufacturing facility located in Geelong, Australia, LyondellBasell Australia (Holdings) Pty Ltd, for consideration of $38 million. In connection with this sale, we assessed the assets of the disposal group for impairment and determined that the carrying value exceeded the fair value less costs to out-of-period adjustments for deferred tax liabilities associated with some of our subsidiaries. We alsosell. As a result, we recognized a pretax LCM inventory valuationnon-cash impairment charge of $68 million ($47 million after tax) in the three months ended March 31, 2016, which was reversed in the three months ended June 30, 2016. The three months ended March 31, 2016 also included a pretax and after-tax gain of $78 million on the sale of our wholly owned Argentine subsidiary.

The three months ended June 30, 2016 included charges of $21 million related to out-of-period adjustments for deferred tax liabilities associated with some of our subsidiaries.

The three months ended December 31, 2016 included a charge of $61 million for out-of-period tax corrections related to tax effects on our cross-currency swaps, a pretax LCM inventory valuation charge of $29 million ($18 million after tax) and a pension settlement charge of $58 million ($37 million after tax). For additional information related to these adjustments, see Note 21.

(c)The three months ended March 31, 2017 includes total charges to interest expense of $113 million ($106 million after tax) related to the redemption of $1,000 million aggregate principal amount of our outstanding 5% senior notes due 2019. The three months ended December 31, 2017 includes an $819 million non-cash tax benefit related to the lower federal income tax rate resulting from the newly enacted U.S. Tax Act.

23. Subsequent Events

On February 15, 2018, we reached a definitive agreement to acquire A. Schulman, a global supplier of high-performance plastic compounds, composites and powders. The acquisition builds upon our already existing platform in this space to create a premier Advanced Polymer Solutions business with broad geographic reach, leading technologies and a diverse product portfolio. Under the terms of the agreement, we will acquire A. Schulman for total consideration of $2.25 billion. We will purchase 100 percent of A. Schulman common stock for $42 per share and one contingent value right per share, and assume outstanding debt and certain other obligations. The contingent value rights generally will provide a holder with an opportunity to receive certain net

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

proceeds, if any are recovered, from certain ongoing litigation and government investigations relating to A. Schulman’s Citadel and Lucent acquisitions.

The proposed acquisition, which has been unanimously approved by the respective boards of LyondellBasell N.V. and A. Schulman, is subject to customary closing conditions, including regulatory approvals and approval by A. Schulman shareholders. The acquisition is expected to close in the second halfquarter of 2018.2022 of $69 million in the operating results of our O&P-EAI segment. The fair value measurement for the disposal group is based on expected consideration and classified as Level 3 within the fair value hierarchy. The charge is reflected as Impairments in our Consolidated Statements of Income.

Exit of Houston Refinery Operations—In April 2022 we announced our decision to cease operation of our Houston refinery no later than the end of 2023 after determining that exiting the refining business is our best strategic and financial path forward. Our exit from the refining business progresses our greenhouse gas emission reduction goals, and the site’s prime location gives us more options for advancing our future strategic objectives, including circularity. In the interim, we will continue serving the fuels market.
During 2022, in connection with the planned exit from the refinery business, we expensed accelerated lease amortization costs of $91 million, personnel costs of $64 million, asset retirement cost depreciation of $30 million, and asset retirement obligation accretion of $2 million. In subsequent periods, we expect to incur additional costs primarily consisting of accelerated amortization of operating lease assets of $150 million to $250 million, personnel costs of $50 million to $80 million and other charges of $50 million to $100 million. Additionally, we estimate that the Houston refinery’s asset retirement obligations are in the range of $150 million to $450 million. As of December 31, 2022, we recorded asset retirement obligations of $249 million representing our best estimate. The asset retirement obligations we recorded require significant judgment and are subject to changes in the underlying assumptions. We intend to proceed with an orderly shut-down and do not expect to recognize these charges all at once, but rather over time. We do not anticipate any material cash payments related to the exit of the refinery business to be made in 2023.
Operating results for our Refining segment include non-cash impairment charges of $624 million and $582 million recognized in 2021 and 2020, respectively. See Note 7 to the Consolidated Financial Statements for additional information regarding impairment charges.
Subsequent Events—In the fourth quarter of 2022 we embarked on a journey to transform the APS segment. Our goal is to sharpen our focus on customer service and product development to maximize value for our customers and LyondellBasell. With increased autonomy and accountability, we are using cash-on-handdeveloping a more agile operating model with meaningful regional and segment growth strategies. As part of this transformation, effective January 1, 2023, our Catalloy and polybutene-1 products will be moved from our APS segment and reintegrated into our O&P-Americas and O&P-EAI segments. This move will allow the APS team to financefocus on our compounding business. Also, effective January 1, 2023, the acquisition.

Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

APS reporting unit’s goodwill has been reallocated between the APS, O&P-Americas and O&P-EAI segments based on their relative fair values.

As a result of the change noted above, we are evaluating goodwill for impairment immediately before and after the transfer of our Catalloy and polybutene-1 businesses. As of December 31, 2022, goodwill included in our APS reporting unit was $1,370 million, the majority of which is related to the 2018 acquisition of A. Schulman.
As of December 31, 2022, a large portion of the APS reporting unit’s fair value was derived from our Catalloy and polybutene-1 products, which had disproportionately low carrying values in comparison to the remaining assets of the reporting unit, which had relatively higher carrying values due to the 2018 purchase price allocation associated with the acquisition of A. Schulman. As a result of the reallocation of goodwill among reporting units we expect to recognize a non-cash goodwill impairment charge in our APS segment of approximately $250 million to $300 million in the first quarter of 2023. Estimates of fair values were determined through the use of a discounted cash flow model, market comparisons and internal assumptions including revenue growth rates and discount rates, which are inherently subjective.
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Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.

Item 9A.Controls and Procedures.

Item 9A.     Controls and Procedures.
Effectiveness of Controls and Procedures

Our management, with the participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer) has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to management (including the principal executive and financial officers) as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officers have concluded that such disclosure controls and procedures were effective as of December 31, 2017,2022, the end of the period covered by this Annual Report on Form 10-K.

Management’s Report on Internal Control over Financial Reporting

Management’s report on our internal control over financial reporting can be found in Item 8,Financial Statements and Supplementary Data,of this report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) of the Act, in our fourth fiscal quarter of 20172022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.Other Information.

Item 9B.     Other Information.
None.

Item 9C.     Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.



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PART III

Item 10.Directors, Executive Officers and Corporate Governance.

Item 10.     Directors, Executive Officers and Corporate Governance.
We have a Code of Conduct for all employees and directors, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. We also have a Financial Code of Ethics specifically for our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. We have posted copies of these codes on the “Corporate Governance” section of our website at www.lyb.comwww.LyondellBasell.com (within the Investor Relations section). Any waivers of the codes must be approved, in advance, by our Supervisory Board.Board of Directors. Any amendments to, or waivers from, the codes that apply to our executive officers and directors will be posted on the “Corporate Governance” section of our website.

Information regarding our executive officers is reported under the caption “Executive Officers of the Registrant”“Information about our Executive Officers” in Part I of this report, which is incorporated herein by reference.

All other information required by this Item will be included in our Proxy Statement relating to our 20182023 Annual General Meeting of Shareholders and is incorporated herein by reference.*

Item 11.Executive Compensation.

Item 11.     Executive Compensation.
All information required by this Item will be included in our Proxy Statement relating to our 20182023 Annual General Meeting of Shareholders and is incorporated herein by reference.*

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
All information required by this Item will be included in our Proxy Statement relating to our 20182023 Annual General Meeting of Shareholders and is incorporated herein by reference.*

Item 13.Certain Relationships and Related Transactions, and Director Independence.

Item 13.     Certain Relationships and Related Transactions, and Director Independence.
All information required by this Item will be included in our Proxy Statement relating to our 20182023 Annual General Meeting of Shareholders and is incorporated herein by reference.*

Item 14.Principal Accounting Fees and Services.

Item 14.Principal Accounting Fees and Services.
All information required by this Item will be included in our Proxy Statement relating to our 20182023 Annual General Meeting of Shareholders and is incorporated herein by reference.*

*
*Except for information or data specifically incorporated herein by reference under Items 10 through 14, other information and data appearing in our 20182023 Proxy Statement are not deemed to be a part of this Annual Report on Form 10-K or deemed to be filed with the Commission as a part of this report.


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PART IV

Item 15.Exhibits, Financial Statement Schedules.

Item 15.Exhibits, Financial Statement Schedules.
(a) (1) Consolidated Financial Statements:

The financial statements and supplementary information listed in the Index to Financial Statements, which appears on page 61, are filed as part of this annual report.

included in Item 8.

(a) (2) Consolidated Financial Statement Schedules:

Schedules are omitted because they either are not required or are not applicable or because equivalent information has been included in the financial statements, the notes thereto or elsewhere herein.

(b)     Exhibits:

Exhibit

Number

Exhibit
Number

Description

    2.13
    34.1
    4.14.2
    4.24.3
    4.34.4
    4.44.5
    4.5First Supplemental Indenture, dated as of December  10, 2015, to Indenture dated as of November  14, 2011, between the Company and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on December 14, 2015)
    4.6Indenture relating to 5% Senior Notes due 2019 and 5.75%5.750% Senior Notes due 2024, among LyondellBasell Industries N.V., as issuer, each of the Guarantors named therein, as guarantors, Wells Fargo Bank, National Association, as trustee, registrar and paying agent, dated as of April 9, 2012 (including form of 5.000% Senior Note due 2019 and form of 5.750% Senior Note due 2024) (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed with the SEC on April 10, 2012)
    4.74.6

Exhibit

Number

4.7

Description

    4.8

4.8

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Table of Contents
Exhibit
Number
Description
4.9
4.10
    4.94.11
4.12
4.13
Officer’s Certificate of LYB International Finance B.V. relating to the 5.250% Guaranteed Notes due 2043, dated as of July 16, 2013 (incorporated by reference to Exhibit 4.3 to our Form 8-K filed with the SEC on July 16, 2013)
4.14
Form of LYB International Finance B.V.’s 5.250% Guaranteed Notes due 2043 (incorporated by reference to Exhibit 4.3 to our Form 8-K filed with the SEC on July 16, 2013)
4.15
Officer’s Certificate of LYB International Finance B.V. relating to the 4.875% Guaranteed Notes due 2044, dated as of February 28, 2014 (incorporated by reference to Exhibit 4.2 to our Form 8-K filed with the SEC on February 28. 2014)
4.16
Form of LYB International Finance B.V.’s 4.875% Guaranteed Notes due 2044 (incorporated by reference to Exhibit 4.2 to our Form 8-K filed with the SEC on February 28. 2014)
4.17
    4.104.18
    4.11Form of LYB International Finance II B.V.’s 1.875%3.500% Guaranteed Notes due 2022 (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed with the SEC on March 2, 2016 and included in Exhibit 4.2 thereto)
    4.12Officer’s Certificate of LYB International Finance II B.V. relating to the Notes,2027, dated as of March 2, 2017 (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on March 2, 2017)
    4.134.19
    10.1+4.20
4.21
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Table of Contents
Exhibit
Number
Description
4.22
4.23
4.24
4.25
4.26
4.27
4.28
4.29
4.30
4.31
4.32
4.33
4.34
10.1+
    10.2+10.2+
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Table of Contents
Exhibit
Number
Description
    10.3+Employment Agreement dated November  6, 2015, between Basell Service Company, B.V. and Thomas Aebischer (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on November 9, 2015).
    10.4+10.3+
    10.5+Employment Agreement by and among Kevin Brown, Lyondell Chemical Company and LyondellBasell AFGP, dated as10.6 of March 19, 2010 (incorporated by reference to Exhibit 10.4 to our Form 10 filed with the SEC on April 28, 2010)
    10.6+First Amendment to Employment Agreement by and among Kevin Brown, Lyondell Chemical Company and LyondellBasell Industries N.V., dated as of January 22, 2015 (incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K filed with the SEC on February 17, 2015)20, 2020)
    10.7+10.4+
    10.8+10.5+
10.6+
10.7+
10.8+
10.9+*
10.10+

Exhibit

Number

10.11+

Description

    10.9+

    10.10+10.12+
    10.11+10.13+
10.14+
    10.12+Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K filed with the SEC on February 12, 2013)21, 2019)
    10.13+10.15+
10.16+
10.17+
10.18+

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Table of Contents
Exhibit
Number
Description
10.19+
    10.14+10.20+
    10.15+10.21+
    10.1610.22+*
10.23+*
10.24+*
10.25+
10.26+
10.27
    10.17Amendment No. 1 to the Amended and Restated Credit Agreement, dated June  3, 2016, among LyondellBasell Industries N.V. and LYB Americas Finance Company, as Borrowers, the Lenders, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Citibank, N.A. and Deutsche Bank Securities Inc., as Syndication Agents and the other parties thereto (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on June 6, 2016)
    10.1810.28Consent Agreement, dated June 3, 2016, among LyondellBasell Industries N.V. and LYB Americas Finance Company, as Borrowers, Bank of America, N.A., as Administrative Agent and the lender parties thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on June 6, 2016)
    10.19
    10.2010.29

Exhibit

Number

10.30

Description

    10.21

10.31

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Table of Contents
Exhibit
Number
Description
10.32
10.33
10.34
    10.22Master Receivables Purchase Agreement (as amended and restated on April 23,2013) among Basell Sales and Marketing Company B.V., Lyondell Chemie Nederland B.V., Basell Polyolefins Collections Limited, Citicorp Trustee Company Limited and Citibank, N.A., London Branch (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on April 29, 2013)
    10.2321*Consent Agreement, dated June 5, 2015, among LyondellBasell Industries N.V. and LYB Americas Finance Company, as Borrowers, Bank of America, N.A., as Administrative Agent and the lender parties thereto (incorporated by reference to Exhibit 10 to our Current Report on Form 8-K filed with the SEC on June 9, 2015)
    10.24LyondellBasell Industries 2017 Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on February 23, 2017)
    10.25Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on February 23, 2017)
    10.26Form of Performance Share Unit Agreement (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on February 23, 2017)
    10.27Form of Non-Qualified  Stock Option Agreement (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on February 23, 2017)
    10.28Corporate Governance Guidelines (incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K filed with the SEC on February 23, 2017)
    10.29Rules of the Supervisory Board (incorporated by reference to Exhibit 10.6 to our Current Report on Form 8-K filed with the SEC on February 23, 2017)
    10.30Consent Agreement, dated June  5, 2017, among LyondellBasell Industries N.V. and LYB Americas Finance Company LLC, as Borrowers, Bank of America, N.A., as Administrative Agent and the lender parties thereto (incorporated by reference to Exhibit 10 to our Current Report on Form 8-K filed with the SEC on June 7, 2017)
    10.31Form of the Contingent Value Rights Agreement, among A. Schulman, Inc., LyondellBasell Industries N.V., members of the committee and a paying agent to be specified (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC February 15, 2018)
    12.1*Computation of Ratio of Earnings to Fixed Charges
    21*
    23*23*
    31.1*31.1*
    31.2*31.2*

Exhibit

Number

32*

Description

    32*

101.INS*101.INS*XBRL Instance Document
101.SCH*101.SCH*XBRL Schema Document
101.CAL*101.CAL*XBRL Calculation Linkbase Document
101.DEF*101.DEF*XBRL Definition Linkbase Document
101.LAB*101.LAB*XBRL Labels Linkbase Document
101.PRE*101.PRE*XBRL Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

+
+Management contract or compensatory plan, contract or arrangementarrangement.
*Filed herewith.
*Filed herewith.

Item 16.Form 10-K Summary.

Item 16.Form 10-K Summary.
None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



LYONDELLBASELL INDUSTRIES N.V.
LYONDELLBASELL INDUSTRIES N.V.
Date: February 22, 2018/S/    BHAVESH V. PATEL        
Name:Bhavesh V. Patel
Title:Chairman of the Management Board

Signature

Date:		February 23, 2023

Title

/s/Peter Vanacker

Name:Peter Vanacker
Title:Chief Executive Officer




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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SignatureTitleDate

/S/    BHAVESH V. PATEL        

Bhavesh V. Patel

s/    PETER VANACKER

Chief Executive Officer and

Chairman of the Management

Board (Principal Director

February 23, 2023
Peter Vanacker
(Principal Executive Officer)

Officer)
February 22, 2018

/S/    THOMAS AEBISCHER        

Thomas Aebischer

s/    MICHAEL C. MCMURRAY

Executive Vice President and

February 23, 2023
 Michael C. McMurrayChief Financial Officer

(Principal Financial Officer)

Officer)
February 22, 2018

/S/    JACQUES AIGRAIN        

Jacques Aigrain

s/ CHUKWUEMEKA A. OYOLU		Senior Vice President,DirectorFebruary 23, 2023
Chukwuemeka A. OyoluChief Accounting Officer & Investor RelationsFebruary 22, 2018
(Principal Accounting Officer)

/S/    LINCOLN BENET        

Lincoln Benet

s/    JACQUES AIGRAIN		Chair of the BoardDirectorFebruary 23, 2023
 Jacques Aigrainand DirectorFebruary 22, 2018

/S/    JAGJEET S. BINDRA        

Jagjeet S. Bindra

s/    LINCOLN BENET		DirectorDirectorFebruary 23, 2023
  Lincoln BenetFebruary 22, 2018

/S/    ROBIN BUCHANAN        

Robin Buchanan

s/    JAGJEET S. BINDRA		DirectorDirectorFebruary 23, 2023
Jagjeet S. BindraFebruary 22, 2018

/S/    STEPHEN F. COOPER        

Stephen F. Cooper

s/    ROBIN W.T. BUCHANAN		DirectorDirectorFebruary 23, 2023
 Robin W.T. BuchananFebruary 22, 2018

/S/    NANCE K. DICCIANI        

Nance K. Dicciani

s/ ANTHONY R. CHASE		DirectorDirectorFebruary 23, 2023
Anthony R. ChaseFebruary 22, 2018

/S/    CLAIRE S. FARLEY        

Claire S. Farley

s/    NANCE K. DICCIANI		DirectorDirectorFebruary 23, 2023
Nance K. DiccianiFebruary 22, 2018

/S/    BELLA D. GOREN        

Bella D. Goren

s/ ROBERT W. DUDLEY		DirectorDirectorFebruary 23, 2023
Robert W. DudleyFebruary 22, 2018

/S/    ROBERT G. GWIN        

Robert G. Gwin

s/    CLAIRE S. FARLEY		Director

Chairman of the Supervisory

Board and Director

February 23, 2023
Claire S. FarleyFebruary 22, 2018

/S/    BRUCE A. SMITH        

Bruce A. Smith

s/ MICHAEL S. HANLEY		DirectorDirectorFebruary 23, 2023
Michael S. HanleyFebruary 22, 2018

/S/    RUDY M.J.VANDER MEER        

Rudy M.J. van der Meer

s/ VIRGINIA A. KAMSKY		DirectorDirectorFebruary 23, 2023
Virginia A. Kamsky
/s/    ALBERT J. MANIFOLDDirectorFebruary 22, 201823, 2023
Albert J. Manifold

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