(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||
March 31, 2021
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
|
| |||
|
|
| ||
(Addresses of registrant’s principal executive offices)
| Netherlands | 98-0646235 | ||||||||||||||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||||||||||||||
| 1221 McKinney St., | 4th Floor, One Vine Street | ||||||||||||||||||||||||||||||||||
| Suite 300 | London | Delftseplein 27E | |||||||||||||||||||||||||||||||||
| Houston, | Texas | W1J0AH | 3013AA | Rotterdam | |||||||||||||||||||||||||||||||
| USA | 77010 | United Kingdom | Netherlands | ||||||||||||||||||||||||||||||||
| (713) | 309-7200 | +44 (0) | 207 | 220 2600 | +31 (0) | 10 | 2755 500 | ||||||||||||||||||||||||||||||||||||||||||||||
| Title of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||||||||||||
| Ordinary Shares, €0.04 Par Value | LYB | New York Stock Exchange | ||||||||||||
| Large accelerated filer | x | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ | |||||||||||||
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐
| Page | ||||||||
Millions of dollars, except earnings per share Sales and other operating revenues: Trade Related parties Operating costs and expenses: Cost of sales Selling, general and administrative expenses Research and development expenses Operating income Interest expense Interest income Other income, net Income from continuing operations before equity investments and income taxes Income from equity investments Income from continuing operations before income taxes Provision for income taxes Income from continuing operations Loss from discontinued operations, net of tax Net income Net (income) loss attributable to non-controlling interests Net income attributable to the Company shareholders Earnings per share: Net income (loss) attributable to the Company shareholders — Basic: Continuing operations Discontinued operations Diluted: Continuing operations Discontinued operations Millions of dollars Net income Other comprehensive income (loss), net of tax – Financial derivatives: Loss on cash flow hedges arising during the period Reclassification adjustment included in net income Income tax benefit Financial derivatives, net of tax Unrealized gains (losses) on available-for-sale securities: Unrealized holding gains (losses) arising during the period Income tax benefit Unrealized gains (losses) on available-for-sale securities, net of tax Unrealized gains on available-for-sale securities held by equity investees: Unrealized holding gains arising during the period Income tax expense (benefit) Unrealized gains on available-for-sale securities held by equity investees, net of tax Defined pension and other postretirement benefit plans: Reclassification adjustment for amortization of prior service cost included in net income Reclassification adjustment for net actuarial loss included in net income Income tax expense Defined pension and other postretirement benefit plans, net of tax Foreign currency translation adjustments: Unrealized gains arising during the period Reclassification adjustment included in net income Income tax benefit Foreign currency translation adjustments, net of tax Total other comprehensive income (loss) Comprehensive income Comprehensive (income) loss attributable to non-controlling interests Comprehensive income attributable to the Company shareholders Millions of dollars ASSETS Current assets: Cash and cash equivalents Restricted cash Short-term investments Accounts receivable: Trade, net Related parties Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment at cost Less: Accumulated depreciation Property, plant and equipment, net Investments and long-term receivables: Investment in PO joint ventures Equity investments Other investments and long-term receivables Goodwill Intangible assets, net Other assets Total assets Millions of dollars, except shares and par value data LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt Short-term debt Accounts payable: Trade Related parties Accrued liabilities Total current liabilities Long-term debt Other liabilities Deferred income taxes Commitments and contingencies Stockholders’ equity: Ordinary shares, €0.04 par value, 1,275 million shares authorized, 394,458,141 and 404,046,331 shares outstanding, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 183,982,022 and 174,389,139 ordinary shares, respectively Total Company share of stockholders’ equity Non-controlling interests Total equity Total liabilities and equity Millions of dollars Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Amortization of debt-related costs Charges related to repayment of debt Equity investments – Equity income Distributions of earnings, net of tax Deferred income taxes Gain on sales of business and equity method investments Gain on sale of assets Changes in assets and liabilities that provided (used) cash: Accounts receivable Inventories Accounts payable Other, net Net cash provided by operating activities Cash flows from investing activities: Expenditures for property, plant and equipment Proceeds from disposal of assets Payments for repurchase agreements Proceeds from repurchase agreements Purchases of available-for-sale securities Proceeds from maturities of available-for-sale securities Purchases of held-to-maturity securities Proceeds from maturities of held-to-maturity securities Purchases of business, equity method investment and non-controlling interest Net proceeds from sale of business and equity method investments Proceeds from settlement of net investment hedges Payments for settlement of net investment hedges Other, net Net cash used in investing activities Millions of dollars Cash flows from financing activities: Repurchases of Company ordinary shares Dividends paid Issuance of long-term debt Repayment of long-term debt Debt extinguishment costs Net proceeds from (repayments of) commercial paper Payments of debt issuance costs Other, net Net cash used in financing activities Effect of exchange rate changes on cash Increase (decrease) in cash and cash equivalents and restricted cash Cash and cash equivalents and restricted cash at beginning of period Cash and cash equivalents and restricted cash at end of period SHAREHOLDERS’ EQUITY Ordinary Shares Millions of dollars Balance, December 31, 2016 Net income (loss) Other comprehensive income Share-based compensation Dividends ($2.65 per share) Repurchases of Company ordinary shares Purchase of non-controlling interest Balance, September 30, 2017 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 2020. customer: 2020. Millions of dollars Finished goods Work-in-process Raw materials and supplies Total inventories Millions of dollars Senior Notes due 2019, $2,000 million, 5.0% ($3 million of debt issuance cost) Senior Notes due 2021, $1,000 million, 6.0% ($8 million of debt issuance cost) Senior Notes due 2024, $1,000 million, 5.75% ($8 million of debt issuance cost) Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost) Guaranteed Notes due 2044, $1,000 million, 4.875% ($11 million of discount; $10 million of debt issuance cost) Guaranteed Notes due 2043, $750 million, 5.25% ($21 million of discount; $7 million of debt issuance cost) Guaranteed Notes due 2023, $750 million, 4.0% ($6 million of discount; $4 million of debt issuance cost) Guaranteed Notes due 2027, $300 million, 8.1% Guaranteed Notes due 2022, €750 million, 1.875% ($3 million of discount; $3 million of debt issuance cost) Guaranteed Notes due 2027, $1,000 million, 3.5% ($10 million of discount; $8 million of debt issuance cost) Other Total Less current maturities Long-term debt Millions of dollars Senior Notes due 2019, 5.0% Senior Notes due 2021, 6.0% Guaranteed Notes due 2027, 3.5% Millions of dollars $2,500 million Senior Revolving Credit Facility $900 million U.S. Receivables Securitization Facility Commercial paper Precious metal financings Other Total short-term debt At March 31, 2021, we had 0 borrowings or letters of credit outstanding and $2,005 million of unused availability under this facility. At . Millions of dollars Assets– Derivatives designated as hedges: Commodities Commodities Foreign currency Foreign currency Interest rates Interest rates Derivatives not designated as hedges: Commodities Foreign currency Non-derivatives: Available-for-sale securities Total Millions of dollars Liabilities– Derivatives designated as hedges: Commodities Commodities Foreign currency Foreign currency Interest rates Derivatives not designated as hedges: Commodities Foreign currency Non-derivatives: Performance share awards Performance share awards Total All other financial instruments in the table above, including equity securities as of December 31, 2020, are classified as Level 2. We present the gross assets and liabilities of our derivative financial instruments on the Consolidated Balance Sheets. in May 2021. Millions of dollars Non-derivatives: Assets: Short-term loans receivable Liabilities: Short-term debt Long-term debt Total Current liabilities for which the carrying value approximates fair value are excluded from the table below. 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 of long-term debt exclude commercial paper and other miscellaneous debt. All financial instruments in the table hedge. Millions of dollars Foreign currency Interest rates Commodities Consolidated Statements of Cash Flows. Millions of dollars Derivatives designated as hedges: Commodities Foreign currency Interest rates Derivatives not designated as hedges: Commodities Commodities Foreign currency Non-derivatives designated as hedges: Long-term debt Total March 31, 2021 and 2020 were gains of $4 million and less than $1 million, respectively. Millions of dollars Derivatives designated as hedges: Commodities Foreign currency Interest rates Derivatives not designated as hedges: Commodities Commodities Foreign currency Non-derivatives designated as hedges: Long-term debt Total Millions of dollars Available-for-sale securities: Commercial paper Bonds Certificates of deposit Time deposits Limited partnership investments Total available-for-sale securities Millions of dollars Available-for-sale securities: Commercial paper Bonds Certificates of deposit Limited partnership investments Total available-for-sale securities Held-to-maturity securities: Time deposits 2020. Millions of dollars Proceeds from maturities of securities Proceeds from sales of securities Millions of dollars Available-for-sale securities: Limited partnership investments Millions of dollars Available-for-sale securities: Limited partnership investments Millions of dollars Service cost Interest cost Expected return on plan assets Actuarial and investment loss amortization Net periodic benefit costs Millions of dollars Service cost Interest cost Expected return on plan assets Actuarial and investment loss amortization Net periodic benefit costs Millions of dollars Service cost Interest cost Net periodic benefit costs Millions of dollars Service cost Interest cost Actuarial loss amortization Net periodic benefit costs Millions of dollars Beginning balance Additional provision Changes in estimates Amounts paid Foreign exchange effects Ending balance Millions of dollars, except per share amounts March June September Millions of dollars, except shares and per share amounts May 2016 Share Repurchase Program May 2017 Share Repurchase Program Millions of dollars, except shares and per share amounts May 2015 Share Repurchase Program May 2016 Share Repurchase Program record on March 8, 2021. Ordinary shares outstanding: Beginning balance Share-based compensation Warrants expired or exercised Employee stock purchase plan Repurchase of ordinary shares Ending balance Ordinary shares held as treasury shares: Beginning balance Share-based compensation Warrants exercised Employee stock purchase plan Repurchase of ordinary shares Ending balance Millions of dollars Balance – January 1, 2017 Other comprehensive income (loss) before reclassifications Amounts reclassified from Accumulated other comprehensive loss Net other comprehensive income (loss) Balance – September 30, 2017 Balance – January 1, 2016 Other comprehensive income (loss) before reclassifications Amounts reclassified from Accumulated other comprehensive loss Net other comprehensive income (loss) Balance – September 30, 2016 tables: Millions of dollars Reclassification adjustments for: Financial derivatives Defined pension and other postretirement benefit plan items: Amortization of: Prior service cost Actuarial loss Foreign currency translation adjustments Reclassifications, before tax Income tax expense Amounts reclassified out of Accumulated other comprehensive loss Millions of dollars Net income (loss) Less: net (income) loss attributable to non-controlling interests Net income (loss) attributable to the Company shareholders Net income attributable to participating securities Net income (loss) attributable to ordinary shareholders – basic and diluted Millions of shares, except per share amounts Basic weighted average common stock outstanding Effect of dilutive securities: PSU awards Potential dilutive shares Earnings (loss) per share: Basic Diluted Millions of shares Participating securities Dividends declared per share of common stock Millions of dollars Net income (loss) Less: net (income) loss attributable to non-controlling interests Net income (loss) attributable to the Company shareholders Net income attributable to participating securities Net income (loss) attributable to ordinary shareholders – basic and diluted Millions of shares, except per share amounts Basic weighted average common stock outstanding Effect of dilutive securities: PSU awards Potential dilutive shares Earnings (loss) per share: Basic Diluted Millions of shares Participating securities Dividends declared per share of common stock Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars Sales and other operating revenues: Customers Intersegment Income from equity investments EBITDA Millions of dollars EBITDA: Total segment EBITDA Other EBITDA Less: Depreciation and amortization expense Interest expense Add: Interest income Income from continuing operations before income taxes Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 8,312 $ 7,191 $ 24,775 $ 20,879 204 174 574 557 8,516 7,365 25,349 21,436 6,939 5,903 20,531 16,771 218 188 622 580 27 25 77 73 7,184 6,116 21,230 17,424 1,332 1,249 4,119 4,012 (94 ) (72 ) (396 ) (237 ) 5 4 15 13 114 19 173 104 1,357 1,200 3,911 3,892 81 81 240 289 1,438 1,281 4,151 4,181 380 326 1,154 1,104 1,058 955 2,997 3,077 (2 ) (2 ) (14 ) (3 ) 1,056 953 2,983 3,074 1 (1 ) 2 (1 ) $ 1,057 $ 952 $ 2,985 $ 3,073 $ 2.67 $ 2.31 $ 7.49 $ 7.26 — (0.01 ) (0.03 ) (0.01 ) $ 2.67 $ 2.30 $ 7.46 $ 7.25 $ 2.67 $ 2.31 $ 7.49 $ 7.24 — (0.01 ) (0.03 ) (0.01 ) $ 2.67 $ 2.30 $ 7.46 $ 7.23 Three Months Ended
March 31,Millions of dollars, except earnings per share 2021 2020 Sales and other operating revenues: Trade $ 8,851 $ 7,303 Related parties 231 191 9,082 7,494 Operating costs and expenses: Cost of sales 7,678 6,868 Selling, general and administrative expenses 287 295 Research and development expenses 29 27 7,994 7,190 Operating income 1,088 304 Interest expense (110) (89) Interest income 2 3 Other income, net 25 0 Income from continuing operations before equity investments and income taxes 1,005 218 Income from equity investments 137 0 Income from continuing operations before income taxes 1,142 218 Provision for income taxes 70 75 Income from continuing operations 1,072 143 (Loss) income from discontinued operations, net of tax (2) 1 Net income 1,070 144 Dividends on redeemable non-controlling interests (2) (2) Net income attributable to the Company shareholders $ 1,068 $ 142 Earnings per share: Net income (loss) attributable to the Company shareholders — Basic: Continuing operations $ 3.20 $ 0.42 Discontinued operations (0.01) 0 $ 3.19 $ 0.42 Diluted: Continuing operations $ 3.19 $ 0.42 Discontinued operations (0.01) 0 $ 3.18 $ 0.42 Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 1,056 $ 953 $ 2,983 $ 3,074 (100 ) (69 ) (260 ) (258 ) 74 5 232 52 (5 ) (16 ) (8 ) (57 ) (21 ) (48 ) (20 ) (149 ) 2 (3 ) (7 ) (9 ) — (2 ) (2 ) (2 ) 2 (1 ) (5 ) (7 ) 5 — 14 — — — — — 5 — 14 — — 1 — 1 10 8 29 23 3 4 9 9 7 5 20 15 11 17 112 73 — 7 — 7 (12 ) — (31 ) (7 ) 23 24 143 87 16 (20 ) 152 (54 ) 1,072 933 3,135 3,020 1 (1 ) 2 (1 ) $ 1,073 $ 932 $ 3,137 $ 3,019 Three Months Ended
March 31,Millions of dollars 2021 2020 Net income $ 1,070 $ 144 Other comprehensive income (loss), net of tax – Financial derivatives 175 (338) Unrealized losses on available-for-sale debt securities 0 (2) Defined benefit pension and other postretirement benefit plans 11 10 Foreign currency translations (107) (199) Total other comprehensive income (loss), net of tax 79 (529) Comprehensive income (loss) 1,149 (385) Dividends on redeemable non-controlling interests (2) (2) Comprehensive income (loss) attributable to the Company shareholders $ 1,147 $ (387) September 30,
2017 December 31,
2016 $ 1,204 $ 875 7 3 1,295 1,147 3,097 2,716 178 126 4,177 3,809 1,104 923 11,062 9,599 16,039 14,635 (5,302 ) (4,498 ) 10,737 10,137 428 415 1,644 1,575 19 20 570 528 480 550 303 618 $ 25,243 $ 23,442 Millions of dollars March 31, 2021 December 31, 2020 ASSETS Current assets: Cash and cash equivalents $ 1,452 $ 1,763 Restricted cash 11 2 Short-term investments 383 702 Accounts receivable: Trade, net 3,796 3,291 Related parties 165 150 Inventories 4,632 4,344 Prepaid expenses and other current assets 1,525 1,382 Total current assets 11,964 11,634 Operating lease assets 1,466 1,492 Property, plant and equipment, at cost 21,631 21,484 Less: Accumulated depreciation (7,241) (7,098) Property, plant and equipment, net 14,390 14,386 Equity investments 4,794 4,729 Goodwill 1,904 1,953 Intangible assets, net 717 751 Other assets 511 458 Total assets $ 35,746 $ 35,403 September 30,
2017 December 31,
2016 $ 3 $ 2 381 594 2,138 2,028 597 501 1,493 1,415 4,612 4,540 8,531 8,385 2,326 2,113 2,447 2,331 31 31 10,201 10,191 14,207 12,282 (1,359 ) (1,511 ) (15,754 ) (14,945 ) 7,326 6,048 1 25 7,327 6,073 $ 25,243 $ 23,442 Millions of dollars, except shares and par value data March 31, 2021 December 31, 2020 LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY Current liabilities: Current maturities of long-term debt $ 958 $ 8 Short-term debt 682 663 Accounts payable: Trade 2,703 2,398 Related parties 579 550 Accrued liabilities 1,953 1,883 Total current liabilities 6,875 5,502 Long-term debt 13,785 15,286 Operating lease liabilities 1,199 1,222 Other liabilities 2,554 2,957 Deferred income taxes 2,403 2,332 Commitments and contingencies 0 0 Redeemable non-controlling interests 116 116 Shareholders’ equity: 19 19 Additional paid-in capital 5,993 5,986 Retained earnings 5,158 4,440 Accumulated other comprehensive loss (1,864) (1,943) Treasury stock, at cost, 5,732,488 and 6,030,408 ordinary shares, respectively (506) (531) Total Company share of shareholders’ equity 8,800 7,971 Non-controlling interests 14 17 Total equity 8,814 7,988 Total liabilities, redeemable non-controlling interests and equity $ 35,746 $ 35,403 Nine Months Ended
September 30, 2017 2016 $ 2,983 $ 3,074 876 791 12 12 49 — (240 ) (289 ) 190 249 217 307 (108 ) (84 ) (31 ) (5 ) (278 ) (323 ) (219 ) 23 121 74 152 64 3,724 3,893 (1,146 ) (1,676 ) 29 — (512 ) (500 ) 381 603 (653 ) (607 ) 499 665 — (76 ) 75 — (21 ) (65 ) 155 209 609 1,295 (658 ) (1,356 ) (12 ) (22 ) (1,254 ) (1,530 ) Three Months Ended
March 31,Millions of dollars 2021 2020 Cash flows from operating activities: Net income $ 1,070 $ 144 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 335 342 Amortization of debt-related costs 5 4 Share-based compensation 19 16 Inventory valuation charges 0 419 Equity investments— Equity income (137) 0 Distributions of earnings, net of tax 20 15 Deferred income tax (benefit) provision (83) 68 Changes in assets and liabilities that provided (used) cash: Accounts receivable (593) 4 Inventories (360) 121 Accounts payable 327 (235) Other, net (32) (356) Net cash provided by operating activities 571 542 Cash flows from investing activities: Expenditures for property, plant and equipment (340) (660) Proceeds from maturities of available-for-sale debt securities 74 0 Proceeds from equity securities 226 1 Other, net (19) (4) Net cash used in investing activities (59) (663) Cash flows from financing activities: Repurchases of Company ordinary shares 0 (4) Dividends paid - common stock (352) (351) Purchase of non-controlling interest 0 (30) Issuance of long-term debt 0 500 Repayments of long-term debt (500) 0 Issuance of short-term debt 0 500 Net proceeds from commercial paper 0 516 Collateral received from (paid for) interest rate derivatives 66 (238) Other, net 4 (9) Net cash (used in) provided by financing activities (782) 884 Effect of exchange rate changes on cash (32) (18) (Decrease) increase in cash and cash equivalents and restricted cash (302) 745 Cash and cash equivalents and restricted cash at beginning of period 1,765 888 Cash and cash equivalents and restricted cash at end of period $ 1,463 $ 1,633 CASH FLOWS Nine Months Ended
September 30, 2017 2016 (866 ) (2,501 ) (1,060 ) (1,049 ) 990 812 (1,000 ) — (65 ) — (178 ) 177 (8 ) (5 ) (4 ) (1 ) (2,191 ) (2,567 ) 54 17 333 (187 ) 878 931 $ 1,211 $ 744 Ordinary Shares Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossCompany
Share of
Shareholders’
EquityNon-
Controlling
InterestsMillions of dollars Issued Treasury Balance, December 31, 2020 $ 19 $ (531) $ 5,986 $ 4,440 $ (1,943) $ 7,971 $ 17 Net income 0 0 0 1,070 0 1,070 0 Other comprehensive income 0 0 0 0 79 79 0 Share-based compensation 0 25 7 2 0 34 0 Dividends - common stock ($1.05 per share) 0 0 0 (352) 0 (352) 0 Dividends - redeemable non-controlling interests ($15.00 per share) 0 0 0 (2) 0 (2) 0 Sale of non-controlling interest 0 0 0 0 0 0 (3) Balance, March 31, 2021 $ 19 $ (506) $ 5,993 $ 5,158 $ (1,864) $ 8,800 $ 14 Ordinary Shares Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
LossCompany
Share of
Shareholders’
EquityNon-
Controlling
InterestsMillions of dollars Issued Treasury Balance, December 31, 2019 $ 19 $ (580) $ 5,954 $ 4,435 $ (1,784) $ 8,044 $ 19 Net income 0 0 0 144 0 144 0 Other comprehensive loss 0 0 0 0 (529) (529) 0 Share-based compensation 0 25 (11) 1 0 15 0 Dividends - common stock ($1.05 per share) 0 0 0 (351) 0 (351) 0 Dividends - redeemable non-controlling interests ($15.00 per share) 0 0 0 (2) 0 (2) 0 Repurchases of Company ordinary shares 0 (4) 0 0 0 (4) 0 Purchase of non-controlling interest 0 0 7 0 0 7 0 Balance, March 31, 2020 $ 19 $ (559) $ 5,950 $ 4,227 $ (2,313) $ 7,324 $ 19 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Company
Share of
Stockholders’
Equity Non-
Controlling
Interests Issued Treasury $ 31 $ (14,945 ) $ 10,191 $ 12,282 $ (1,511 ) $ 6,048 $ 25 — — — 2,985 — 2,985 (2 ) — — — — 152 152 — — 36 9 — — 45 — — — — (1,060 ) — (1,060 ) — — (845 ) — — — (845 ) — — — 1 — — 1 (22 ) $ 31 $ (15,754 ) $ 10,201 $ 14,207 $ (1,359 ) $ 7,326 $ 1 See Notes to the Consolidated Financial Statements.LYONDELLBASELL INDUSTRIES N.V. Page 9 9 12 12 13 16 24 25 26 27 31 33 Page 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. , 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 (collectively “LyondellBasell(“LyondellBasell N.V.”),. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell N.V. are unaudited and have been prepared from the books and records of LyondellBasell N.V. in accordance with the instructions to Form 10-Q and Rule 10-110-01 of Regulation S-X for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. In our opinion, all adjustments, consisting only ofincluding normal recurring adjustments, considered necessary for a fair presentationstatement have been included. The results for interim periods are not necessarily indicative of results for the entire year. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2.Accounting and Reporting ChangesIntangibles-Goodwill and Other—In January 2017,Standard Description This guidance clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 and includes scope considerations for entities that hold certain non-derivative forward contracts and purchased options to acquire equity securities that, upon settlement of the forward contract or exercise of the purchase option, would be accounted for under the equity method of accounting. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.
The prospective adoption of this guidance from January 1, 2021 did not have a material impact on our Consolidated Financial Statements.Standard Description Accounting Standards Update (“ASU”) 2017-04,Intangibles—Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairmentto simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the 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 toyet adopted that reporting unit. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The early adoption of this amendment in the first quarter of 2017 did notcould have a material impact on our Consolidated Financial Statements.Inventories—In July 2015,FASB issued ASU 2015-11,Inventory (Topic 330): Simplifying the Measurement of Inventory. Under this new guidance, entities that measure inventory using any method other than last-in, first-out or the retail inventory method will be required to measure inventorycontract liability balance at the lower of cost and net realizable value. The amendments in this ASU, which should be applied prospectively, are effective for annual and interim periods beginning after December 15, 2016. The adoption of this amendment in the first quarter of 2017 did not have a material impact on our Consolidated Financial Statements.Compensation—In March 2016, the FASB issued ASU 2016-09,Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classificationperiod, was immaterial.awards as either equity or liabilities, and classification on the statementRevenues—The following table presents our revenues disaggregated by key products:Three Months Ended
March 31,Millions of dollars 2021 2020 Sales and other operating revenues: Olefins and co-products $ 1,091 $ 667 Polyethylene 2,153 1,459 Polypropylene 1,718 1,101 Propylene oxide and derivatives 502 464 Oxyfuels and related products 607 707 Intermediate chemicals 578 544 Compounding and solutions 1,038 912 Advanced polymers 231 181 Refined products 993 1,336 Other 171 123 Total $ 9,082 $ 7,494 STATEMENTS—STATEMENTS-(Continued)reduce diversity in practice inclassification of certain transactions in the statement 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 public entities for annual and interim periods beginning after December 15, 2017, with early adoption permitted. Early adoptionlocation of the amendments in this guidance in 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 aspects of the amendment did not have a material impact on our Consolidated Statements 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 September 30, 2017Revenue 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 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. Retrospective and modified retrospective application is allowed.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 in the new revenue standard 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 the new revenue guidance primarily in the areas of collectability, noncash consideration, presentation of sales tax, and transition. The FASB also issued ASU 2016-20 Technical 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. Management is currently assessing the effects of applying the new standard and has preliminarily determined that there will not be a material impact on our Consolidated Financial Statements. We expect to use the modified retrospective transition method. We will complete any required changes to our systems and processes, including updating our internal controls, during the fourth quarter of 2017.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 new guidance to have a material impact on our Consolidated Financial Statements.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)Leases—In February 2016, the FASB issued ASU 2016-02,Leases (Topic 842), which supersedes the existing guidance for lease accounting in ASC 840,Leases. Under the new guidance, for leases with a term longer than 12 months a lessee should recognize a liability for lease payments (the 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 leases 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 annual 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 an extensive review of numerous existing lease contracts and other purchase obligations that contain embedded lease features, all of which are classified as operating leases under the existing guidance.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 reasonable use of historical experience, current conditions and forecasts that affect the collectability of reported financial assets. 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 public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact of the amendment in this guidance 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. The ASU is aimed at reducing complexity in accounting standards. 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 pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new guidance will be effective for public entities for annual periods beginning after December 15, 2017. We are currently assessing the impact of this new guidance 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 with the objective of adding guidance to assist entities with 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 new 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 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.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. The amendments 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 new 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 public entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. We do not expect the adoption of this new 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 new 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 effectiveness. Overall, it is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The amendments will be effective for public entities 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 new guidance to have a material impact on our Consolidated Financial Statements.3.Accounts ReceivableThree Months Ended
March 31,Millions of dollars 2021 2020 Sales and other operating revenues: United States $ 4,086 $ 3,187 Germany 765 641 China 560 243 Italy 378 335 France 290 270 Poland 270 224 The Netherlands 270 212 Mexico 247 380 Japan 230 335 Other 1,986 1,667 Total $ 9,082 $ 7,494 allowance for doubtful accounts receivable which isare reflected in the Consolidated Balance Sheets as a reductionnet of accounts receivable, totaled $17 million and $16allowance for credit losses of $15 million at September 30, 2017March 31, 2021 and December 31, 2016, respectively.4.Inventories September 30,
2017 December 31,
2016 $ 2,705 $ 2,575 188 154 1,284 1,080 $ 4,177 $ 3,809 Millions of dollars March 31, 2021 December 31, 2020 Finished goods $ 2,733 $ 2,816 Work-in-process 184 144 Raw materials and supplies 1,715 1,384 Total inventories $ 4,632 $ 4,344 long-term debt, net of unamortized discount and debt issuance cost, consisted of the following: September 30, December 31, 2017 2016 $ 959 $ 1,906 990 988 992 991 973 972 979 979 722 721 740 739 300 300 880 785 992 — 7 6 8,534 8,387 (3 ) (2 ) $ 8,531 $ 8,385 Gains (losses) related to fairMillions of dollars March 31, 2021 December 31, 2020 Senior Notes due 2024, $1,000 million, 5.75% ($4 million of debt issuance cost) $ 996 $ 996 Senior Notes due 2055, $1,000 million, 4.625% ($15 million of discount; $11 million of debt issuance cost) 974 974 Term Loan due 2022, $4,000 million ($1 million of debt issuance cost) 949 1,448 Guaranteed Notes due 2023, $750 million, 4.0% ($3 million of discount; $1 million of debt issuance cost) 746 745 Guaranteed Floating Rate Notes due 2023, $650 million ($3 million of debt issuance cost) 647 646 Guaranteed Notes due 2025, $500 million, 2.875% ($4 million of debt issuance cost) 496 496 Guaranteed Notes due 2025, $500 million, 1.25% ($1 million of discount; $4 million of debt issuance cost) 495 495 Guaranteed Notes due 2026, €500 million, 0.875% ($2 million of discount; $3 million of debt issuance cost) 583 608 Guaranteed Notes due 2027, $1,000 million, 3.5% ($7 million of discount; $5 million of debt issuance cost) 1,086 1,090 Guaranteed Notes due 2027, $300 million, 8.1% 300 300 Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of discount; $4 million of debt issuance cost) 495 495 Guaranteed Notes due 2030, $500 million, 2.25% ($4 million of discount; $4 million of debt issuance cost) 492 492 Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $4 million of debt issuance cost) 577 602 Guaranteed Notes due 2040, $750 million, 3.375% ($2 million of discount; $8 million of debt issuance cost) 740 740 Guaranteed Notes due 2043, $750 million, 5.25% ($20 million of discount; $7 million of debt issuance cost) 723 723 Guaranteed Notes due 2044, $1,000 million, 4.875% ($10 million of discount; $9 million of debt issuance cost) 981 981 Guaranteed Notes due 2049, $1,000 million, 4.2% ($15 million of discount; $10 million of debt issuance cost) 975 975 Guaranteed Notes due 2050, $1,000 million, 4.2% ($6 million of discount; $10 million of debt issuance cost) 984 984 Guaranteed Notes due 2051, $1,000 million, 3.625% ($3 million of discount; $11 million of debt issuance cost) 986 986 Guaranteed Notes due 2060, $500 million, 3.8% ($4 million of discount; $6 million of debt issuance cost) 490 490 Other 28 28 Total 14,743 15,294 Less current maturities (958) (8) Long-term debt $ 13,785 $ 15,286 Cumulative Three Months Ended Nine Months Ended Year Ended Amount Inception September 30, September 30, December 31, Since Year 2017 2016 2017 2016 2016 Inception 2014 $ (4 ) $ 26 $ (46 ) $ 11 $ 42 $ 38 2016 2 — (1 ) — 3 2 2017 — — (10 ) — — (10 ) These fair Gains (Losses) Cumulative Fair Value
Hedging Adjustments Included
in Carrying Amount of DebtInception
YearThree Months Ended
March 31,March 31, December 31, Millions of dollars 2021 2020 2021 2020 Senior Notes due 2021, 6.0% 2016 $ 0 $ (16) $ 0 $ 0 Guaranteed Notes due 2027, 3.5% 2017 4 (80) (98) (102) Guaranteed Notes due 2022, 1.875% 2018 0 1 0 0 Guaranteed Notes due 2026, 0.875% 2020 1 0 (1) (2) Total $ 5 $ (95) $ (99) $ (104) LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)short-term debt consisted of the following: September 30, December 31, 2017 2016 $ — $ — — — 317 500 59 90 5 4 $ 381 $ 594 Millions of dollars March 31, 2021 December 31, 2020 U.S. Receivables Facility $ 0 $ 0 Commercial paper 500 500 Precious metal financings 162 140 Other 20 23 Total Short-term debt $ 682 $ 663 Guaranteed Notes due 2027—In March 2017, LYB International Finance II B.V. (“LYB Finance II”), 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 3.5% guaranteed notes due 2027 at a discounted price of 98.968%.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 II’s existing and future unsecured indebtedness and to 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 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 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 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.Senior Notes due 2019—In March 2017, we redeemed $1,000 million aggregate principal amount of our outstanding 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.Short-Term DebtIn June 2017, the term of ourOur $2,500 million revolving credit facility was extended for one year toSenior Revolving Credit Facility, of which $2,440 million expires in June 2023 and the remainder expires in June 2022, pursuant to a consent agreement. The revolving credit facility may be used for dollar and euro denominated borrowings,borrowings. The facility has a $500 million sublimitsub-limit 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, including amounts outstanding under our commercial paper program, and letters of credit under this facility may not exceed $2,500 million at any given time. Borrowings under the facility bear interest at either a Base Ratebase rate or LIBOR rate, plus an applicable margin. Additional fees are incurred for the average daily unused commitments.STATEMENTS—STATEMENTS-(Continued)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 fiscal 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 September 30, 2017. At September 30, 2017, we had $317 million of outstanding commercial paper, no outstanding letters of credit and no outstanding borrowings under this 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 $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. Interest rates on the commercial paper outstanding at September 30, 2017 are based on the term of the notes and range from 141 to 155 basis points.Securitization Facility—Our $900 million U.S. accounts receivable securitization facility,Receivables Facility, which expires in 2018,July 2021, 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 inWe pay variable interest rates on our secured borrowings. Additional fees are incurred for the pool of trade receivables to financial institutions participating in the facility. In the event of liquidation, the bankruptcy-remote subsidiary’s assets will be used to satisfy the claims of its creditors prior to any assets or value in the bankruptcy-remote subsidiary becoming available to us. We are responsible for servicing the receivables.average daily unused commitments. This facility also provides for the issuance of letters of credit up to $200 million. The termWe plan on extendingthe securitizationthis facility may be extendedprior to its maturity in July 2021 in accordance with the terms of the agreement. The facility is also subject to customary covenants and warranties, including limits and reserves and the maintenance of specified financial ratios. We are required to maintain a leverage ratio at the end 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 the parent company. Additional fees are incurred for the average daily unused commitments.September 30, 2017, there were noMarch 31, 2021, we had 0 borrowings or letters of credit outstanding and $900 million unused availability under this facility.facility.Othercommercial paper outstanding at March 31, 2021 are based on the terms of the notes and range from 0.19% to 0.27%. At March 31, 2021, we had $500 million of outstanding commercial paper.September 30, 2017March 31, 2021 and December 31, 2016,2020, our weighted average interest raterates on outstanding short-termShort-term debt was 1.4% and 0.9%, respectively.In the nine months ended September 30, 2017 and 2016, amortization$16$5 million and $12$4 million for the three months ended March 31, 2021 and 2020, respectively, which is included in Interest expense in the Consolidated Statements of Income.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)6.Financial Instruments and Fair Value Measurementscurrency 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.the Company’sour financial instruments, risk management policies, derivative instruments, hedging activities and fair value measurement can be found in Notes 142 and 1513 to our Consolidated Financial Statements included in the Company’sour Annual Report on Form 10-K for the year ended December 31, 2016.2020. If applicable, updates have been included in the respective sections below.as of September 30, 2017 and December 31, 2016for the periods presented that are measured at fair value on a recurring basis: September 30, 2017 December 31, 2016 Notional Fair Notional Fair Balance Sheet Amount Value Amount Value Classification $ 22 $ — $ 4 $ — Prepaid expenses and other current assets 16 — 54 3 Other assets — 15 604 34 Prepaid expenses and other current assets 2,000 70 2,439 282 Other assets — 24 — 5 Prepaid expenses and other current assets 1,950 11 2,200 11 Other assets 131 12 85 3 Prepaid expenses and other current assets 32 — 11 — Prepaid expenses and other current assets 1,299 1,295 1,069 1,073 Short-term investments $ 5,450 $ 1,427 $ 6,466 $ 1,411 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued) September 30, 2017 December 31, 2016 Notional Fair Notional Fair Balance Sheet Amount Value Amount Value Classification $ 59 $ 2 $ — $ — Accrued liabilities 13 — — — Other liabilities 139 9 — — Accrued liabilities 950 120 — — Other liabilities 2,050 42 1,400 20 Other liabilities 192 16 103 11 Accrued liabilities 631 1 28 1 Accrued liabilities 20 20 19 19 Accrued liabilities 21 21 22 22 Other liabilities $ 4,075 $ 231 $ 1,572 $ 73 All derivatives and available-for-sale securities in the tables above are classified as Level 2, except for March 31, 2021 December 31, 2020 Millions of dollars Notional Amount Fair Value Notional Amount Fair Value Balance Sheet
ClassificationAssets– Derivatives designated as hedges: Commodities $ 25 $ 5 $ 19 $ 3 Prepaid expenses and other current assets Commodities 30 4 41 4 Other Assets Foreign currency 358 56 0 26 Prepaid expenses and other current assets Interest rates 0 1 0 0 Prepaid expenses and other current assets Interest rates 117 1 122 2 Other assets Derivatives not designated as hedges: Commodities 111 5 71 2 Prepaid expenses and other current assets Foreign currency 34 1 149 0 Prepaid expenses and other current assets Non-derivatives: Available-for-sale debt securities 265 266 348 349 Short-term investments Equity securities 117 117 353 353 Short-term investments Total $ 1,057 $ 456 $ 1,103 $ 739 Liabilities– Derivatives designated as hedges: Commodities $ 0 $ 0 $ 0 $ 2 Accrued liabilities Foreign currency 855 116 1,213 146 Accrued liabilities Foreign currency 2,682 209 2,682 302 Other liabilities Interest rates 1,150 120 1,000 343 Other liabilities Derivatives not designated as hedges: Commodities 191 22 113 14 Accrued liabilities Foreign currency 717 5 76 1 Accrued liabilities Total $ 5,595 $ 472 $ 5,084 $ 808 available-for-saleequity 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.September 30, 2017,March 31, 2021, our outstanding foreign currency andcontracts, not designated as hedges, mature from April 2021 to March 2022. Our commodity contracts, not designated as hedges, mature from October 2017 to December 2017 and from October 2017 to June 2018, respectively.STATEMENTS—STATEMENTS-(Continued)asfor the periods presented. Due to the short maturity, the fair value of September 30, 2017all non-derivative financial instruments included in Current assets and December 31, 2016: September 30, 2017 December 31, 2016 Carrying
Value Fair
Value Carrying
Value Fair
Value $ 561 $ 561 $ 369 $ 369 $ 59 $ 67 $ 90 $ 98 8,528 9,428 8,382 9,147 $ 8,587 $ 9,495 $ 8,472 $ 9,245 abovebelow are classified as Level 2. There were no transfers between Level 1 and Level 2 for any of our financial instruments during the nine months ended September 30, 2017 and the year ended December 31, 2016.March 31, 2021 December 31, 2020 Millions of dollars Carrying
ValueFair
ValueCarrying
ValueFair
ValueNon-derivatives: Liabilities: Short-term debt $ 162 $ 181 $ 140 $ 154 Long-term debt 14,715 15,895 15,266 17,290 Total $ 14,877 $ 16,076 $ 15,406 $ 17,444 March 31, 2021 December 31, 2020 Millions of euro/dollars Notional Value Notional Value Expiration Date Equivalent
US$Equivalent
US$Foreign currency € 1,667 $ 1,890 € 1,667 $ 1,890 2021 to 2030 August 2017 and September 2017, forward exchange contracts and basis swapsApril 2021, we entered into a foreign currency contract with an aggregatea notional value of €550€250 million expired. Upon settlement of these foreign currency contracts, we paid €550 million ($658 million at the expiry spot rate) to our counterparties and received $609 million from our counterparties. The $49 million loss is reflected in foreign currency translation adjustments in Accumulated other comprehensive loss. Cash flows from the settlement of these foreign currency contracts are reported in Cash flows from investing activities in the Consolidated Statements of Cash Flows.In February 2017, we entered into €617 million of basis swaps to reduce the volatility in stockholders’ equity resulting from changes in currency exchange rates of our foreign subsidiaries with respect to the U.S. dollar. We use the critical terms match to assess hedge effectiveness of these basis swaps by comparing the spot rate change in the basis swaps and the spot rate change in the designated net investment.In September 2016, €450 million of our basis swaps expired. Upon settlement of these basis swap contracts, we paid €450 million ($506 million at the expiry spot rate) to our counterparties and received $500 million from our counterparties. The $6 million loss is reflected in foreign currency translation adjustments in Accumulated other comprehensive loss. Cash flows from the settlement of these basis swap contracts are reported in Cash flows from investing activities in the Consolidated Statements of Cash Flows.On March 31, 2016, we settled forward exchange contracts with an aggregate notional value of €750 million. Upon settlement of these contracts, we paid €750 million ($850 million at the expiry spot rate) to our counterparties and received $795 million from our counterparties. The $55 million difference, which includes a $30 million loss in the first quarter of 2016, is reflected in foreign currency translations adjustments in Accumulated other comprehensive loss. Cash flows from the settlement of these forward exchange contracts are reported in Cash flows from investing activities in the Consolidated Statements of Cash Flows.At September 30, 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 netLYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)investment hedges. In addition, we had outstanding foreign-currency denominated debt, with notional amounts totaling €750 million ($850 million),that was designated as a net investment hedge at each of September 30, 2017 and December 31, 2016.There was no ineffectiveness recorded for any of these net investment hedging relationships during the three and nine months ended September 30, 2017 and 2016.at September 30, 2017for the periods presented:March 31, 2021 December 31, 2020 Millions of dollars Notional Value Notional Value Expiration Date Foreign currency $ 2,005 $ 2,005 2021 to 2027 Interest rates 1,000 1,000 2023 to 2024 Commodities 55 60 2021 to 2022 2016: September 30, 2017 December 31, 2016 Notional
Value Notional
Value Expiration
Date $ 2,300 $ 2,300 2021 to 2027 1,000 1,000 2049 110 58 2017 to 2019 The ineffectiveness recorded for these cash flow hedging relationships was losses of less than $1 million during each of the three months ended September 30, 2017 and 2016 and losses of $12020, Other assets include$1$238 million duringof collateral held with our counterparties related to our forward-starting interest rate swaps, respectively. Related cash flows are included in financing activities in the nine months ended September 30, 2017 and 2016.September 30, 2017, less than $1March 31, 2021, on a pre-tax basis, $5 million (on a pretax basis) and $2 million (on a pretax basis) areis scheduled to be reclassified from Accumulated other comprehensive loss as decreasesan increase to interestInterest expense and cost of sales respectively over the next twelve months.March 31, 2021 December 31, 2020 Millions of dollars Notional Value Notional Value Expiration Date Interest rates $ 267 $ 122 2026 to 2030 February 2017,March 2021, we entered into U.S. dollara fixed-for-floating interest rate swap to mitigate the change in the fair value of $150 million of our $500 million, 3.375% guaranteed notes due 2030 associated with the risk of variability in the 3-month LIBOR rate component.changesthe change in the fair value associated with the risk of variability in the 3-month LIBOR rate component of $150 million of our $500 million, 2.875% guaranteed notes due 2025 and $150 million 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 benchmark interest rate). 2027.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. For information related to charges recognized as a result of the dedesignation of the hedging relationship, see Note 5.At September 30, 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 September 30, 2017 mature from 2019 to 2027.The ineffectiveness related to these fair value hedging relationships resulted in net losses of $4 million and $11 million for the three months and nine months ended September 30, 2017, respectively, and net gains of $8 million and $26 million, respectively, for the three and nine months ended September 30, 2016, respectively.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)table summarizestables summarize the pre-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: Effects of Financial Instruments Three Months Ended March 31, Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Income Gain (Loss) Recognized in Income Income Statement Millions of dollars 2021 2020 2021 2020 2021 2020 Classification Derivatives designated as hedges: Commodities $ 6 $ 0 $ (1) $ 0 $ 0 $ 0 Cost of sales Foreign currency 148 164 (92) (53) 12 16 Interest expense Interest rates 223 (535) 1 0 2 96 Interest expense Derivatives not designated as hedges: Commodities 0 0 0 0 3 (9) Sales and other operating revenues Commodities 0 0 0 0 11 (3) Cost of sales Foreign currency 0 0 0 0 (14) (4) Other income, net Non-derivatives designated as hedges: Long-term debt 0 22 0 0 0 0 Other income, net Total $ 377 $ (349) $ (92) $ (53) $ 14 $ 96 and earnings for the three months ended September 30: Effect of Financial Instruments Gain (Loss)
Recognized
in AOCI Gain (Loss)
Reclassified
from AOCI
to Income Additional
Gain (Loss)
Recognized
in Income Income Statement
Classification 2017 2016 2017 2016 2017 2016 $ 3 $ — $ — $ — $ — $ — Cost of sales (155 ) (52 ) 74 5 — — Other income, net (5 ) (21 ) — — 3 (12 ) Interest expense — — — — (6 ) (4 ) Sales and other
operating revenues
— — — — 6 (5 ) Cost of sales — — — — (6 ) 1 Other income, net (30 ) (2 ) — — — — $ (187 ) $ (75 ) $ 74 $ 5 $ (3 ) $ (20 ) STATEMENTS—STATEMENTS-(Continued)The following table summarizes the pre-tax effect of derivative instruments and non-derivative instruments on Other comprehensive income and earnings for the nine months ended September 30: Effect of Financial Instruments Gain (Loss)
Recognized
in AOCI Gain (Loss)
Reclassified
from AOCI
to Income Additional
Gain (Loss)
Recognized
in Income Income Statement
Classification 2017 2016 2017 2016 2017 2016 $ (4 ) $ — $ — $ — $ — $ — Cost of sales (403 ) (134 ) 232 52 — — Other income, net (23 ) (175 ) — — 20 31 Interest expense — — — — (9 ) 6 Sales and other
operating revenues
— — — — (31 ) (27 ) Cost of sales — — — — (7 ) 13 Other income, net (95 ) 12 — — — — $ (525 ) $ (297 ) $ 232 $ 52 $ (27 ) $ 23 Foreign currency losses recognized in other comprehensive income representing the effective portion of our net investment hedges include losses of $87 million and $265 million in the three and nine months ended September 30, 2017, respectively, and $6 million and $39 million in the three and nine months ended September 30, 2016, respectively.gains (losses) recognized in income forperiodic receipt of fixed interest and payment of variable interest associated with our fixed-for-floating interest rate swaps includes the net value of interest accrued of $5resulted in less than $1 million and $18$2 million decreases in Interest expense during the three and nine months ended September 30, 2017in March 31, 2021 and $6 million and $17 million for the three and nine months ended 2016,2020, respectively.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)MarketableAvailable-for-Sale Debt Securities—The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of our outstanding available-for-sale and held-to maturity securities that are outstanding as of September 30, 2017 and December 31, 2016: September 30, 2017 Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value $ 177 $ — $ — $ 177 621 1 — 622 150 — — 150 1 — — 1 350 1 (6 ) 345 $ 1,299 $ 2 $ (6 ) $ 1,295 December 31, 2016 Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value $ 232 $ — $ — $ 232 141 — — 141 347 1 — 348 350 2 — 352 $ 1,070 $ 3 $ — $ 1,073 $ 74 $ — $ — $ 74 At September 30, 2017 and December 31, 2016, we had marketable securities classified as Cash and cash equivalents of $725 million and $351 million, respectively.Nodebt securities: Millions of dollars Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities at March 31, 2021 $ 265 $ 1 $ 0 $ 266 Debt securities at December 31, 2020 348 1 0 349 other-than-temporary impairments of our available-for-sale and held-to-maturity investments have beendebt securities were recorded in Accumulated other comprehensive loss duringfor the three and nine months ended September 30, 2017March 31, 2021 and for the year ended December 31, 2016.September 30, 2017, ourMarch 31, 2021, bonds classified as available-for-sale debt securities had the following maturities: commercial paper securities held by the Company hadremaining maturities between five1 month and six months; bonds had maturities between seven and thirty-seven months; certificates3 months.deposit mature within six months; and limited partnership investments mature between one and three months.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)The proceeds$74 million from maturities and sales of our available-for-sale debt securities during the three and nine months ended September 30, 2017March 31, 2021. NaN proceeds were received from maturities of our available-for-sale debt securities during the three months ended March 31, 2020. In addition, 0 proceeds were received and 2016 are summarized in the following table: Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 12 $ 8 $ 499 $ 665 — — — — No0 gain or loss was realized in connection with the sales of our available-for-sale debt securities during the three and nine months ended September 30, 2017March 31, 2021 and 2016.During the nine months ended September 30, 2017, we2020, respectively.maturities of our held-to-maturity0 available-for-sale debt securities of $75 million. During the three and nine months ended September 30, 2017, we had no sales of our held-to-maturity securities and we had no transfers of investments classified as held-to-maturity to available-for-sale.The following table summarizes the fair value and unrealized losses related to available-for-sale and held-to-maturity securities thatwhich were in a continuous unrealized loss position for less than andor greater than twelve months as of September 30, 2017March 31, 2021 and December 31, 2016: September 30, 2017 Less than 12 months Greater than 12 months Fair
Value Unrealized
Loss Fair
Value Unrealized
Loss $ 122 $ (5 ) $ 105 $ (2 ) December 31, 2016 Less than 12 months Greater than 12 months Fair
Value Unrealized
Loss Fair
Value Unrealized
Loss $ — $ — $ 105 $ (3 ) Foreign Currency Gain (Loss)2020.Other income,Our investment in equity securities consists of an investment in a limited partnership with a notional amount of $117 million and $353 million as of March 31, 2021 and December 31, 2020, respectively. Carrying amount approximate fair value. The investment is carried at its net asset value as a practical expedient at March 31, 2021 and fair value at December 31, 2020. The investment is under voluntary liquidation by the fund administrator and we expect the investment to be fully liquidated within the next twelve months, during which time redemption or sale of the investment is restricted.Consolidated Statementsthree months ended March 31, 2021 and 2020, respectively. Proceeds of Income reflected losses$16 million were received in April 2021.and $6 million for the three and nine months ended September 30, 2017, respectively, and a gain of $1 million and a loss of $5 million for the three and nine months ended September 30, 2016, respectively.Repurchase Agreements—At September 30, 2017 and December 31, 2016, we had investments in tri-party repurchase agreements of $561 million and $369 million, respectively. 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.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)7.Pension and Other Postretirement BenefitsNet periodic pension benefits included the following cost components for the periods presented: U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 11 $ 11 $ 35 $ 33 15 22 45 66 (30 ) (34 ) (91 ) (104 ) 5 5 16 15 $ 1 $ 4 $ 5 $ 10 Non-U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 9 $ 8 $ 28 $ 24 5 8 16 24 (4 ) (6 ) (13 ) (18 ) 4 2 11 6 $ 14 $ 12 $ 42 $ 36 Net periodic other postretirement benefits included the following cost components for the periods presented: U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ — $ — $ 2 $ 2 3 3 7 9 $ 3 $ 3 $ 9 $ 11 Non-U.S. Plans Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 1 $ — $ 2 $ 1 — — 1 1 1 1 2 2 $ 2 $ 1 $ 5 $ 4 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)8.Income TaxesOur effective income tax rate forequity securities that were outstanding during the three months ended September 30, 2017 was 26.4% compared with 25.4% for the three months ended September 30, 2016. March 31, 2021 and 2020.the nine months ended September 30, 2017, theinterim tax reporting, we estimate an annual effective income tax rate was 27.8% compared with 26.4% forwhich is applied to the first nine months ended September 30, 2016.year-to-date ordinary income (loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur. Our effective income tax rate fluctuates based on, among other factors, 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,gains (losses), the amount of exempt income, and changes in unrecognized tax benefits associated with uncertain tax positions.Compared with the third quarter of 2016, the higher effective tax rate for the third quarter of 2017 was primarily attributable topositions and changes in pretax income in countries with varying statutory tax rates, prior year adjustments to our deferred tax liabilities, and an increase in foreign currency exchange gains, partially offset by an increase in exempt income, and an increase in U.S. domestic production activity deduction. Compared with the first nine monthslaws.STATEMENTS—STATEMENTS-(Continued)9.Commitments and ContingenciesInstruments—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 difficulty in obtaining the required financial assurance instruments for our current operations.Remediation—Remediation—Our accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $99$130 million and $95$133 million as of September 30, 2017March 31, 2021 and December 31, 2016,2020, respectively. At September 30, 2017,March 31, 2021, the accrued liabilities for individual sites range from less than $1 million to $17$16 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:” Nine Months Ended
September 30, 2017 2016 $ 95 $ 106 — 3 3 10 (7 ) (16 ) 8 2 $ 99 $ 105 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 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. In May 2017, the plaintiffs filed an appeal of this Final Judgment to the Federal District Court for the Southern District of New York. That appeal remains pending.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 relatingLYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)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.Although the court issued its Final Judgment inWeisfelner in May 2017 as noted above, it remains on appeal and subject to further potential appeal by the parties. Accordingly, we cannot at this time estimate the reasonably possible loss or range of loss that may be incurred.409A Matter—Certain of the Company’s current and former executives were being audited by the Internal Revenue Service for the 2012 tax year regarding the treatment of their Company stock options under Section 409A of the Internal Revenue Code. In early 2017, the audits were settled and the Company has incurred an aggregate of $1.7 million for all liabilities relating to the 2012 tax year. The Company believes that any additional future liability that may arise related to this issue will not be material.third partythird-party claims relating to environmental and tax matters and various types of litigation. As of September 30, 2017,March 31, 2021, 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.five5 to ten10 years.10.Stockholders’ EquityDividend distributions—The following table summarizesdividends paidspecific 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 periods presented: Dividend Per
Ordinary
Share Aggregate
Dividends
Paid Date of Record $ 0.85 $ 343 March 6, 2017 0.90 361 June 5, 2017 0.90 356 September 6, 2017 $ 2.65 $ 1,060 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)Share Repurchase Programs—In May 2017, our shareholders approved a proposal to authorizeearly evaluation and quantification of potential exposures in individual cases. This process also enables us to repurchase uptrack 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.an additional 10%shareholders of our outstanding ordinary shares through November 2018 (“May 2017 Share Repurchase Program”). As a result, the authorization of the remaining unpurchased shares under the share repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was superseded.These repurchases, which are determined at the discretion of our Management Board, may be executed from time to time through open market or privately negotiated transactions. The repurchased shares, which are recorded at cost, are recorded as Treasury stock and may be retired or used for general corporate purposes, including for various employee benefit and compensation plans.The following table summarizes our share repurchase activity for the periods presented: Nine Months Ended September 30, 2017 Shares
Repurchased Average
Purchase
Price Total Purchase
Price, Including
Commissions 3,501,084 $ 85.71 $ 300 6,516,917 83.54 545 10,018,001 $ 84.30 $ 845 Nine Months Ended September 30, 2016 Shares
Repurchased Average
Purchase
Price Total Purchase
Price, Including
Commissions 15,302,707 $ 80.15 $ 1,226 16,091,214 77.73 1,251 31,393,921 $ 78.91 $ 2,477 Due to the timing of settlements, total cash paid for share repurchases for the nine months ended September 30, 2017 and 2016 was $866 million and $2,501 million, respectively. Nine Months Ended
September 30, 2017 2016 404,046,331 440,150,069 343,663 338,103 4,184 200 81,964 71,108 (10,018,001 ) (31,393,921 ) 394,458,141 409,165,559 LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued) Three Months Ended
March 31, 2021 2020 Ordinary shares outstanding: Beginning balance 334,015,220 333,476,883 Share-based compensation 247,964 196,037 Employee stock purchase plan 49,956 81,215 Purchase of ordinary shares 0 (50,685) Ending balance 334,313,140 333,703,450 Nine Months Ended September 30, 2017 2016 174,389,139 138,285,201 (343,663 ) (338,103 ) 509 — (81,964 ) (71,108 ) 10,018,001 31,393,921 183,982,022 169,269,911 Three Months Ended
March 31, 2021 2020 Ordinary shares held as treasury shares: Beginning balance 6,030,408 6,568,745 Share-based compensation (247,964) (196,037) Employee stock purchase plan (49,956) (81,215) Purchase of ordinary shares 0 50,685 Ending balance 5,732,488 6,342,178 Income (Loss)Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the ninethree months ended September 30, 2017March 31, 2021 and 20162020 are presented in the following table: Net Unrealized Net Holding Unrealized Gains Defined Holding (Losses) Pension Foreign Gains Attributable and Other Currency Financial (Losses) on to Equity Postretirement Translation Derivatives Investments Investees Benefit Plans Adjustments Total $ (75 ) $ 1 $ — $ (498 ) $ (939 ) $ (1,511 ) (187 ) (5 ) 14 — 143 (35 ) 167 — — 20 — 187 (20 ) (5 ) 14 20 143 152 $ (95 ) $ (4 ) $ 14 $ (478 ) $ (796 ) $ (1,359 ) $ (79 ) $ (5 ) $ — $ (428 ) $ (926 ) $ (1,438 ) (201 ) (7 ) — — 80 (128 ) 52 — — 15 7 74 (149 ) (7 ) — 15 87 (54 ) $ (228 ) $ (12 ) $ — $ (413 ) $ (839 ) $ (1,492 ) Millions of dollars Financial
DerivativesUnrealized
Gains on Available
-for-Sale
Debt SecuritiesDefined Benefit
Pension and Other
Postretirement
Benefit PlansForeign
Currency
Translation
AdjustmentsTotal Balance – January 1, 2021 $ (426) $ 1 $ (752) $ (766) $ (1,943) Other comprehensive income (loss) before reclassifications 315 0 0 (93) 222 Tax expense before reclassifications (68) 0 0 (14) (82) Amounts reclassified from accumulated other comprehensive loss (92) 0 15 0 (77) Tax (expense) benefit 20 0 (4) 0 16 Net other comprehensive income (loss) 175 0 11 (107) 79 Balance – March 31, 2021 $ (251) $ 1 $ (741) $ (873) $ (1,864) Millions of dollars Financial
DerivativesUnrealized
Gains on Available
-for-Sale
Debt SecuritiesDefined Benefit
Pension and Other
Postretirement
Benefit PlansForeign
Currency
Translation
AdjustmentsTotal Balance – January 1, 2020 $ (200) $ 0 $ (711) $ (873) $ (1,784) Other comprehensive loss before reclassifications (388) (3) 0 (195) (586) Tax (expense) benefit before reclassifications 88 1 0 (4) 85 Amounts reclassified from accumulated other comprehensive loss (53) 0 14 0 (39) Tax (expense) benefit 15 0 (4) 0 11 Net other comprehensive income (loss) (338) (2) 10 (199) (529) Balance – March 31, 2020 $ (538) $ (2) $ (701) $ (1,072) $ (2,313) STATEMENTS—STATEMENTS-(Continued) Three Months Ended
September 30, Nine Months Ended
September 30, Affected line item on
the Consolidated
Statements of Income 2017 2016 2017 2016 $ 74 $ 5 $ 232 $ 52 Other income, net — 1 — 1 10 8 29 23 — 7 — 7 Other income, net 84 21 261 83 21 4 74 9 Provision for income taxes $ 63 $ 17 $ 187 $ 74 Amortization Three Months Ended
March 31,Affected Line Item on
the Consolidated
Statements of IncomeMillions of dollars 2021 2020 Reclassification adjustments for: Financial derivatives: Foreign currency $ (92) $ (53) Interest expense Commodities (1) 0 Cost of sales Interest rates 1 0 Interest expense Income tax expense (benefit) (20) (15) Provision for income taxes Financial derivatives, net of tax (72) (38) Amortization of defined pension items: Prior service cost 1 1 Other income, net Actuarial loss 14 13 Other income, net Income tax expense (benefit) 4 4 Provision for income taxes Defined pension items, net of tax 11 10 Total reclassifications, before tax (77) (39) Income tax benefit (16) (11) Provision for income taxes Total reclassifications, after tax $ (61) $ (28) Amount included in net income actuarial losscumulative perpetual special stock (“redeemable non-controlling interest stock”) issued by our consolidated subsidiary, formerly known as A. Schulman. As of March 31, 2021 and prior service cost is included inDecember 31, 2020, we had 115,374 shares of redeemable non-controlling interest stock outstanding.computationthree months ended March 31, 2021 and 2020.isare based upon the weighted average number of shares of common stock outstanding during the periods. Diluted earnings per share includes the effect of certain stock option awards and other equity-based compensation awards. We have unvested restricted stock units that are considered participating securities for earnings per share. Three Months Ended September 30, 2017 2016 Continuing Discontinued Continuing Discontinued Operations Operations Operations Operations $ 1,058 $ (2 ) $ 955 $ (2 ) 1 — (1 ) — 1,059 (2 ) 954 (2 ) (1 ) — (1 ) — $ 1,058 $ (2 ) $ 953 $ (2 ) 395 395 413 413 — — 1 1 395 395 414 414 $ 2.67 $ — $ 2.31 $ (0.01 ) $ 2.67 $ — $ 2.31 $ (0.01 ) 0.4 0.4 0.4 0.4 $ 0.90 $ — $ 0.85 $ — Three Months Ended March 31, 2021 2020 Millions of dollars Continuing
OperationsDiscontinued
OperationsContinuing
OperationsDiscontinued
OperationsNet income (loss) $ 1,072 $ (2) $ 143 $ 1 Dividends on redeemable non-controlling interests (2) 0 (2) 0 Net (income) loss attributable to participating securities (2) 0 0 0 Net income (loss) attributable to ordinary shareholders – basic and diluted $ 1,068 $ (2) $ 141 $ 1 Millions of shares, except per share amounts Basic weighted average common stock outstanding 334 334 334 334 Effect of dilutive securities 0 0 0 0 Potential dilutive shares 334 334 334 334 Earnings (loss) per share: Basic $ 3.20 $ (0.01) $ 0.42 $ 0 Diluted $ 3.19 $ (0.01) $ 0.42 $ 0 STATEMENTS—STATEMENTS-(Continued) Nine Months Ended September 30, 2017 2016 Continuing Discontinued Continuing Discontinued Operations Operations Operations Operations $ 2,997 $ (14 ) $ 3,077 $ (3 ) 2 — (1 ) — 2,999 (14 ) 3,076 (3 ) (3 ) — (3 ) — $ 2,996 $ (14 ) $ 3,073 $ (3 ) 400 400 423 423 — — 1 1 400 400 424 424 $ 7.49 $ (0.03 ) $ 7.26 $ (0.01 ) $ 7.49 $ (0.03 ) $ 7.24 $ (0.01 ) 0.4 0.4 0.4 0.4 $ 2.65 $ — $ 2.48 $ — LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)12.Segment and Related Informationthrough 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 our 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–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, including polypropylene compounds.•Intermediates and Derivatives (“I&D”). Our I&D segment produces and markets propylene oxide and its co-products and 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 oils 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.segments’ profitabilitysegments, and therefore, in accordance with ASC 280,Segment Reporting, we have presented EBITDA for all segments. We define EBITDA as earnings before interest, income taxes, and depreciation and amortization.Intersegmentare included in “Other.”such as foreign exchange gains or losses and components of pension and other postretirement benefit costs other than service costs. Sales between segments are made primarily at prices approximating prevailing market prices.LYONDELLBASELL INDUSTRIES N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)tabletables for the periods presented: Three Months Ended September 30, 2017 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 1,817 $ 3,096 $ 2,043 $ 1,491 $ 69 $ — $ 8,516 632 56 34 179 29 (930 ) — 2,449 3,152 2,077 1,670 98 (930 ) 8,516 8 69 4 — — — 81 616 698 402 58 47 — 1,821 Three Months Ended September 30, 2016 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 1,740 $ 2,585 $ 1,769 $ 1,192 $ 80 $ (1 ) $ 7,365 602 49 36 138 22 (847 ) — 2,342 2,634 1,805 1,330 102 (848 ) 7,365 12 67 2 — — — 81 682 584 304 (10 ) 45 1 1,606 Nine Months Ended September 30, 2017 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 5,631 $ 9,029 $ 6,142 $ 4,306 $ 241 $ — $ 25,349 1,969 155 99 430 84 (2,737 ) — 7,600 9,184 6,241 4,736 325 (2,737 ) 25,349 33 202 5 — — — 240 2,198 1,926 1,080 53 155 (4 ) 5,408 Three Months Ended March 31, 2021 Millions of dollars O&P–
AmericasO&P–
EAII&D APS Refining Technology Other Total Sales and other operating revenues: Customers $ 2,135 $ 2,840 $ 1,704 $ 1,269 $ 993 $ 141 $ 0 $ 9,082 Intersegment 724 207 63 1 133 24 (1,152) 0 2,859 3,047 1,767 1,270 1,126 165 (1,152) 9,082 Income from equity investments 30 95 12 0 0 0 0 137 EBITDA 867 412 182 135 (110) 94 5 1,585 Capital expenditures 65 40 145 20 25 22 23 340 STATEMENTS—STATEMENTS-(Continued) Nine Months Ended September 30, 2016 O&P–
Americas O&P–
EAI I&D Refining Technology Other Total $ 4,978 $ 7,805 $ 5,186 $ 3,179 $ 288 $ — $ 21,436 1,690 128 90 395 75 (2,378 ) — 6,668 7,933 5,276 3,574 363 (2,378 ) 21,436 54 232 3 — — — 289 2,314 1,669 1,027 (9 ) 201 (6 ) 5,196 Our O&P–Americas results for the first nine months of 2017 include a $31 million gain on the first quarter sale of our Lake Charles, Louisiana site. EBITDA for our O&P–EAI segment in the third quarter and first nine months of 2017 includes a $108 million gain on the sale of our 27% interest in Geosel and the first nine months of 2017 also includes a $21 million non-cash gain stemming from the elimination of an obligation associated with a lease.In the first nine months of 2016, our O&P–Americas and O&P–EAI segments also benefited from gains of $57 million and $21 million, respectively, related to the sale of our wholly owned Argentine subsidiary, Petroken Petroquimica Ensenada S.A.Three Months Ended March 31, 2020 Millions of dollars O&P–
AmericasO&P–
EAII&D APS Refining Technology Other Total Sales and other operating revenues: Customers $ 1,173 $ 2,064 $ 1,732 $ 1,093 $ 1,336 $ 96 $ 0 $ 7,494 Intersegment 619 160 38 3 112 26 (958) 0 1,792 2,224 1,770 1,096 1,448 122 (958) 7,494 Income (loss) from equity investments 2 (3) 2 (1) 0 0 0 0 LCM inventory valuation charge 111 36 78 2 192 0 0 419 EBITDA 366 189 203 113 (272) 56 (9) 646 Capital expenditures 204 42 353 13 16 30 2 660 Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 $ 1,821 $ 1,605 $ 5,412 $ 5,202 — 1 (4 ) (6 ) (294 ) (257 ) (876 ) (791 ) (94 ) (72 ) (396 ) (237 ) 5 4 15 13 $ 1,438 $ 1,281 $ 4,151 $ 4,181 Three Months Ended
March 31,Millions of dollars 2021 2020 EBITDA: Total segment EBITDA $ 1,580 $ 655 Other EBITDA 5 (9) Less: Depreciation and amortization expense (335) (342) Interest expense (110) (89) Add: Interest income 2 3 Income from continuing operations before income taxes $ 1,142 $ 218
subsidiaries (“LyondellBasell N.V.”). rapidly rising raw material costs. and analysis 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 “we,”“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.Our portfolioglobal businesses demonstrated strong performancelast year. We experienced improved consumer-driven demand, recovery in the third quarter with the improvementdurable goods markets and industry supply constraints, which enabled price increases and drove margin improvements for many of our products. During February 2021, unusually cold weather and related power outages impacted operations in our I&D segmentindustry across the state of Texas and continued strongreduced our production volumes. In March 2021 we achieved the first full quarter of results for our recently formed Louisiana Integrated PolyEthylene JV LLC joint venture (the “Louisiana Joint Venture”) in which we have a 50% ownership interest. We benefited from the increased geographic diversity of our O&P–EAI segment.portfolio as the Louisiana ethylene cracker operated continuously when most Texas Gulf Coast production lossesassets were down due to the impacts of Hurricane Harvey on our operations in the third quarter of 2017 were partly offset bycold weather. Tight markets and strong demand drove margin improvements in our O&P—Americas and in many cases, were similarO&P—EAI segments. Higher demand from automotive and other non-durable markets increased volumes for our Advanced Polymer Solutions segment while margins compressed due to or less than production constraints in the comparable periods of 2016.thirdfirst quarter and first nine months of 20172021 relative to the thirdfirst quarter and first nine months of 20162020 include:Lower •O&P–&P—Americas results increased primarily due to olefin margin improvements and the first full quarter of results for our newly formed Louisiana Joint Venture;decline in olefinsresult of higher polyolefin margins and equity income, partly offset by higher polyethylene margins in the third quarter of 2017;lower olefin margins; and lower polyolefins margins in the first nine months of 2017, partly offset by increased olefins volumes;
Results of operations for the periods discussed are presented in the table below:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues | $ | 8,516 | $ | 7,365 | $ | 25,349 | $ | 21,436 | ||||||||
Cost of sales | 6,939 | 5,903 | 20,531 | 16,771 | ||||||||||||
Selling, general and administrative expenses | 218 | 188 | 622 | 580 | ||||||||||||
Research and development expenses | 27 | 25 | 77 | 73 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 1,332 | 1,249 | 4,119 | 4,012 | ||||||||||||
Interest expense | (94 | ) | (72 | ) | (396 | ) | (237 | ) | ||||||||
Interest income | 5 | 4 | 15 | 13 | ||||||||||||
Other income, net | 114 | 19 | 173 | 104 | ||||||||||||
Income from equity investments | 81 | 81 | 240 | 289 | ||||||||||||
Provision for income taxes | 380 | 326 | 1,154 | 1,104 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income from continuing operations | 1,058 | 955 | 2,997 | 3,077 | ||||||||||||
Loss from discontinued operations, net of tax | (2 | ) | (2 | ) | (14 | ) | (3 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 1,056 | $ | 953 | $ | 2,983 | $ | 3,074 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 9,082 | $ | 7,494 | |||||||||||||||||||
| Cost of sales | 7,678 | 6,868 | |||||||||||||||||||||
| Selling, general and administrative expenses | 287 | 295 | |||||||||||||||||||||
| Research and development expenses | 29 | 27 | |||||||||||||||||||||
| Operating income | 1,088 | 304 | |||||||||||||||||||||
| Interest expense | (110) | (89) | |||||||||||||||||||||
| Interest income | 2 | 3 | |||||||||||||||||||||
| Other income, net | 25 | — | |||||||||||||||||||||
| Income from equity investments | 137 | — | |||||||||||||||||||||
| Income from continuing operations before income taxes | 1,142 | 218 | |||||||||||||||||||||
| Provision for income taxes | 70 | 75 | |||||||||||||||||||||
| Income from continuing operations | 1,072 | 143 | |||||||||||||||||||||
| (Loss) income from discontinued operations, net of tax | (2) | 1 | |||||||||||||||||||||
| Net income | $ | 1,070 | $ | 144 | |||||||||||||||||||
2020. Average sales prices in the thirdfirst quarter and first nine months of 20172021 were higher across mostfor many of our products as sales prices generally correlate with crude oil prices, which on average, increased comparedrelative to the corresponding periodsperiod in 2016.2020. These higher prices led to increasesa 26% increase in revenues of 9% and 15%, respectively. Higher volumes in our O&P–Americas, O&P-EAI and Refining segments, which were partly offset by lower I&D segment volumes, led to revenue increases in the thirdfirst quarter and first nine months of 2017 by 5% and 3%, respectively.2021. Favorable foreign exchange impacts resulted in a 2% revenue increase inof 4% during the thirdfirst quarter of 2017.
2021. Lower sales volumes resulted in a revenue decrease of 9% relative to the first quarter of 2020 primarily due to unusually cold temperatures and associated electrical power outages that led to shutdowns in our Refining and I&D manufacturing facilities in Texas partially offset by revenues generated from our Louisiana Joint Venture.
Additionally, in the first quarter of 2020, we recognized an LCM inventory valuation charge of $419 million related to the decline in market pricing for many of our raw material and finished goods inventories during the quarter.
Operating income for the third quarter of 20172020. In the first quarter of 2021, operating income in our O&P–Americas, Refining, O&P–EAI, Technology and APS segments increased by $449 million, $184 million, $124 million, $35 million and $34 million, respectively, relative to the thirdfirst quarter of 2016 by $89 million and $66 million in our I&D and Refining segments, respectively. These favorable impacts2020. The increases were partially offset by a decline of $85$43 million in our O&P–Americas segment.
Operating income forI&D segment in the first nine monthsquarter of 2017 increased relative2021 compared to the first nine monthsquarter of 2016 by $182 million, $46 million and $58 million in our O&P–EAI, I&D and Refining segments. These favorable impacts were offset by declines of $141 million and $45 million, respectively, in our O&P–Americas and Technology segments.
2020. Results for each of our business segments are discussed further in the “Segment Analysis” section below.
Interest Expense
In the first nine months of 2017, we recognized charges totaling $113 million related2020. The increase was primarily due to the March 2017 redemption of $1,000 million of our outstanding 5% senior notes due 2019. These charges included $65 million of prepayment premiums, $44 million for adjustments associated with fair value hedges and $4 million for the write-off of associated unamortized debt issuance costs. For additional information related to the repayment of debt, see Note 5.
Excluding the effect of interest rate hedges, reductions in interest expense of $13 million and $26 million in the third quarter and first nine months of 2017 related to the first quarter 2017 redemption of our 5% senior notes due 2019 were substantially offset in the third quarter and first nine months of 2017 by increased interest expense of $10 million and $24 million, respectively, related 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 in the third quarter and first nine months of 2017 resulted in increases in interest expense of $10 million and $14 million, relative to the corresponding periods in 2016. ChargesIncome from our fair value hedges resulted in increases of interest expense of $13 million and $35 million during the third quarter and first nine months of 2017.
Other Income, Net—Other income, net of $114 million in the third quarter of 2017 reflects an increase of $95 million over the prior year period largely due to a $108 million gain on the sale of our 27% interest in our Geosel joint venture, which was recognized by our O&P–EAI segment.
Other income, net of $173 million in the first nine months of 2017 increased by $69 million relative to the same period in 2016. In the first nine months of 2017, we recognized the gain on the sale of our joint venture discussed above, a $31 million gain on the sale of our Lake Charles, Louisiana site, which was recognized by our O&P–Americas segment, and a $21 million non-cash gainequity investments in our O&P–EAI segment relateddriven primarily by higher margins due to the eliminationincreased demand.
Income TaxTaxes
Our effective income tax rate fluctuates based on, among other factors, 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 and equity earnings of joint ventures.ended March 31, 2020. 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 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.
Compared with the third quarter of 2016, the higher effective tax rate for the third quarter of 2017 was primarily attributable to changes in pretax income in countries with varying statutory tax rates (1.1%), prior year adjustments to ourthe remeasurement of U.S. deferred tax liabilities (1.1%that occurred in the prior year as a result of the CARES Act (-20.9%), and an increase in foreign currency exchange gains (0.5%return to accrual adjustments primarily from a tax benefit associated with a step-up of certain Italian assets to fair market value (-11.3%),. These drivers were partially offset by an increase inthe reduced relative impact of our tax rate drivers, primarily exempt income, (-0.9%) and an increase in U.S. domestic production activity deduction (-0.9%due to increased pre-tax earnings (7.1%). Compared with the first nine months of 2016, the higher effective tax rate for the first nine months of 2017 was primarily attributable to changes in valuation allowances (0.6%), changes in pretax income in countries with varying statutory tax rates (0.4%), a decrease in exempt income (0.4%), and prior year adjustments to our deferred tax liabilities (0.3%), partially offset by an increase in U.S. domestic production activity deduction (-0.3%).
We monitor income tax developments (including, for example, the U.S. tax reform proposals and the European Union’s state aid investigations) in countries where we conduct business. Recently, there has been an increase in attention, both in the U.K. and globally, to the tax practices of multinational companies, including proposals by the Organization for Economic Cooperation and Development with respect to base erosion and profit shifting. Such attention may result in legislative changes that could affect our tax rate. Management does not believe that recent changes in income tax laws will have a material impact on our Consolidated Financial Statements, although new or proposed changes to tax laws could affect our tax liabilities in the future. 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 an Executive Order, the Treasury Department reviewed these regulations and recently concluded to partially retain the regulations pending potential enactment of U.S. tax reform, which is expected to make it possible for the regulations to be revoked.
adjustments.
in the first quarter of 2021 and 2020, respectively. The fluctuations of the U.S. dollar against the euro and the periodic changes in benchmark interest rates, in the first quarter of 2021 and 2020, resulted in pre-tax gains of $86 million and $147 million, respectively, related to our cross-currency swaps. Pre-tax losses of $92 million and $53 million related to our cross-currency swaps were reclassified from Accumulated other comprehensive loss to Interest expense in the first quarter of 2021 and 2020, respectively. The remaining change pertains to our commodity cash flow hedges.
Our continuing operations are divided into five reportable segments: O&P–Americas; O&P–EAI; I&D; Refining; and Technology.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues: | ||||||||||||||||
O&P–Americas segment | $ | 2,449 | $ | 2,342 | $ | 7,600 | $ | 6,668 | ||||||||
O&P–EAI segment | 3,152 | 2,634 | 9,184 | 7,933 | ||||||||||||
I&D segment | 2,077 | 1,805 | 6,241 | 5,276 | ||||||||||||
Refining segment | 1,670 | 1,330 | 4,736 | 3,574 | ||||||||||||
Technology segment | 98 | 102 | 325 | 363 | ||||||||||||
Other, including intersegment eliminations | (930 | ) | (848 | ) | (2,737 | ) | (2,378 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 8,516 | $ | 7,365 | $ | 25,349 | $ | 21,436 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income (loss): | ||||||||||||||||
O&P–Americas segment | $ | 497 | $ | 582 | $ | 1,794 | $ | 1,935 | ||||||||
O&P–EAI segment | 460 | 447 | 1,410 | 1,228 | ||||||||||||
I&D segment | 329 | 240 | 868 | 822 | ||||||||||||
Refining segment | 10 | (56 | ) | (81 | ) | (139 | ) | |||||||||
Technology segment | 36 | 35 | 125 | 170 | ||||||||||||
Other, including intersegment eliminations | — | 1 | 3 | (4 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 1,332 | $ | 1,249 | $ | 4,119 | $ | 4,012 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Depreciation and amortization: | ||||||||||||||||
O&P–Americas segment | $ | 105 | $ | 87 | $ | 330 | $ | 265 | ||||||||
O&P–EAI segment | 60 | 58 | 177 | 171 | ||||||||||||
I&D segment | 69 | 62 | 206 | 201 | ||||||||||||
Refining segment | 49 | 40 | 133 | 123 | ||||||||||||
Technology segment | 11 | 10 | 30 | 31 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 294 | $ | 257 | $ | 876 | $ | 791 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from equity investments: | ||||||||||||||||
O&P–Americas segment | $ | 8 | $ | 12 | $ | 33 | $ | 54 | ||||||||
O&P–EAI segment | 69 | 67 | 202 | 232 | ||||||||||||
I&D segment | 4 | 2 | 5 | 3 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 81 | $ | 81 | $ | 240 | $ | 289 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Millions of dollars Other income (expense), net: O&P–Americas segment O&P–EAI segment I&D segment Refining segment Other, including intersegment eliminations Total EBITDA: O&P–Americas segment O&P–EAI segment I&D segment Refining segment Technology segment Other, including intersegment eliminations Total Three Months Ended
September 30, Nine Months Ended
September 30, 2017 2016 2017 2016 $ 6 $ 1 $ 41 $ 60 109 12 137 38 — — 1 1 (1 ) 6 1 7 — — (7 ) (2 ) $ 114 $ 19 $ 173 $ 104 $ 616 $ 682 $ 2,198 $ 2,314 698 584 1,926 1,669 402 304 1,080 1,027 58 (10 ) 53 (9 ) 47 45 155 201 — 1 (4 ) (6 ) $ 1,821 $ 1,606 $ 5,408 $ 5,196
below:
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues: | |||||||||||||||||||||||
| O&P–Americas segment | $ | 2,859 | $ | 1,792 | |||||||||||||||||||
| O&P–EAI segment | 3,047 | 2,224 | |||||||||||||||||||||
| I&D segment | 1,767 | 1,770 | |||||||||||||||||||||
| APS segment | 1,270 | 1,096 | |||||||||||||||||||||
| Refining segment | 1,126 | 1,448 | |||||||||||||||||||||
| Technology segment | 165 | 122 | |||||||||||||||||||||
| Other, including intersegment eliminations | (1,152) | (958) | |||||||||||||||||||||
| Total | $ | 9,082 | $ | 7,494 | |||||||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||
| O&P–Americas segment | $ | 687 | $ | 238 | |||||||||||||||||||
| O&P–EAI segment | 259 | 135 | |||||||||||||||||||||
| I&D segment | 88 | 131 | |||||||||||||||||||||
| APS segment | 104 | 70 | |||||||||||||||||||||
| Refining segment | (130) | (314) | |||||||||||||||||||||
| Technology segment | 82 | 47 | |||||||||||||||||||||
| Other, including intersegment eliminations | (2) | (3) | |||||||||||||||||||||
| Total | $ | 1,088 | $ | 304 | |||||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||||||||
| O&P–Americas segment | $ | 143 | $ | 124 | |||||||||||||||||||
| O&P–EAI segment | 53 | 53 | |||||||||||||||||||||
| I&D segment | 80 | 70 | |||||||||||||||||||||
| APS segment | 28 | 44 | |||||||||||||||||||||
| Refining segment | 19 | 42 | |||||||||||||||||||||
| Technology segment | 12 | 9 | |||||||||||||||||||||
| Total | $ | 335 | $ | 342 | |||||||||||||||||||
| Income (loss) from equity investments: | |||||||||||||||||||||||
| O&P–Americas segment | $ | 30 | $ | 2 | |||||||||||||||||||
| O&P–EAI segment | 95 | (3) | |||||||||||||||||||||
| I&D segment | 12 | 2 | |||||||||||||||||||||
| APS segment | — | (1) | |||||||||||||||||||||
| Total | $ | 137 | $ | — | |||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Other income (loss), net: | |||||||||||||||||||||||
| O&P–Americas segment | $ | 7 | $ | 2 | |||||||||||||||||||
| O&P–EAI segment | 5 | 4 | |||||||||||||||||||||
| I&D segment | 2 | — | |||||||||||||||||||||
| APS segment | 3 | — | |||||||||||||||||||||
| Refining segment | 1 | — | |||||||||||||||||||||
| Other, including intersegment eliminations | 7 | (6) | |||||||||||||||||||||
| Total | $ | 25 | $ | — | |||||||||||||||||||
| EBITDA: | |||||||||||||||||||||||
| O&P–Americas segment | $ | 867 | $ | 366 | |||||||||||||||||||
| O&P–EAI segment | 412 | 189 | |||||||||||||||||||||
| I&D segment | 182 | 203 | |||||||||||||||||||||
| APS segment | 135 | 113 | |||||||||||||||||||||
| Refining segment | (110) | (272) | |||||||||||||||||||||
| Technology segment | 94 | 56 | |||||||||||||||||||||
| Other, including intersegment eliminations | 5 | (9) | |||||||||||||||||||||
| Total | $ | 1,585 | $ | 646 | |||||||||||||||||||
olefin margins.
2020 approximately 60% of the raw materials used in our North American crackers was ethane.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues | $ | 2,449 | $ | 2,342 | $ | 7,600 | $ | 6,668 | ||||||||
Income from equity investments | 8 | 12 | 33 | 54 | ||||||||||||
EBITDA | 616 | 682 | 2,198 | 2,314 | ||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 2,859 | $ | 1,792 | |||||||||||||||||||
| Income from equity investments | 30 | 2 | |||||||||||||||||||||
| EBITDA | 867 | 366 | |||||||||||||||||||||
2020.
Better product availability2021 compared to the thirdfirst quarter andof 2020 which resulted in a revenue increase of 50% in the first nine monthsquarter of 2016, which was negatively affected by expansion at2021. Volume improvements resulted in a revenue increase of 10% in the first quarter of 2021 primarily due to a full quarter of results associated with our Corpus Christi, Texas facility and turnaround activities, led to higher olefins sales volumes. These increased volumes, which wereLouisiana Joint Venture partially offset by a decreasethe effects of unusually cold temperatures and associated electrical power outages that led to shutdowns of our manufacturing facilities in olefins and polyolefins sales volumes resulting from reduced production related to Hurricane Harvey, were responsible for revenue increases of 3% and 2%, respectively, in the third quarter and first nine months of 2017.
Texas.
Margins2020. First quarter of 2020 results included a $111 million LCM inventory valuation charge primarily driven by a decline in the thirdprice of heavy liquids and ethylene during the quarter. The absence of a similar charge in the first quarter were lower than the prior year period due to a 6 cents per pound decline in olefins spreads driven equally by lower average ethylene sales prices and increased cost of ethylene production. This decline was offset in part by a 5 cents per pound increase in polyethylene spreads due to the lower cost of ethylene feedstock. This net decrease in margins2021 resulted in a 7% reduction30% change in third quarter 2017 EBITDA. The declinefirst full quarter of results for our newly formed Louisiana Joint Venture improved EBITDA by 36% during the quarter.
InEBITDA in the first nine monthsquarter of 2017, margins were lower compared to the first nine months of 20162021, largely due to decreasesimproved margins attributed to higher price spreads over propylene in olefins and polypropylene spreads of 1 cent per pound and 6 cents per pound, respectively. These lower margins, which primarily reflect the impact of the increased cost of ethylene and propylene feedstocks, resulted in an 8% decline in EBITDA compared to the first nine monthsquarter of 2016. Lower2021. Higher income from our equity investments relativeled to the prior year period resultedincreases in a 1% decline in EBITDA. The net impactEBITDA of the gain on sale of our wholly owned Argentine subsidiary7% in the first quarter of 2016 and the first quarter 2017 gain on sale of the Lake Charles, Louisiana site also resulted2021 mainly attributable to improved results at our polypropylene joint venture in a 1% decline in EBITDA compared to the prior year. These decreases were partly offset by a 5% improvement in EBITDA primarily because of the higher olefins volumes in the first nine months 2017 discussed above.
Mexico.
EBITDA in the first nine months of 2017 includes a $108 million gain on the third quarter 2017 sale of our 27% interest in Geosel and the beneficial impact of $21 million related to the elimination of an obligation associated with a lease. In the first nine months of 2016, EBITDA reflected gains totaling $11 million from the sales of our joint venture in Japan and idled assets in Australia recognized in the third quarter and a $21 million gain from the sale of our wholly owned Argentine subsidiary.
olefin margins.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues | $ | 3,152 | $ | 2,634 | $ | 9,184 | $ | 7,933 | ||||||||
Income from equity investments | 69 | 67 | 202 | 232 | ||||||||||||
EBITDA | 698 | 584 | 1,926 | 1,669 | ||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 3,047 | $ | 2,224 | |||||||||||||||||||
| Income (loss) from equity investments | 95 | (3) | |||||||||||||||||||||
| EBITDA | 412 | 189 | |||||||||||||||||||||
2020.
Foreign exchange impacts that, on average, were favorable for the third quarter of 20172021. Volume improvements resulted in a revenue increase of 4% compared to12% in the thirdfirst quarter of 2016.
2021 from strong polymer demand. Favorable foreign exchange impacts resulted in a revenue increase of 7% in the first quarter of 2021.
In the third quarter of 2017,2020
An increase in olefin margins driven by higher ethylene and co-product sales prices was partly offset in the first nine months of 2017 by a 4 cents per pound decrease in European polyethylene spreads due to a more balanced European market. This net increase resulted in a 6% improvement in EBITDA in the first nine monthsquarter of 20172021.
Intermediates and Derivatives Segment
Overview—Higher EBITDA for our I&D segment in the third quarter and first nine months of 2017 relative to the third quarter and first nine months of 2016 reflects stronger margins for intermediate chemicals products supported by industry outages and increased Asia demand, partially offset by the negative impacts of turnarounds at our Botlek, Netherlands, PO/TBA and Channelview, Texas, methanol facilities on sales. Improved PO and derivative results also benefited the third quarter of 2017. EBITDA for the third quarter and first nine months was also negatively impacted by reduced sales volumes due to Hurricane Harvey.
derivatives.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues | $ | 2,077 | $ | 1,805 | $ | 6,241 | $ | 5,276 | ||||||||
Income from equity investments | 4 | 2 | 5 | 3 | ||||||||||||
EBITDA | 402 | 304 | 1,080 | 1,027 | ||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 1,767 | $ | 1,770 | |||||||||||||||||||
| Income from equity investments | 12 | 2 | |||||||||||||||||||||
| EBITDA | 182 | 203 | |||||||||||||||||||||
Higher2020. Lower sales volumes resulted in a 17% decline in sales, primarily driven by a decline in production due to the impact of unusually cold temperatures and associated electrical power outages that led to shutdowns of our manufacturing facilities in Texas. This decrease was largely offset by higher average sales prices in the thirdfirst quarter and first nine months of 20172021 for most products as sales prices generally correlate with crude oil prices, which reflect the impacts of higher feedstock and energy costs and recent industry supply constraints, were responsible for revenue increases of 14% and 19%, respectively. These increases were partially offset by a revenue decrease of 1% in each of the third quarter and first nine months of 2017, primarily due to lower sales volumes for oxyfuels and related products. This volume driven decline was largely due to two major turnarounds at our Botlek, Netherlands, and Channelview, Texas, facilities, and to a lesser extent,on average, increased compared to the negative effect of Hurricane Harvey on the operations of our U.S. Gulf Coast facilities.
The remaining changesame period in revenues reflects2020. This increase in average sales prices resulted in a 14% increase in revenue. Favorable foreign exchange impacts that, on average, were favorable foralso increased revenue by 3% in the thirdfirst quarter of 2017.
2021.
Higher margins for intermediate chemicals and PO and derivatives led to a 35% improvement in third quarter 2017 EBITDA relative to the third quarter of 2016. PO and derivative margins were2020. In the first quarter of 2020 EBITDA for our I&D segment included a $78 million LCM inventory valuation charge primarily driven by increased seasonal demand supported by industry outages, while intermediate chemicals margins benefited from increased sales prices due to tight supply.a decline in the price of various gasoline blending components and butane during the quarter. The impactabsence of lower volumes discussed abovea similar charge in the first quarter 2021 resulted in a 3%38% change in EBITDA.
Higher intermediate chemicals margins driven by higher average sales prices were the main driver of a 9% increase in EBITDA in the first nine monthsquarter of 2017, more than offsetting2021. Approximately 60% of this decline was driven by a 4%decrease in margins due to lower blending premium over gasoline prices, higher feedstock costs and higher utility costs related to Texas weather events. The remaining decrease was due to lower volumes driven by Texas weather events and lower gasoline demand. Declines in propylene oxide and derivatives results led to an EBITDA decrease of 12% in the first quarter of 2021. This decrease was a result of lower volumes driven by Texas weather events as discussed above and planned maintenance. Approximately half of this volume decrease was offset by margin improvements due to tight market supply. Intermediate chemicals results declined, contributing to a 10% decrease in EBITDA stemmingprimarily due to a decrease in margins due to higher feedstock costs. Higher income from our equity investments led to increases in EBITDA of 5% in the impactfirst quarter of 2021 mainly attributable to improved results at our joint venture in China. Favorable foreign exchange impacts increased EBITDA by 4% in the first quarter of 2021.
Refiningthan previously estimated, due to reduced scope of work and associated downtime for the maintenance.
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 1,270 | $ | 1,096 | |||||||||||||||||||
| Income (loss) from equity investments | — | (1) | |||||||||||||||||||||
| EBITDA | 135 | 113 | |||||||||||||||||||||
2021, EBITDA changed 12% during the quarter. Favorable foreign exchange impacts increased EBITDA by 6% in the first quarter 2021.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues | $ | 1,670 | $ | 1,330 | $ | 4,736 | $ | 3,574 | ||||||||
EBITDA | 58 | (10 | ) | 53 | (9 | ) | ||||||||||
Heavy crude processing rates, thousands of barrels per day | 240 | 209 | 233 | 192 | ||||||||||||
Market margins, dollars per barrel | ||||||||||||||||
Light crude oil – 2-1-1 | $ | 16.71 | $ | 11.46 | $ | 13.94 | $ | 10.58 | ||||||||
Light crude – Maya differential | 5.10 | 7.52 | 6.71 | 8.74 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Maya 2-1-1 | $ | 21.81 | $ | 18.98 | $ | 20.65 | $ | 19.32 | ||||||||
|
|
|
|
|
|
|
| |||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 1,126 | $ | 1,448 | |||||||||||||||||||
| EBITDA | (110) | (272) | |||||||||||||||||||||
| Thousands of barrels per day | |||||||||||||||||||||||
| Heavy crude oil processing rates | 152 | 226 | |||||||||||||||||||||
| Market margins, dollars per barrel | |||||||||||||||||||||||
| Brent - 2-1-1 | $ | 10.57 | $ | 7.43 | |||||||||||||||||||
| Brent - Maya differential | 4.75 | 9.79 | |||||||||||||||||||||
| Total Maya 2-1-1 | $ | 15.32 | $ | 17.22 | |||||||||||||||||||
Higher product prices led to revenue increases of 23% and 29%, respectively, relative to the comparative periods in 2016 due to average crude oil price increases of approximately $8 and $11 per barrel in the third quarter and first nine months of 2017, respectively.2020. Heavy crude oil processing rates increaseddecreased during the first quarter of 2021 due to planned and unplanned outages, including the effects of unusually cold temperatures and associated electrical power outages that led to shutdowns of our manufacturing facilities in Texas. This decline in sales volumes resulted in a 32% reduction in revenue. This decrease was partially offset by 15% and 21%higher product prices, which led to a revenue increase of 10% due to an average Brent crude oil price increase of approximately $10 per barrel in the thirdfirst quarter and first nine months of 2017, respectively, leading to volume driven revenue increases of 3% and 4% during those same periods.
2021.
Higher production accounted for approximately 20% of the improvement in EBITDA2020. First quarter 2020 results included a $192 million LCM inventory valuation charge primarily driven by a decline in the third quarterprice of 2017crude oil and allrefined products, the absence of the improvement in EBITDA for the first nine months of 2017. Crude oil processing rates in 2017 were higher than 2016, as the 2016 periods were negatively impacted by a coker unit fire in the second quarter and planned turnaround activity on a crude unit and a coker unit processing trainsimilar charge in the first quarter. Downtime at crude units reducedquarter 2021 resulted in a 71% change in EBITDA. This increase in the first quarter of 2021 was partially offset by a 7% decrease in EBITDA due to lower heavy crude oil processing rates driven by the impact of facility outages as discussed above and lower demand for transportation fuels. Margin declines resulted in both 2016 comparison periods.
Refining margins, which increaseda 4% decrease in EBITDA driven by a decrease in the Maya 2-1-1 market margin due to industry outages related to Hurricane Harvey, accounted for approximately 80%tighter heavy oil supply and a decrease in refined product demand as well as higher costs of the Renewable Identification Numbers (“RINs”).
Technology Segment
Overview—EBITDA for the Technology segment was relatively unchanged in the third quarter of 2017 compared to the third quarter 2016. A decline in EBITDA in the first nine months of 2017 reflects lower licensing revenues, partially offset by higher catalyst sales volumes,2021 compared to the first nine monthsquarter of 2016.
2020, primarily due to higher licensing revenues.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
Millions of dollars | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales and other operating revenues | $ | 98 | $ | 102 | $ | 325 | $ | 363 | ||||||||
EBITDA | 47 | 45 | 155 | 201 | ||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||||||||||||||
| Sales and other operating revenues | $ | 165 | $ | 122 | |||||||||||||||||||
| EBITDA | 94 | 56 | |||||||||||||||||||||
Revenue decreases in the third quarter of 2% and 4%, respectively, were attributable to catalyst sales volumes and average sales prices that were lower compared to the third quarter of 2016. A decline in process licenses issued in prior periods also resulted in a revenue decrease of 3% in the third quarter of 2017. These decreases were offset in part by a revenue increase of 5% driven by foreign exchange impacts that, on average, were favorable in the third quarter of 2017.
A decline in2020. Higher licensing revenues was responsible for a revenue decrease of 14%from more contracts reaching significant milestones in the first nine months of 2017 relative to the corresponding period in 2016. This decrease was partially offset by revenue increases in the first nine months of 2017 of 3% and 1%, respectively, related to increased catalyst sales volumes and higher average sales prices for catalysts.
EBITDA—EBITDA increased by $2 million, or 4%, in the third quarter of 2017 compared to the third quarter of 2016, and decreased by $46 million, or 23%, in the first nine months of 20172021 compared to the first nine monthsquarter of 2016.
The benefit from higher2020 resulted in a 41% increase in EBITDA. Higher catalyst margins,volumes resulted in a 14% increase in EBITDA. Foreign exchange impacts, which was reduced roughly one half by lower licensing and services margins,on average, were favorable led to a 9% increase in third quarter 2017 EBITDA. This net margin improvement was partly offset by a 5% volume-driven decrease resulting from lower catalyst volumes in the third quarter of 2017 relative to the corresponding prior year period. Lower licensing and services margins were largely responsible for a 27% EBITDA decrease in the first nine monthsquarter of 2017. This decline was partly offset by a 4% improvement in EBITDA resulting from an increase in catalyst volumes during the first nine months2021.
| Nine Months Ended September 30, | ||||||||
Millions of dollars | 2017 | 2016 | ||||||
Source (use) of cash: | ||||||||
Operating activities | $ | 3,724 | $ | 3,893 | ||||
Investing activities | (1,254 | ) | (1,530 | ) | ||||
Financing activities | (2,191 | ) | (2,567 | ) | ||||
| Three Months Ended March 31, | |||||||||||
| Millions of dollars | 2021 | 2020 | |||||||||
| Cash provided by (used in) : | |||||||||||
| Operating activities | $ | 571 | $ | 542 | |||||||
| Investing activities | (59) | (663) | |||||||||
| Financing activities | (782) | 884 | |||||||||
Cash of $3,893 million generated in the first nine months of 2016 primarily reflected earnings adjustedpayments for non-cash itemsemployee bonuses, income taxes, income from equity investments, and cash used by the main components of working capital. The non-cash items in 2016 included a $78 million gain related tocapital—Accounts receivable, Inventories and Accounts payable.
The2021, the main components of working capital used $626 million of cash driven primarily by an increase in Accounts receivable and Inventories partially offset by an increase in Accounts payable. The increase in Accounts receivable was driven by higher revenues for our O&P—Americas, O&P—EAI, and APS segments. The increase in Inventory was primarily driven by higher inventory volumes, due to lower crude oil consumption as a result of $226Texas weather events, and prices within our Refining segment. The increase in Accounts payables was primarily driven by increased raw material costs.
I&D segment.
Joint Venture Activity—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 2016,2020 we received proceeds of $72$226 million and $1 million, respectively, from our investments in equity securities. Additionally, w
Financial Instruments Activity—Upon expiration2020 and a decline in September 2017 and August 2017, we settled foreign currency contracts, each with a notional value of €275 million, which were designated as net investment hedges of our investmentsother plant improvement projects in foreign subsidiaries. Payments to and proceeds from our counterparties resulted in a net cash outflow of $49 million.
Upon expiration in September 2016 and March 2016, we settled foreign currency contracts with notional values of €450 million and €750 million, respectively, which were designated as net investment hedges of our investments in foreign subsidiaries. Payments to and proceeds from our counterparties resulted in net cash outflows totaling $61 million.2021. See Note 612 to the Consolidated Financial Statements for additional information regarding these foreign currency contracts.
Sale of Wholly Owned Subsidiary—In February 2016, we received net cash proceeds of $137 million for the sale of our wholly owned Argentine subsidiary.
Capital Expenditures—The following table summarizes capital expenditures for the periods presented:
| Nine Months Ended September 30, | ||||||||
Millions of dollars | 2017 | 2016 | ||||||
Capital expenditures by segment: | ||||||||
O&P–Americas | $ | 546 | $ | 1,026 | ||||
O&P–EAI | 123 | 189 | ||||||
I&D | 263 | 246 | ||||||
Refining | 184 | 179 | ||||||
Technology | 21 | 24 | ||||||
Other | 9 | 12 | ||||||
|
|
|
| |||||
Consolidated capital expenditures of continuing operations | $ | 1,146 | $ | 1,676 | ||||
|
|
|
| |||||
In the first nine months of 2017 and 2016, our capital expenditures included construction related to our new Hyperzone polyethylene plant at our La Porte, Texas facility, construction related to our new PO/TBA plant in Texas, 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 for our O&P–Americas in the first nine months of 2017 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.
spending by segment.
We made net repayments of $178 million andfirst quarter 2020, we received net proceeds of $177$516 million, in the first nine months of 2017 and 2016, respectively, through the issuance and repurchase of commercial paper instruments under our commercial paper program.
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 million of 1.875% guaranteed notes due 2022 and received net proceeds of $812 million. The net proceeds from these notes were used for general corporate purposes, including repurchases of LyondellBasell N.V.’s ordinary shares.
At September 30, 2017, we held $584which includes $1,197 million of cash in jurisdictions outside of the U.S., principally in the United Kingdom. There are currently no legal or economic restrictions that would materially would impede our transfers of cash.
At September 30, 2017,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 had total debt, including current maturities, of $8,915 million,may incur cash and $551 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.
non-cash charges, which could be material in the period in which they are incurred.
For additional information related
In May 2017, our shareholders approved a proposal to authorize us to repurchase up to an additional 10%, or approximately 40 million of our outstanding ordinary shares through November 2018 (“May 2017 Share Repurchase Program”). As a result, the authorization of the remaining unpurchased shares under the share repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was superseded. Our share repurchase program 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.serve export demand. During the first nine
months of 2017, we have purchased approximately 10 million shares under these programs for approximately $845 million. As of October 24, 2017, we had approximately 34 million shares remaining under the current authorization. The timing and amount of additional shares repurchased will be determined by our Management Board based on its evaluation of market conditions and other factors. For additional information related to our share repurchase programs, see Note 10 to the Consolidated Financial Statements.
We may repay or redeem our debt, including purchases of our outstanding bonds in the open market, using cash and cash equivalents, cash from our short-term investments and tri-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 and non-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 service and other funding requirements with 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. Cash and cash equivalents, cash from our short-term investments and tri-party repurchase agreements, cash from operating activities, proceeds from the issuance of debt, or a combination thereof, may be used to fund the repurchase 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.
We believe that our available liquidity and cash from operating activities provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due.
CURRENT BUSINESS OUTLOOK
Hurricane Harvey reduced inventories across the petrochemical industry and contributed to further delays in the startup of new U.S. capacity. As we look toward the remainder of 2017, we continue to see firm olefin and polyolefin markets as supply chains restock from the production lost during Hurricane Harvey. New polyethylene capacity is aligned with seasonal demand and supportive of improved2021, increased mobility should drive higher demand for ethylene while the industry awaits the startup of additional crackers during 2018. Global demandgasoline and jet fuel, improving margins for polyolefins remains strong.
Most intermediateour Refining and derivatives products are well-positioned as we enter the fourthI&D segments. We also expect that moderating feedstock costs will increase second quarter and are expected to balance typical seasonal weakness in oxyfuels. U.S. Gulf Coast refining markets appear to have reset favorably after the hurricanes with stronger distillate spreads and improved heavy to light differentials.
We estimate that additional lost sales and expenses from the storm, primarily related to the outage atmargins for our La Porte, Texas facility will negatively impact fourth quarter 2017 results by approximately $100 million. Unplanned maintenance on the cracker at our Wesseling, Germany facility in October 2017 is expected to negatively impact our O&P–EAI segment’s fourth quarter 2017 results by approximately $40 million.
Advanced Polymer Solutions segment.
March 31, 2021.
The following is a description of environmental proceedings to which a governmental authority is a party and potential monetary sanctions are reasonably likely to be $100,000 or more.
In March 2017, the Texas Commission on Environmental Quality (the “TCEQ”) issued a proposed Agreed Order 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.
| Issuer Purchases of Equity Securities | ||||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||
July 1 – July 31 | 1,771,723 | $ | 85.32 | 1,771,723 | 34,865,351 | |||||||||||
August 1 – August 31 | 1,278,308 | $ | 88.19 | 1,278,308 | 33,587,043 | |||||||||||
September 1 – September 30 | 16,327 | $ | 88.91 | 16,327 | 33,570,716 | |||||||||||
|
|
|
| |||||||||||||
Total | 3,066,358 | $ | 86.53 | 3,066,358 | 33,570,716 | |||||||||||
|
|
|
| |||||||||||||
| Exhibit Number | Description | |||||||
| 10.1*+ | ||||||||
| 10.3*+ | ||||||||
| 22* | ||||||||
| 31.1* | ||||||||
| XBRL Instance | ||||||||
| XBRL Schema Document | ||||||||
| XBRL Calculation Linkbase Document | ||||||||
| XBRL Definition Linkbase Document | ||||||||
| XBRL Labels Linkbase Document | ||||||||
| XBRL Presentation Linkbase Document | ||||||||
| 104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
| LYONDELLBASELL INDUSTRIES N.V. | ||||||||||
| Date: | April 30, 2021 | /s/ | ||||||||
| Executive Vice President and | ||||||||||
| Chief Financial Officer | ||||||||||
| (Principal Financial and Accounting Officer) | ||||||||||
56