Table of Contents
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form10-Q

(Mark One)

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

For the quarterly period ended September 30, 2017

2021

or

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

For the transition period fromto

Commission file number:001-34726

LYONDELLBASELL INDUSTRIES N.V.

(Exact name of registrant as specified in its charter)

The Netherlands98-0646235

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1221 McKinney St.,

Suite 300

Houston, Texas

USA 77010

4th Floor, One Vine Street

London

W1J0AH

The United Kingdom

Delftseplein 27E

3013 AA Rotterdam

The Netherlands

(Addresses of registrant’s principal executive offices)

Netherlands98-0646235
(713)309-7200(State or other jurisdiction of
incorporation or organization)
+44 (0) 207 220 2600+31 (0)10 275 5500(I.R.S. Employer
Identification No.)

1221 McKinney St.,4th Floor, One Vine Street
Suite 300LondonDelftseplein 27E
Houston,TexasW1J0AH3013AARotterdam
USA77010United KingdomNetherlands
(Addresses of registrant’s principal executive offices)
(713)309-7200+44 (0)207220 2600+31 (0)102755 500
(Registrant’s telephone numbers, including area codes)

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange On Which Registered
Ordinary Shares, €0.04 Par ValueLYBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  

¨

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

¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” and “emerging growth company” inRule 12b-2 of the Exchange Act.

Large accelerated filerxAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

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

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes ☐ No 

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  ☐

x

The registrant had 394,460,282332,783,944 ordinary shares, €0.04 par value, outstanding at October 24, 201727, 2021 (excluding 183,979,8817,361,634 treasury shares).



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Table of Contents
PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF INCOME

   Three Months Ended
September 30,
  Nine Months Ended
September 30,
 

Millions of dollars, except earnings per share

      2017          2016      2017  2016 

Sales and other operating revenues:

     

Trade

  $8,312  $7,191  $24,775  $20,879 

Related parties

   204   174   574   557 
  

 

 

  

 

 

  

 

 

  

 

 

 
   8,516   7,365   25,349   21,436 

Operating costs and expenses:

     

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 
  

 

 

  

 

 

  

 

 

  

 

 

 
   7,184   6,116   21,230   17,424 

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 continuing operations before equity investments and income taxes

   1,357   1,200   3,911   3,892 

Income from equity investments

   81   81   240   289 
  

 

 

  

 

 

  

 

 

  

 

 

 

Income from continuing operations before income taxes

   1,438   1,281   4,151   4,181 

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 

Net (income) loss attributable to non-controlling interests

   1   (1  2   (1
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income attributable to the Company shareholders

  $1,057  $952  $2,985  $3,073 
  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings per share:

     

Net income (loss) attributable to the Company shareholders —

     

Basic:

     

Continuing operations

  $2.67  $2.31  $7.49  $7.26 

Discontinued operations

   —     (0.01  (0.03  (0.01
  

 

 

  

 

 

  

 

 

  

 

 

 
  $2.67  $2.30  $7.46  $7.25 
  

 

 

  

 

 

  

 

 

  

 

 

 

Diluted:

     

Continuing operations

  $2.67  $2.31  $7.49  $7.24 

Discontinued operations

   —     (0.01  (0.03  (0.01
  

 

 

  

 

 

  

 

 

  

 

 

 
  $2.67  $2.30  $7.46  $7.23 
  

 

 

  

 

 

  

 

 

  

 

 

 

 Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars, except earnings per share2021202020212020
Sales and other operating revenues:
Trade$12,401 $6,587 $32,586 $19,261 
Related parties299 189 757 555 
12,700 6,776 33,343 19,816 
Operating costs and expenses:
Cost of sales10,109 5,885 26,463 17,647 
Impairment of long-lived assets— 582 — 582 
Selling, general and administrative expenses313 259 927 842 
Research and development expenses30 27 91 79 
10,452 6,753 27,481 19,150 
Operating income2,248 23 5,862 666 
Interest expense(126)(122)(366)(336)
Interest income10 
Other (expense) income, net(12)23 27 27 
Income (loss) from continuing operations before equity investments and income taxes2,111 (73)5,531 367 
Income from equity investments104 62 389 123 
Income (loss) from continuing operations before income taxes2,215 (11)5,920 490 
Provision for (benefit from) income taxes452 (125)1,028 (82)
Income from continuing operations1,763 114 4,892 572 
Loss from discontinued operations, net of tax(1)— (1)— 
Net income1,762 114 4,891 572 
Dividends on redeemable non-controlling interests(2)(2)(5)(5)
Net income attributable to the Company shareholders$1,760 $112 $4,886 $567 
Earnings per share:
Net income attributable to the Company shareholders —
Basic$5.25 $0.33 $14.58 $1.69 
Diluted$5.25 $0.33 $14.57 $1.69 
See Notes to the Consolidated Financial Statements.



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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

   Three Months Ended
September 30,
  Nine Months Ended
September 30,
 

Millions of dollars

      2017          2016          2017          2016     

Net income

  $1,056  $953  $2,983  $3,074 

Other comprehensive income (loss), net of tax –

     

Financial derivatives:

     

Loss on cash flow hedges arising during the period

   (100  (69  (260  (258

Reclassification adjustment included in net income

   74   5   232   52 

Income tax benefit

   (5  (16  (8  (57
  

 

 

  

 

 

  

 

 

  

 

 

 

Financial derivatives, net of tax

   (21  (48  (20  (149
  

 

 

  

 

 

  

 

 

  

 

 

 

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

     

Unrealized holding gains (losses) arising during the period

   2   (3  (7  (9

Income tax benefit

   —     (2  (2  (2
  

 

 

  

 

 

  

 

 

  

 

 

 

Unrealized gains (losses) on available-for-sale securities, net of tax

   2   (1  (5  (7
  

 

 

  

 

 

  

 

 

  

 

 

 

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

     

Unrealized holding gains arising during the period

   5   —     14   —   

Income tax expense (benefit)

   —     —     —     —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Unrealized gains on available-for-sale securities held by equity investees, net of tax

   5   —     14   —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Defined pension and other postretirement benefit plans:

     

Reclassification adjustment for amortization of prior service cost included in net income

   —     1   —     1 

Reclassification adjustment for net actuarial loss included in net income

   10   8   29   23 

Income tax expense

   3   4   9   9 
  

 

 

  

 

 

  

 

 

  

 

 

 

Defined pension and other postretirement benefit plans, net of tax

   7   5   20   15 
  

 

 

  

 

 

  

 

 

  

 

 

 

Foreign currency translation adjustments:

     

Unrealized gains arising during the period

   11   17   112   73 

Reclassification adjustment included in net income

   —     7   —     7 

Income tax benefit

   (12  —     (31  (7
  

 

 

  

 

 

  

 

 

  

 

 

 

Foreign currency translation adjustments, net of tax

   23   24   143   87 
  

 

 

  

 

 

  

 

 

  

 

 

 

Total other comprehensive income (loss)

   16   (20  152   (54
  

 

 

  

 

 

  

 

 

  

 

 

 

Comprehensive income

   1,072   933   3,135   3,020 

Comprehensive (income) loss attributable to non-controlling interests

   1   (1  2   (1
  

 

 

  

 

 

  

 

 

  

 

 

 

Comprehensive income attributable to the Company shareholders

  $1,073  $932  $3,137  $3,019 
  

 

 

  

 

 

  

 

 

  

 

 

 

Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Net income$1,762 $114 $4,891 $572 
Other comprehensive income (loss), net of tax –
Financial derivatives35 75 132 (289)
Unrealized (losses) gains on available-for-sale debt securities— — (1)
Defined benefit pension and other postretirement benefit plans28 10 56 31 
Foreign currency translations(97)86 (127)(47)
Total other comprehensive (loss) income, net of tax(34)171 60 (304)
Comprehensive income1,728 285 4,951 268 
Dividends on redeemable non-controlling interests(2)(2)(5)(5)
Comprehensive income attributable to the Company shareholders$1,726 $283 $4,946 $263 
See Notes to the Consolidated Financial Statements.



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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

Millions of dollars

  September 30,
2017
  December 31,
2016
 

ASSETS

   

Current assets:

   

Cash and cash equivalents

  $1,204  $875 

Restricted cash

   7   3 

Short-term investments

   1,295   1,147 

Accounts receivable:

   

Trade, net

   3,097   2,716 

Related parties

   178   126 

Inventories

   4,177   3,809 

Prepaid expenses and other current assets

   1,104   923 
  

 

 

  

 

 

 

Total current assets

   11,062   9,599 

Property, plant and equipment at cost

   16,039   14,635 

Less: Accumulated depreciation

   (5,302  (4,498
  

 

 

  

 

 

 

Property, plant and equipment, net

   10,737   10,137 

Investments and long-term receivables:

   

Investment in PO joint ventures

   428   415 

Equity investments

   1,644   1,575 

Other investments and long-term receivables

   19   20 

Goodwill

   570   528 

Intangible assets, net

   480   550 

Other assets

   303   618 
  

 

 

  

 

 

 

Total assets

  $25,243  $23,442 
  

 

 

  

 

 

 

Millions of dollarsSeptember 30, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$1,893 $1,763 
Restricted cash
Short-term investments36 702 
Accounts receivable:
Trade, net5,003 3,291 
Related parties248 150 
Inventories4,982 4,344 
Prepaid expenses and other current assets1,819 1,382 
Total current assets13,986 11,634 
Operating lease assets1,789 1,492 
Property, plant and equipment22,575 21,484 
Less: Accumulated depreciation(7,739)(7,098)
Property, plant and equipment, net14,836 14,386 
Equity investments4,888 4,729 
Goodwill1,894 1,953 
Intangible assets, net666 751 
Other assets603 458 
Total assets$38,662 $35,403 
See Notes to the Consolidated Financial Statements.







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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED BALANCE SHEETS

Millions of dollars, except shares and par value data

  September 30,
2017
  December 31,
2016
 

LIABILITIES AND EQUITY

   

Current liabilities:

   

Current maturities of long-term debt

  $3  $2 

Short-term debt

   381   594 

Accounts payable:

   

Trade

   2,138   2,028 

Related parties

   597   501 

Accrued liabilities

   1,493   1,415 
  

 

 

  

 

 

 

Total current liabilities

   4,612   4,540 

Long-term debt

   8,531   8,385 

Other liabilities

   2,326   2,113 

Deferred income taxes

   2,447   2,331 

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

   31   31 

Additional paid-in capital

   10,201   10,191 

Retained earnings

   14,207   12,282 

Accumulated other comprehensive loss

   (1,359  (1,511

Treasury stock, at cost, 183,982,022 and 174,389,139 ordinary shares, respectively

   (15,754  (14,945
  

 

 

  

 

 

 

Total Company share of stockholders’ equity

   7,326   6,048 

Non-controlling interests

   1   25 
  

 

 

  

 

 

 

Total equity

   7,327   6,073 
  

 

 

  

 

 

 

Total liabilities and equity

  $25,243  $23,442 
  

 

 

  

 

 

 

Millions of dollars, except shares and par value dataSeptember 30, 2021December 31, 2020
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY
Current liabilities:
Current maturities of long-term debt$$
Short-term debt563 663 
Accounts payable:
Trade3,494 2,398 
Related parties678 550 
Accrued liabilities2,665 1,883 
Total current liabilities7,408 5,502 
Long-term debt12,945 15,286 
Operating lease liabilities1,518 1,222 
Other liabilities2,383 2,957 
Deferred income taxes2,478 2,332 
Commitments and contingencies00
Redeemable non-controlling interests116 116 
Shareholders’ equity:
Ordinary shares, €0.04 par value, 1,275 million shares authorized, 333,627,352
 and 334,015,220 shares outstanding, respectively
19 19 
Additional paid-in capital6,029 5,986 
Retained earnings8,216 4,440 
Accumulated other comprehensive loss(1,883)(1,943)
Treasury stock, at cost, 6,518,226 and 6,030,408 ordinary shares, respectively(581)(531)
Total Company share of shareholders’ equity11,800 7,971 
Non-controlling interests14 17 
Total equity11,814 7,988 
Total liabilities, redeemable non-controlling interests and equity$38,662 $35,403 
See Notes to the Consolidated Financial Statements.






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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

   Nine Months Ended
September 30,
 

Millions of dollars

  2017  2016 

Cash flows from operating activities:

   

Net income

  $2,983  $3,074 

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

   

Depreciation and amortization

   876   791 

Amortization of debt-related costs

   12   12 

Charges related to repayment of debt

   49   —   

Equity investments –

   

Equity income

   (240  (289

Distributions of earnings, net of tax

   190   249 

Deferred income taxes

   217   307 

Gain on sales of business and equity method investments

   (108  (84

Gain on sale of assets

   (31  (5

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

   

Accounts receivable

   (278  (323

Inventories

   (219  23 

Accounts payable

   121   74 

Other, net

   152   64 
  

 

 

  

 

 

 

Net cash provided by operating activities

   3,724   3,893 
  

 

 

  

 

 

 

Cash flows from investing activities:

   

Expenditures for property, plant and equipment

   (1,146  (1,676

Proceeds from disposal of assets

   29   —   

Payments for repurchase agreements

   (512  (500

Proceeds from repurchase agreements

   381   603 

Purchases of available-for-sale securities

   (653  (607

Proceeds from maturities of available-for-sale securities

   499   665 

Purchases of held-to-maturity securities

   —     (76

Proceeds from maturities of held-to-maturity securities

   75   —   

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

   (21  (65

Net proceeds from sale of business and equity method investments

   155   209 

Proceeds from settlement of net investment hedges

   609   1,295 

Payments for settlement of net investment hedges

   (658  (1,356

Other, net

   (12  (22
  

 

 

  

 

 

 

Net cash used in investing activities

   (1,254  (1,530
  

 

 

  

 

 

 

Nine Months Ended
September 30,
Millions of dollars20212020
Cash flows from operating activities:
Net income$4,891 $572 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization1,016 1,056 
Impairment of long-lived assets— 582 
Amortization of debt-related costs21 12 
Share-based compensation50 43 
Inventory valuation charges— 163 
Equity investments—
Equity income(389)(123)
Distributions of earnings, net of tax169 104 
Deferred income tax provision (benefit)(135)
Changes in assets and liabilities that provided (used) cash:
Accounts receivable(1,915)152 
Inventories(741)452 
Accounts payable1,139 (90)
Other, net368 (127)
Net cash provided by operating activities4,616 2,661 
Cash flows from investing activities:
Expenditures for property, plant and equipment(1,285)(1,673)
Purchases of available-for-sale debt securities— (270)
Proceeds from sales and maturities of available-for-sale debt securities346 90 
Purchases of equity securities— (267)
Proceeds from equity securities309 313 
Acquisition of equity method investment(104)(472)
Proceeds from settlement of net investment hedges358 — 
Payments for settlement of net investment hedges(355)— 
Other, net(66)(28)
Net cash used in investing activities(797)(2,307)
Cash flows from financing activities:
Repurchases of Company ordinary shares(78)(4)
Dividends paid - common stock(1,110)(1,053)
Purchase of non-controlling interest— (30)
Issuance of long-term debt— 2,492 
Payments of debt issuance costs— (18)
Repayments of long-term debt(2,275)(500)
Debt extinguishment costs(57)— 
Issuance of short-term debt— 521 
Repayments of short-term debt— (504)
Net (repayments of) proceeds from commercial paper(103)194 
Collateral paid for interest rate derivatives— (238)
Proceeds from settlement of cash flow hedges— 346 
Other, net(4)(14)
Net cash (used in) provided by financing activities(3,627)1,192 
Effect of exchange rate changes on cash(59)50 
Increase in cash and cash equivalents and restricted cash133 1,596 
Cash and cash equivalents and restricted cash at beginning of period1,765 888 
Cash and cash equivalents and restricted cash at end of period$1,898 $2,484 
See Notes to the Consolidated Financial Statements.



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LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTS OF CASH FLOWS

   Nine Months Ended
September 30,
 

Millions of dollars

  2017  2016 

Cash flows from financing activities:

   

Repurchases of Company ordinary shares

   (866  (2,501

Dividends paid

   (1,060  (1,049

Issuance of long-term debt

   990   812 

Repayment of long-term debt

   (1,000  —   

Debt extinguishment costs

   (65  —   

Net proceeds from (repayments of) commercial paper

   (178  177 

Payments of debt issuance costs

   (8  (5

Other, net

   (4  (1
  

 

 

  

 

 

 

Net cash used in financing activities

   (2,191  (2,567
  

 

 

  

 

 

 

Effect of exchange rate changes on cash

   54   17 
  

 

 

  

 

 

 

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

   333   (187

Cash and cash equivalents and restricted cash at beginning of period

   878   931 
  

 

 

  

 

 

 

Cash and cash equivalents and restricted cash at end of period

  $1,211  $744 
  

 

 

  

 

 

 

SHAREHOLDERS’ EQUITY

Ordinary SharesAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Company
Share of
Shareholders’
Equity
Non-
Controlling
Interests
Millions of dollarsIssuedTreasury
Balance, June 30, 2021$19 $(494)$6,011 $6,837 $(1,849)$10,524 $14 
Net income— — — 1,762 — 1,762 — 
Other comprehensive loss— — — — (34)(34)— 
Share-based compensation— 18 (1)— 19 — 
Dividends - common stock ($1.13 per share)— — — (380)— (380)— 
Dividends - redeemable non-controlling interests ($15.00 per share)— — — (2)— (2)— 
Repurchases of Company ordinary shares— (89)— — — (89)— 
Balance, September 30, 2021$19 $(581)$6,029 $8,216 $(1,883)$11,800 $14 
Ordinary SharesAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Company
Share of
Shareholders’
Equity
Non-
Controlling
Interests
Millions of dollarsIssuedTreasury
Balance, June 30, 2020$19 $(548)$5,958 $4,188 $(2,259)$7,358 $19 
Net income— — — 114 — 114 — 
Other comprehensive income— — — — 171 171 — 
Share-based compensation— 17 (8)— 17 — 
Dividends - common stock ($1.05 per share)— — — (352)— (352)— 
Dividends - redeemable non-controlling interests ($15.00 per share)— — — (2)— (2)— 
Distributions to non-controlling interests— — — — — — (2)
Balance, September 30, 2020$19 $(540)$5,975 $3,940 $(2,088)$7,306 $17 
See Notes to the Consolidated Financial Statements.




6

Table of Contents
LYONDELLBASELL INDUSTRIES N.V.

CONSOLIDATED STATEMENTSTATEMENTS OF STOCKHOLDERS’SHAREHOLDERS’ EQUITY

   

 

Ordinary Shares

  Additional
Paid-in

Capital
   Retained
Earnings
  Accumulated
Other
Comprehensive

Income (Loss)
  Company
Share of
Stockholders’

Equity
  Non-
Controlling

Interests
 

Millions of dollars

  Issued   Treasury       

Balance, December 31, 2016

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

Net income (loss)

   —      —     —      2,985   —     2,985   (2

Other comprehensive income

   —      —     —      —     152   152   —   

Share-based compensation

   —      36   9    —     —     45   —   

Dividends ($2.65 per share)

   —      —     —      (1,060  —     (1,060  —   

Repurchases of Company ordinary shares

   —      (845  —      —     —     (845  —   

Purchase of non-controlling interest

   —      —     1    —     —     1   (22
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Balance, September 30, 2017

  $31   $(15,754 $10,201   $14,207  $(1,359 $7,326  $1 
  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

  

 

 

  

 

 

 

Ordinary SharesAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Company
Share of
Shareholders’
Equity
Non-
Controlling
Interests
Millions of dollarsIssuedTreasury
Balance, December 31, 2020$19 $(531)$5,986 $4,440 $(1,943)$7,971 $17 
Net income— — — 4,891 — 4,891 — 
Other comprehensive income— — — — 60 60 — 
Share-based compensation— 39 43 — — 82 — 
Dividends - common stock ($3.31 per share)— — — (1,110)— (1,110)— 
Dividends - redeemable non-controlling interests ($45.00 per share)— — — (5)— (5)— 
Repurchases of Company ordinary shares— (89)— — — (89)— 
Sales of non-controlling interest— — — — — — (3)
Balance, September 30, 2021$19 $(581)$6,029 $8,216 $(1,883)$11,800 $14 
Ordinary SharesAdditional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Company
Share of
Shareholders’
Equity
Non-
Controlling
Interests
Millions of dollarsIssuedTreasury
Balance, December 31, 2019$19 $(580)$5,954 $4,435 $(1,784)$8,044 $19 
Net income— — — 572 — 572 — 
Other comprehensive loss— — — — (304)(304)— 
Share-based compensation— 44 14 (9)— 49 — 
Dividends - common stock ($3.15 per share)— — — (1,053)— (1,053)— 
Dividends - redeemable non-controlling interests ($45.00 per share)— — — (5)— (5)— 
Repurchases of Company ordinary shares— (4)— — — (4)— 
Purchase of non-controlling interest— — — — — 
Distributions to non-controlling interests— — — — — — (2)
Balance, September 30, 2020$19 $(540)$5,975 $3,940 $(2,088)$7,306 $17 
See Notes to the Consolidated Financial Statements.



7

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


TABLE OF CONTENTS

     Page 

1.

 

Basis of Presentation

   9 

2.

 

Accounting and Reporting Changes

   9 

3.

 

Accounts Receivable

   12 

4.

 

Inventories

   12 

5.

 

Debt

   13 

6.

 

Financial Instruments and Fair Value Measurements

   16 

7.

 

Pension and Other Postretirement Benefits

   24 

8.

 

Income Taxes

   25 

9.

 

Commitments and Contingencies

   26 

10.

 

Stockholders’ Equity

   27 

11.

 

Per Share Data

   31 

12.

 

Segment and Related Information

   33 

Page
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.


8

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1.Basis of Presentation

STATEMENTS


1.    Basis of Presentation
LyondellBasell Industries N.V., is a limited liability company (Naamloze Vennootschap) incorporated under Dutch law by deed of incorporation dated October 15, 2009. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell Industries N.V. together with its consolidated subsidiaries (collectively “LyondellBasell(“LyondellBasell N.V.”),. LyondellBasell N.V. is a worldwide manufacturer of chemicals and polymers, a refiner of crude oil, a significant producer of gasoline blending components and a developer and licensor of technologies for the production of polymers. Unless otherwise indicated, the “Company,” “we,” “us,” “our” or similar words are used to refer to LyondellBasell N.V.

The accompanying unaudited Consolidated Financial Statements 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. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. 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 of normal recurring adjustments, considered necessary for a fair presentation 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 Changes

2020. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement have been included. These statements contain some amounts that are based upon management estimates and judgments. Future actual results could differ from such current estimates. The results for interim periods are not necessarily indicative of results for the entire year.

2.    Accounting and Reporting Changes
Recently Adopted Guidance

Intangibles-Goodwill and Other—In January 2017,

The following table provides a brief description of recently adopted Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”) issued 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
StandardDescription
ASU 2020-01, Clarifying the Interactions between Topic 321, Topic 323, Equity Method and Joint Ventures, and Topic 815, Derivatives and Hedging
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. The standard also 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.
ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity
This guidance simplifies the accounting for convertible instruments and the application of the derivatives scope exception for contracts in an entity’s own equity. The standard also amends the accounting for convertible instruments in the diluted earnings per share calculation and requires enhanced disclosures of convertible instruments and contracts in an entity’s own equity. The guidance is effective for fiscal years beginning after December 15, 2021 and may be applied on a modified or fully retrospective basis.

The early adoption of this guidance on a modified retrospective basis from January 1, 2021 did not have a material impact on our Consolidated Financial Statements.


9

Table 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 to 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 not have a material impact on our Consolidated Financial Statements.

Inventories—In July 2015, the 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 inventory 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, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this ASU are effective for public entities for annual and interim periods beginning after December 15, 2016. Adoption of the amendments in this guidance in the first quarter of 2017 did not have a material impact on our Consolidated Financial Statements.

Statement of Cash Flows—In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The updated accounting requirement is intended to

Contents


LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

reduce diversity in practice in the classification 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 adoption 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.



StandardDescription
ASU 2020-09, Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762
This guidance amends and supersedes SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10762 related to financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities and affiliates whose securities are pledged as collateral for registered securities. The guidance is effective for annual and interim periods ending after January 4, 2021.

The adoption of this guidance from January 1, 2021 did not have a material impact on our Consolidated Financial Statements.
Accounting Guidance Issued But Not Adopted as of September 30, 2017

Revenue Recognition—In May 2014, the FASB2021

There are no ASUs 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 amountand not yet adopted 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 guidanceexpected to have a material impact on our Consolidated Financial Statements.

3.    Revenues
Contract Balances—Contract liabilities were $250 million and $194 million at September 30, 2021 and December 31, 2020, respectively. Revenue recognized in each reporting period, included in the contract liability balance at the beginning of the period, was immaterial.
Disaggregation of Revenues—The following table presents our revenues disaggregated by key products:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues:
Olefins and co-products$1,453 $568 $3,729 $1,695 
Polyethylene2,705 1,423 7,469 4,159 
Polypropylene2,162 1,103 5,876 3,173 
Propylene oxide and derivatives832 421 2,059 1,217 
Oxyfuels and related products1,088 573 2,533 1,669 
Intermediate chemicals910 486 2,436 1,434 
Compounding and solutions1,019 834 3,134 2,295 
Advanced polymers261 169 748 501 
Refined products2,050 1,003 4,784 3,193 
Other220 196 575 480 
Total$12,700 $6,776 $33,343 $19,816 



10

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

Leases—In February 2016,



The following table presents our revenues disaggregated by geography, based upon 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 impactlocation 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 IncomeGains 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 Receivable

customer:

Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues:
United States$6,387 $2,983 $16,089 $8,587 
Germany886 494 2,585 1,533 
China572 369 1,693 914 
Italy489 290 1,339 884 
Mexico496 285 1,133 868 
France384 213 1,040 644 
The Netherlands423 197 1,039 562 
Japan432 161 993 639 
Poland300 205 841 617 
Other2,331 1,579 6,591 4,568 
Total$12,700 $6,776 $33,343 $19,816 
4.    Accounts Receivable
Our allowance for doubtful accounts receivable which isare reflected in the Consolidated Balance Sheets, as a reductionnet of accounts receivable, totaled $17allowance for credit losses, of $7 million and $16$15 million at September 30, 20172021 and December 31, 2016,2020, respectively.

4.Inventories

5.    Inventories
Inventories consisted of the following components:

Millions of dollars

  September 30,
2017
   December 31,
2016
 

Finished goods

  $2,705   $2,575 

Work-in-process

   188    154 

Raw materials and supplies

   1,284    1,080 
  

 

 

   

 

 

 

Total inventories

  $4,177   $3,809 
  

 

 

   

 

 

 

Millions of dollarsSeptember 30, 2021December 31, 2020
Finished goods$3,329 $2,816 
Work-in-process167 144 
Raw materials and supplies1,486 1,384 
Total inventories$4,982 $4,344 
Our inventories are stated at the lower of cost or market (“LCM”). Cost is determined using the last-in, first-out (“LIFO”) inventory valuation methodology, which means that the most recently incurred costs are charged to cost of sales and inventories are valued at the earliest acquisition costs. Market is determined based on an assessment of the current estimated replacement cost and selling price of the inventory. In periods where the market price of our inventory declines substantially, cost values of inventory may be higher than the market value, and as a result we adjust the value of inventory to market value. Fluctuations in the prices of crude oil, natural gas and correlated products from period to period may result in the recognition of charges to adjust the value of inventory to the LCM in periods of falling prices and the reversal of those charges in subsequent interim periods, within the fiscal year, as market prices recover.
During the first nine months of 2020, we recognized an LCM inventory valuation charge of $163 million related to the decline in pricing for many of our raw material and finished goods inventories since December 31, 2019. During the third quarter of 2020, we recognized an LCM inventory valuation benefit of $160 million, largely driven by the recovery of market pricing for many of our raw material and finished goods inventories during the quarter.


11

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

5.Debt




6.    Debt
Long-term loans, notes and other long-term debt, net of unamortized discount and debt issuance cost, consisted of the following:

   September 30,  December 31, 

Millions of dollars

  2017  2016 

Senior Notes due 2019, $2,000 million, 5.0% ($3 million of debt issuance cost)

  $959  $1,906 

Senior Notes due 2021, $1,000 million, 6.0% ($8 million of debt issuance cost)

   990   988 

Senior Notes due 2024, $1,000 million, 5.75% ($8 million of debt issuance cost)

   992   991 

Senior Notes due 2055, $1,000 million, 4.625% ($16 million of discount; $11 million of debt issuance cost)

   973   972 

Guaranteed Notes due 2044, $1,000 million, 4.875% ($11 million of discount; $10 million of debt issuance cost)

   979   979 

Guaranteed Notes due 2043, $750 million, 5.25% ($21 million of discount; $7 million of debt issuance cost)

   722   721 

Guaranteed Notes due 2023, $750 million, 4.0% ($6 million of discount; $4 million of debt issuance cost)

   740   739 

Guaranteed Notes due 2027, $300 million, 8.1%

   300   300 

Guaranteed Notes due 2022, €750 million, 1.875% ($3 million of discount; $3 million of debt issuance cost)

   880   785 

Guaranteed Notes due 2027, $1,000 million, 3.5% ($10 million of discount; $8 million of debt issuance cost)

   992   —   

Other

   7   6 
  

 

 

  

 

 

 

Total

   8,534   8,387 

Less current maturities

   (3  (2
  

 

 

  

 

 

 

Long-term debt

  $8,531  $8,385 
  

 

 

  

 

 

 

Gains (losses) related to fair

Millions of dollarsSeptember 30, 2021December 31, 2020
Senior Notes due 2024, $1,000 million, 5.75% ($3 million of debt issuance cost)$997 $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— 1,448 
Guaranteed Notes due 2023, $750 million, 4.0% ($1 million of discount; $1 million of debt issuance cost)423 745 
Guaranteed Floating Rate Notes due 2023, $650 million ($3 million of debt issuance cost)647 646 
Guaranteed Notes due 2025, $500 million, 2.875%— 496 
Guaranteed Notes due 2025, $500 million, 1.25% ($1 million of discount; $3 million of debt issuance cost)495 495 
Guaranteed Notes due 2026, €500 million, 0.875% ($1 million of discount; $3 million of debt issuance cost)575 608 
Guaranteed Notes due 2027, $1,000 million, 3.5% ($6 million of discount; $5 million of debt issuance cost)1,079 1,090 
Guaranteed Notes due 2027, $300 million, 8.1%300 300 
Guaranteed Notes due 2030, $500 million, 3.375% ($1 million of discount; $3 million of debt issuance cost)499 495 
Guaranteed Notes due 2030, $500 million, 2.25% ($4 million of discount; $4 million of debt issuance cost)491 492 
Guaranteed Notes due 2031, €500 million, 1.625% ($6 million of discount; $3 million of debt issuance cost)570 602 
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% ($19 million of discount; $7 million of debt issuance cost)724 723 
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)983 984 
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 
Other24 28 
Total12,953 15,294 
Less current maturities(8)(8)
Long-term debt$12,945 $15,286 


12

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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


Fair value hedging adjustments associated with the fair value hedge accounting of our fixed-for-floating interest rate swaps for the applicable periods are as follows:

                        Cumulative 
      Three Months Ended   Nine Months Ended   Year Ended   Amount 
   Inception  September 30,   September 30,   December 31,   Since 

Millions of dollars

  Year  2017  2016   2017  2016   2016   Inception 

Senior Notes due 2019, 5.0%

  2014  $(4 $26   $(46 $11   $42   $38 

Senior Notes due 2021, 6.0%

  2016   2   —      (1  —      3    2 

Guaranteed Notes due 2027, 3.5%

  2017   —     —      (10  —      —      (10

These fair

Gains (Losses)Cumulative Fair Value
Hedging Adjustments Included
in Carrying Amount of Debt
Three Months Ended
September 30,
Nine Months Ended
September 30,
September 30,December 31,
Millions of dollars202120202021202020212020
Senior Notes due 2021, 6.0%$— $$— $(11)$— $— 
Guaranteed Notes due 2022, 1.875%— — — — — 
Guaranteed Notes due 2025, 1.25%— — — 
Guaranteed Notes due 2026, 0.875%(1)(2)— (2)
Guaranteed Notes due 2027, 3.5%12 (69)(90)(102)
Guaranteed Notes due 2030, 3.375%— (3)— (3)— 
Guaranteed Notes due 2030, 2.25%— — — 
Guaranteed Notes due 2050, 4.2%— — — 
Total$10 $$14 $(81)$(90)$(104)
Fair value adjustments are recognized in Interest expense in the Consolidated Statements of Income.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Short-term loans, notes and other short-term debt consisted of the following:

   September 30,   December 31, 

Millions of dollars

  2017   2016 

$2,500 million Senior Revolving Credit Facility

  $—     $—   

$900 million U.S. Receivables Securitization Facility

   —      —   

Commercial paper

   317    500 

Precious metal financings

   59    90 

Other

   5    4 
  

 

 

   

 

 

 

Total short-term debt

  $381   $594 
  

 

 

   

 

 

 

Millions of dollarsSeptember 30, 2021December 31, 2020
U.S. Receivables Facility$— $— 
Commercial paper397 500 
Precious metal financings159 140 
Other23 
Total Short-term debt$563 $663 
Long-Term Debt

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 Debt

Senior Revolving Credit FacilityIn 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.

At September 30, 2021, we had no borrowings or letters of credit outstanding and $2,104 million of unused availability under this facility.

Term Loan due 2022—In March 2019, LYB Americas Finance Company LLC, a wholly owned subsidiary of LyondellBasell Industries N.V., entered into a $4,000 million senior unsecured delayed draw term loan credit facility that matures in March 2022. Borrowings under the credit agreement were available through December 31, 2019, subsequent to which no further borrowings may be made under the agreement. Outstanding borrowings bear interest at either a base rate or LIBOR rate, as defined, plus in each case, an applicable margin determined by reference to LyondellBasell N.V.’s current credit ratings. During the nine months ended September 30, 2021, we repaid $1,450 million outstanding under our Term Loan due 2022.


13

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

The facility contains customary covenants and warranties, including specified restrictions on indebtedness and liens.



Guaranteed Notes due 2023In 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 $317July 2013, LYB International Finance B.V. issued $750 million of outstanding commercial paper, no outstanding letters4% guaranteed notes due 2023 at a discounted price of credit and no outstanding borrowings under this facility.

Commercial Paper Program—We have a commercial paper program under which98.678%. In June 2021, we may issue up to $2,500redeemed $325 million of privately placed, unsecured, short-term promissory notes (“commercial paper”). This program is backed by our $2,500the outstanding notes. In conjunction with the partial redemption, we recognized $25 million Senior Revolving Credit Facility. Proceeds fromof debt extinguishment costs which are reflected in Interest expense in the issuanceConsolidated Statements of commercial paper may be usedIncome. The debt extinguishment costs include $23 million paid for general corporate purposes, including dividendsmake-whole premiums, fees and share repurchases. Interest rates onexpenses related to the commercial paper outstanding at September 30, 2017 are based on the termredemption of the notes and range from 141non-cash charges of $2 million for the write-off of unamortized debt discount and issuance costs.

Guaranteed Notes due 2025—In April 2020, LYB International Finance III, LLC (“LYB Finance III”) issued $500 million of 2.875% guaranteed notes due 2025 at a discounted price of 99.911%. In September 2021, we redeemed the $500 million outstanding notes. In conjunction with the redemption, we recognized $37 million of debt extinguishment costs which are reflected in Interest expense in the Consolidated Statements of Income. The debt extinguishment costs include $34 million paid for make-whole premiums, fees and expenses related to 155 basis points.

the redemption of the notes and non-cash charges of $3 million for the write-off of unamortized debt issuance costs.

Guaranteed Floating Rate Notes due 2023—In October 2020, LYB Finance III issued $650 million of guaranteed floating rate notes due 2023. In October 2021, we redeemed the $650 million outstanding notes. In conjunction with the redemption, we recognized $3 million of debt extinguishment costs related to the non-cash write-off of unamortized debt issuance costs.
Short-Term Debt
U.S. Receivables Securitization Facility—Our $900 million U.S. accounts receivable securitization facility, which expires in 2018,Receivables Facility has a purchase limit of $900 million in addition to a $300 million uncommitted accordion feature. In June 2021, we extended the term of the facility to June 2024 in accordance with the terms of the agreement. 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 term of the securitization facility may be extended 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.

At September 30, 2017, there were2021, we had no borrowings or letters of credit outstanding and $900 million unused availability 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”). Interest rates on the facility.

Othercommercial paper outstanding at September 30, 2021 are based on the terms of the notes and range from 0.13% to 0.17%. At September 30, 2021, we had $397 million of outstanding commercial paper.

Weighted Average Interest Rate—At September 30, 20172021 and December 31, 2016,2020, our weighted average interest raterates on outstanding short-termShort-term debt was 1.4%were 0.7% and 0.9%, respectively.

Additional Information
Debt Discount and Issuance Costs

In the nine months ended September 30, 2017 and 2016, amortization—Amortization of debt discounts and debt issuance costs resulted in amortization expense of $16$21 million and $12 million for the nine months ended September 30, 2021 and 2020, respectively, which is included in Interest expense in the Consolidated Statements of Income.

As of September 30, 2021, we are in compliance with our debt covenants.




14

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

6.Financial Instruments and Fair Value Measurements



7.    Financial Instruments and Fair Value Measurements
We are exposed to market risks, such as changes in commodity pricing, currency exchangeinterest rates and interestcurrency exchange rates. To manage the volatility related to these exposures, we selectively enter into derivative transactionscontracts pursuant to our risk management policies.

A summary of 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.

Cash and Cash Equivalents—At September 30, 2021 and December 31, 2020, we had marketable securities classified as Cash and cash equivalents of $707 million and $682 million, respectively.
Foreign Currency Gain (Loss)—Other income (expense), net, in the Consolidated Statements of Income includes foreign currency gains of $4 million and $2 million for the three and nine months ended September 30, 2021, respectively, and gains of $3 million and losses of $4 million for the three and nine months ended September 30, 2020, respectively.
Financial Instruments Measured at Fair Value on a Recurring Basis—The following table summarizes financial instruments outstanding 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 

Millions of dollars

  Amount   Value   Amount   Value   Classification 

Assets–

          

Derivatives designated as hedges:

          

Commodities

  $22   $—     $4   $—      Prepaid expenses and other current assets 

Commodities

   16    —      54    3    Other assets 

Foreign currency

   —      15    604    34    Prepaid expenses and other current assets 

Foreign currency

   2,000    70    2,439    282    Other assets 

Interest rates

   —      24    —      5    Prepaid expenses and other current assets 

Interest rates

   1,950    11    2,200    11    Other assets 
          

Derivatives not designated as hedges:

          

Commodities

   131    12    85    3    Prepaid expenses and other current assets 

Foreign currency

   32    —      11    —      Prepaid expenses and other current assets 

Non-derivatives:

          

Available-for-sale securities

   1,299    1,295    1,069    1,073    Short-term investments 
  

 

 

   

 

 

   

 

 

   

 

 

   

Total

  $5,450   $1,427   $6,466   $1,411   
  

 

 

   

 

 

   

 

 

   

 

 

   

 September 30, 2021December 31, 2020 
Millions of dollarsNotional AmountFair ValueNotional AmountFair ValueBalance Sheet
Classification
Assets–
Derivatives designated as hedges:
Commodities$35 $47 $19 $Prepaid expenses and other current assets
Commodities10 41 Other Assets
Foreign currency614 82 — 26 Prepaid expenses and other current assets
Foreign currency1,024 25 — — Other assets
Interest rates— — — Prepaid expenses and other current assets
Interest rates416 122 Other assets
Derivatives not designated as hedges:
Commodities288 38 71 Prepaid expenses and other current assets
Commodities— — Other assets
Foreign currency150 149 — Prepaid expenses and other current assets
Non-derivatives:
Available-for-sale debt securities— — 348 349 Short-term investments
Equity securities36 35 353 353 Short-term investments
Total$2,574 $245 $1,103 $739 


15

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

   September 30, 2017   December 31, 2016     
   Notional   Fair   Notional   Fair   Balance Sheet 

Millions of dollars

  Amount   Value   Amount   Value   Classification 

Liabilities–

          

Derivatives designated as hedges:

          

Commodities

  $59   $2   $—     $—      Accrued liabilities 

Commodities

   13    —      —      —      Other liabilities 

Foreign currency

   139    9    —      —      Accrued liabilities 

Foreign currency

   950    120    —      —      Other liabilities 

Interest rates

   2,050    42    1,400    20    Other liabilities 
          

Derivatives not designated as hedges:

          

Commodities

   192    16    103    11    Accrued liabilities 

Foreign currency

   631    1    28    1    Accrued liabilities 
          

Non-derivatives:

          

Performance share awards

   20    20    19    19    Accrued liabilities 

Performance share awards

   21    21    22    22    Other liabilities 
  

 

 

   

 

 

   

 

 

   

 

 

   

Total

  $4,075   $231   $1,572   $73   
  

 

 

   

 

 

   

 

 

   

 

 

   

All derivatives and available-for-sale securities in the tables above are classified as Level 2, except for



 September 30, 2021December 31, 2020 
Millions of dollarsNotional AmountFair ValueNotional AmountFair ValueBalance Sheet
Classification
Liabilities–
Derivatives designated as hedges:
Commodities$— $— $— $Accrued liabilities
Foreign currency855 101 1,213 146 Accrued liabilities
Foreign currency2,270 144 2,682 302 Other liabilities
Interest rates— — — Accrued liabilities
Interest rates1,600 228 1,000 343 Other liabilities
Derivatives not designated as hedges:
Commodities— 113 14 Accrued liabilities
Foreign currency842 16 76 Accrued liabilities
Total$5,570 $490 $5,084 $808 
As of September 30, 2021, our limited partnership investments included in our available-for-saleequity securities discussed below that are measured at fair value using the net asset value per share, (oror its equivalent)equivalent, practical expedient and have not been classified in the fair value hierarchy.

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.

At September 30, 2017,2021, our outstanding foreign currency andcontracts, not designated as hedges, mature from October 2021 to March 2022. Our commodity contracts, not designated as hedges, mature from October 20172021 to December 2017 and from October 2017 to June 2018, respectively.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2021.

Financial Instruments Not Measured at Fair Value on a Recurring Basis—The following table presents the carrying value and estimated fair value of our financial instruments that are not measured at fair value on a recurring basis 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 

Millions of dollars

  Carrying
Value
   Fair
Value
   Carrying
Value
   Fair
Value
 

Non-derivatives:

        

Assets:

        

Short-term loans receivable

  $561   $561   $369   $369 
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

        

Short-term debt

  $59   $67   $90   $98 

Long-term debt

   8,528    9,428    8,382    9,147 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $8,587   $9,495   $8,472   $9,245 
  

 

 

   

 

 

   

 

 

   

 

 

 

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 abovebelow are classified as Level 2. There were no transfers between Level 1 and Level 2

September 30, 2021December 31, 2020
Millions of dollarsCarrying
 Value
Fair
 Value
Carrying
 Value
Fair
Value
Non-derivatives:
Liabilities:
Short-term debt$159 $129 $140 $154 
Long-term debt12,929 14,493 15,266 17,290 
Total$13,088 $14,622 $15,406 $17,444 



16

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


Net Investment Hedges—The following table summarizes our net investment hedges outstanding for any of our financial instruments during the periods presented:
September 30, 2021December 31, 2020
Millions of euro/dollarsNotional ValueNotional ValueExpiration Date
Equivalent
US$
Equivalent
US$
Foreign currency2,367 $2,758 1,667 $1,890 2022 to 2030
In the first nine months ended September 30, 2017 and the year ended December 31, 2016.

Net Investment Hedges—In August 2017 and September 2017, forward exchangeof 2021, we entered into four foreign currency contracts and basis swaps with an aggregate notional value of €550€1,000 million that were designated as net investment hedges.

In July 2021, foreign currency contracts with an aggregate notional value of €300 million expired. Upon settlement of these foreign currency contracts, we paid €550€300 million ($658355 million at the expiry spot rate) to our counterparties and received $609$358 million from our counterparties.
Cash Flow Hedges—The $49following table summarizes our cash flow hedges outstanding for the periods presented:
September 30, 2021December 31, 2020
Millions of dollarsNotional ValueNotional ValueExpiration Date
Foreign currency$2,005 $2,005 2021 to 2027
Interest rates1,000 1,000 2023 to 2024
Commodities45 60 2021 to 2022
As of September 30, 2021 and December 31, 2020, Other assets include $238 million loss is reflectedof collateral held with our counterparties related to our forward-starting interest rate swaps; this amount represents the maximum amount of collateral required in foreign currency translation adjustmentsaccordance with the swap agreements. Related cash flows are included in Accumulated other comprehensive loss. Cash flows from the settlement of these foreign currency contracts are reported in Cash flows from investingfinancing activities in the Consolidated Statements of Cash Flows.

As of September 30, 2021, on a pre-tax basis, $6 million is scheduled to be reclassified from Accumulated other comprehensive loss as an increase to Interest expense over the next twelve months.
Fair Value Hedges—The following table summarizes our fair value hedges outstanding for the periods presented:
September 30, 2021December 31, 2020
Millions of dollarsNotional ValueNotional ValueExpiration Date
Interest rates$1,016 $122 2025 to 2030
In February 2017,the first nine months of 2021, we entered into €617 million of basisfixed-for-floating interest rate swaps to reducemitigate 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 andfair value associated with the spot rate changerisk of variability in the designated net investment.

In September 2016, €4503-month LIBOR rate component of $150 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, from3.375% guaranteed notes due 2030, $300 million of our counterparties.$1,000 million, 3.5% guaranteed notes due 2027, $150 million of our $500 million, 2.875% guaranteed notes due 2025, $150 million of our $500 million, 1.25% guaranteed notes due 2025 and $150 million of our $500 million, 2.25% guaranteed notes due 2030. The $6 million loss is reflected in foreign currency translation adjustments in Accumulated other comprehensive loss. Cash flows from the settlementfixed-rate and variable-rate components for these trades are settled semi-annually and quarterly, respectively.



17

Table 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 net

Contents


LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

investment hedges.



In addition, we had outstanding foreign-currency denominated debt,September 2021, upon the redemption of our $500 million, 2.875% guaranteed notes due 2025, the $150 million fixed-for-floating interest rate swap entered in April 2021 was dedesignated and concurrently redesignated as a partial-term hedge to mitigate the change in the fair value associated with notionalthe risk of variability in the 3-month LIBOR rate component of $150 million of our $1,000 million, 4.2% guaranteed notes due 2050.
Impact on Earnings and Other Comprehensive Income—The following tables summarize the pre-tax effect of derivative and non-derivative instruments recorded 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 September 30,
 Gain (Loss) Recognized in AOCIGain (Loss) Reclassified from AOCI to IncomeGain (Loss) Recognized in IncomeIncome Statement
Millions of dollars202120202021202020212020Classification
Derivatives designated as hedges:
Commodities$38 $$(14)$— $— $— Cost of sales
Foreign currency135 (125)(60)89 Interest expense
Interest rates17 102 (5)Interest expense
Derivatives not designated as hedges:
Commodities— — — — (1)Sales and other operating revenues
Commodities— — — — 49 42 Cost of sales
Foreign currency— — — — (32)(1)Other income (expense), net
Non-derivatives designated as hedges:
Long-term debt— (38)— — — — Other income (expense), net
Total$190 $(53)$(73)$90 $27 $49 
 Effects of Financial Instruments
Nine Months Ended September 30,
 Gain (Loss) Recognized in AOCIGain (Loss) Reclassified from AOCI to IncomeGain (Loss) Recognized in IncomeIncome Statement
Millions of dollars202120202021202020212020Classification
Derivatives designated as hedges:
Commodities$67 $$(18)$— $— $— Cost of sales
Foreign currency274 (47)(128)81 34 38 Interest expense
Interest rates117 (430)— 91 Interest expense
Derivatives not designated as hedges:
Commodities— — — — 18 Sales and other operating revenues
Commodities— — — — 72 116 Cost of sales
Foreign currency— — — — (61)(11)Other income (expense), net
Non-derivatives designated as hedges:
Long-term debt— (36)— — — — Other income (expense), net
Total$458 $(507)$(142)$84 $63 $238 


18

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


The derivative amounts totaling €750 million ($850 million),excluded from the assessment of effectiveness for foreign currency contracts designated as a net investment hedge athedges recognized in other comprehensive income for the three and nine months ended September 30, 2021 were gains of $1 million and $5 million, respectively, and for the three and nine months ended September 30, 2020 were gains of $1 million and losses of less than $1 million, respectively.
The derivative amounts excluded from the assessment of effectiveness for foreign currency contracts designated as net investment hedges recognized in Interest expense for the three and nine months ended September 30, 2021 were gains of $1 million and $6 million, respectively, and for the three and nine months ended September 30, 2020 were gains of $1 million and $8 million, respectively.
The pre-tax effect of the periodic receipt of fixed interest and payment of variable interest associated with our fixed-for-floating interest rate swaps resulted in $2 million and $3 million decrease in Interest expense during each of the three and nine months ended September 30, 20172021, respectively, and December 31, 2016.

There was no ineffectiveness recorded for any of these net investment hedging relationshipsless than $1 million and $3 million decrease in interest expense during the three and nine months ended September 30, 2017 and 2016.

Cash Flow Hedges—The following table summarizes our cash flow hedges outstanding at September 30, 2017 and December 31, 2016:

   September 30, 2017   December 31, 2016     

Millions of dollars

  Notional
Value
   Notional
Value
   Expiration
Date
 

Foreign currency

  $2,300   $2,300    2021 to 2027 

Interest rates

   1,000    1,000    2049 

Commodities

   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 $1 million and $1 million during the nine months ended September 30, 2017 and 2016.

As of September 30, 2017, less than $1 million (on a pretax basis) and $2 million (on a pretax basis) are scheduled to be reclassified as decreases to interest expense and cost of sales respectively over the next twelve months.

Fair Value Hedges—In February 2017, we entered into U.S. dollar fixed-for-floating interest rate swaps to mitigate changes in the fair value of our $1,000 million 3.5% guaranteed notes due 2027 associated with the risk of variability in the 3 Month USD LIBOR rate (the benchmark interest rate). The fixed-rate and variable-rate are settled semi-annually and quarterly,2020, respectively.

In the third quarter of 2014, we entered into U.S. dollar fixed-for-floating interest rate swaps to mitigate changes in the fair value of our $2,000 million 5% senior notes due 2019. In March 2017, concurrent with the redemption of $1,000 million of our outstanding 5% senior notes due 2019, we dedesignated the related $2,000 million fair value hedge and terminated swaps in the notional amount of $1,000 million. At the same time, we redesignated the remaining $1,000 million notional amount of swaps as a fair value hedge of the remaining $1,000 million of 5% senior notes outstanding. 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)

Impact on Earnings and Other Comprehensive Income—The following table summarizes the pre-tax effect of derivative instruments and non-derivative instruments on Other comprehensive income 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
 

Millions of dollars

      2017          2016          2017           2016           2017          2016      

Derivatives designated as hedges:

          

Commodities

  $3  $—    $—     $—     $—    $—     Cost of sales 

Foreign currency

   (155  (52  74    5    —     —     Other income, net 

Interest rates

   (5  (21  —      —      3   (12  Interest expense 

Derivatives not designated as hedges:

          

Commodities

   —     —     —      —      (6  (4  
Sales and other
operating revenues
 
 

Commodities

   —     —     —      —      6   (5  Cost of sales 

Foreign currency

   —     —     —      —      (6  1   Other income, net 

Non-derivatives designated as hedges:

          

Long-term debt

   (30  (2  —      —      —     —    
  

 

 

  

 

 

  

 

 

   

 

 

   

 

 

  

 

 

  

Total

  $(187 $(75 $74   $5   $(3 $(20 
  

 

 

  

 

 

  

 

 

   

 

 

   

 

 

  

 

 

  

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL 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
 

Millions of dollars

      2017          2016          2017           2016           2017          2016      

Derivatives designated as hedges:

          

Commodities

  $(4 $—    $—     $—     $—    $—     Cost of sales 

Foreign currency

   (403  (134  232    52    —     —     Other income, net 

Interest rates

   (23  (175  —      —      20   31   Interest expense 

Derivatives not designated as hedges:

          

Commodities

   —     —     —      —      (9  6   
Sales and other
operating revenues
 
 

Commodities

   —     —     —      —      (31  (27  Cost of sales 

Foreign currency

   —     —     —      —      (7  13   Other income, net 

Non-derivatives designated as hedges:

          

Long-term debt

   (95  12   —      —      —     —    
  

 

 

  

 

 

  

 

 

   

 

 

   

 

 

  

 

 

  

Total

  $(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.

The pre-tax effect of the gains (losses) recognized in income for our fixed-for-floating interest rate swaps includes the net value of interest accrued of $5 million and $18 million during the three and nine months ended September 30, 2017 and $6 million and $17 million for the three and nine months ended 2016, respectively.

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Investments in 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 

Millions of dollars

  Cost   Gross
Unrealized
Gains
   Gross
Unrealized
Losses
  Fair
Value
 

Available-for-sale securities:

       

Commercial paper

  $177   $—     $—    $177 

Bonds

   621    1    —     622 

Certificates of deposit

   150    —      —     150 

Time deposits

   1    —      —     1 

Limited partnership investments

   350    1    (6  345 
  

 

 

   

 

 

   

 

 

  

 

 

 

Total available-for-sale securities

  $1,299   $2   $(6 $1,295 
  

 

 

   

 

 

   

 

 

  

 

 

 

   December 31, 2016 

Millions of dollars

  Cost   Gross
Unrealized
Gains
   Gross
Unrealized
Losses
   Fair
Value
 

Available-for-sale securities:

        

Commercial paper

  $232   $—     $—     $232 

Bonds

   141    —      —      141 

Certificates of deposit

   347    1    —      348 

Limited partnership investments

   350    2    —      352 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total available-for-sale securities

  $1,070   $3   $—     $1,073 
  

 

 

   

 

 

   

 

 

   

 

 

 

Held-to-maturity securities:

        

Time deposits

  $74   $—     $—     $74 
  

 

 

   

 

 

   

 

 

   

 

 

 

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.

debt securities:    

Millions of dollarsCostGross Unrealized GainsGross Unrealized LossesFair Value
Debt securities at September 30, 2021$— $— $— $— 
Debt securities at December 31, 2020348 — 349 
No allowance for credit losses related to 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, 20172021 and for the year ended December 31, 2016.

As of September 30, 2017, our available-for-sale securities had the following maturities: commercial paper securities held by the Company had maturities between five and six months; bonds had maturities between seven and thirty-seven months; certificates of 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)

2020.

The proceeds from maturities and sales of our available-for-sale debt securities during the three and nine months ended September 30, 20172021 and 20162020 are summarized in the following table:

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 

Millions of dollars

      2017           2016           2017           2016     

Proceeds from maturities of securities

  $12   $8   $499   $665 

Proceeds from sales of securities

   —      —      —      —   

No gain

Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Proceeds from maturities of available-for-sale debt securities$55 $— $346 $— 
Proceeds from sales of available-for-sale debt securities— 90 — 90 
We had no available-for-sale debt securities which were in a continuous unrealized loss position for less than or loss was realizedgreater than twelve months as of September 30, 2021 and December 31, 2020.
Investments in connectionEquity Securities—Our investment in equity securities consists of an investment in a limited partnership with a notional amount of $36 million and $353 million as of September 30, 2021 and December 31, 2020, respectively. The carrying amount approximates fair value. The investment is carried at its net asset value as a practical expedient at September 30, 2021 and fair value at December 31, 2020. The investment is under an orderly voluntary liquidation by the salesfund administrator and we expect the investment to be fully liquidated by early 2022, during which time redemption or sale of the investment is restricted.


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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


We received proceeds of $45 million and $309 million related to our available-for-saleinvestments in equity securities during the three and nine months ended September 30, 20172021, respectively, and 2016.

During the nine months ended September 30, 2017, we had maturities of our held-to-maturity securities of $75 million. During$312 million and $313 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 and2020, respectively.

We recognized unrealized losses related to available-for-sale and held-to-maturity securities that were in a continuous unrealized loss position for less than and greater than twelve months as of September 30, 2017 and December 31, 2016:

   September 30, 2017 
   Less than 12 months  Greater than 12 months 

Millions of dollars

  Fair
Value
   Unrealized
Loss
  Fair
Value
   Unrealized
Loss
 

Available-for-sale securities:

       

Limited partnership investments

  $122   $(5 $105   $(2

   December 31, 2016 
   Less than 12 months   Greater than 12 months 

Millions of dollars

  Fair
Value
   Unrealized
Loss
   Fair
Value
   Unrealized
Loss
 

Available-for-sale securities:

        

Limited partnership investments

  $   $—     $105   $(3

Foreign Currency Gain (Loss)—Other income, net, in the Consolidated Statements of Income reflected losses of less than $1 million and $6 million foron our equity securities that were outstanding during the three and nine months ended September 30, 2017, respectively,2021, and a gain of $1 million and a loss of $5 million forno unrealized gains or losses were recognized during the three and nine months ended September 30, 2016, respectively.

Repurchase Agreements—At September 30, 2017 and December 31, 2016,2020.


8.    Income Taxes
For interim tax reporting, 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 Benefits

Net 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,
 

Millions of dollars

      2017          2016          2017          2016     

Service cost

  $11  $11  $35  $33 

Interest cost

   15   22   45   66 

Expected return on plan assets

   (30  (34  (91  (104

Actuarial and investment loss amortization

   5   5   16   15 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net periodic benefit costs

  $1  $4  $5  $10 
  

 

 

  

 

 

  

 

 

  

 

 

 

   Non-U.S. Plans 
   Three Months Ended
September 30,
  Nine Months Ended
September 30,
 

Millions of dollars

      2017          2016          2017          2016     

Service cost

  $9  $8  $28  $24 

Interest cost

   5   8   16   24 

Expected return on plan assets

   (4  (6  (13  (18

Actuarial and investment loss amortization

   4   2   11   6 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net periodic benefit costs

  $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,
 

Millions of dollars

      2017           2016           2017           2016     

Service cost

  $—     $—     $2   $2 

Interest cost

   3    3    7    9 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit costs

  $3   $3   $9   $11 
  

 

 

   

 

 

   

 

 

   

 

 

 

   Non-U.S. Plans 
   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 

Millions of dollars

      2017           2016           2017           2016     

Service cost

  $1   $—     $2   $1 

Interest cost

   —      —      1    1 

Actuarial loss amortization

   1    1    2    2 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit costs

  $2   $1   $5   $4 
  

 

 

   

 

 

   

 

 

   

 

 

 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8.Income Taxes

Ourestimate an annual effective income tax rate forwhich is applied to the three months ended September 30, 2017 was 26.4% compared with 25.4% foryear-to-date ordinary income (loss). Tax effects of significant unusual or infrequently occurring items are excluded from the three months ended September 30, 2016. For the nine months ended September 30, 2017, theestimated annual effective income tax rate was 27.8% compared with 26.4% forcalculation and recognized in the first nine months ended September 30, 2016. 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/gains or losses, the amount of exempt income, and changes in unrecognized tax benefits associated with uncertain tax positions.

Compared withpositions and changes in tax laws.

Our exempt income primarily includes interest income, export incentives, and equity earnings ofjoint ventures. Interest income earned by certain of our European subsidiaries through intercompany financings is taxed at rates substantially lower than the U.S. statutory rate. Export incentives relate to tax benefits derived from elections and structures available for U.S. exports. Equity earnings attributable to the earnings of our joint ventures, when paid through dividends to certain European subsidiaries, are exempt from all or portions of normal statutory income tax rates. We currently anticipate the favorable treatment for interest income, dividends, and export incentives to continue in the near term; however, this treatment is based on current law and tax rulings, which could change.
Our effective income tax rates for the third quarter and the first nine months of 2021 were 20.4% and 17.4%, respectively, compared to 1,136.4% and -16.7% for the third quarter and first nine months of 2020.
Our effective income tax rate decreased in the third quarter of 2016,2021 compared to the higherthird quarter of 2020. The lower effective tax rate for the third quarter of 2017 was2021 is primarily attributable to changesthe recognition of a tax benefit of $125 million, primarily from a non-cash impairment in pretax2020. This tax benefit on our $11 million of pre-tax loss for the third quarter of 2020 resulted in an abnormally high effective tax rate.
Our effective income in countries with varying statutory tax rates, prior year adjustments to our deferred tax liabilities, and an increaserate increased 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 months of 2016,2021 compared to the first nine months of 2020. The higher effective tax rate for the first nine months of 2017 was2021 is primarily attributable to changes in valuation allowances, changes in pretax income in countries with varying statutoryincreased pre-tax earnings relative to our tax rates, a decrease inrate drivers, primarily exempt income and prior year adjustments to our deferred(12.4%), coupled with the tax liabilities, partially offset by an increasebenefit recognized on a non-cash impairment in U.S. domestic production activity deduction.

We operate in multiple jurisdictions throughout the world, and our tax returns are periodically audited or subjected to review by tax authorities. The Company is currently under examination in a number of tax jurisdictions. 2020 (21.7%).

As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements. Tax benefits totaling $552 million and $546 million were unrecognized as of September 30, 20172021 and December 31, 2016, respectively. Positions challenged by the tax authorities may be settled or appealed by the Company. It is reasonably possible that, within the next twelve months, due2020, we had $497 million and $67 million, respectively, of income taxes payable which was included in Accrued liabilities in our Consolidated Balance Sheets.

9.    Commitments and Contingencies
Commitments—We have various purchase commitments for materials, supplies and services incidental to the settlementordinary conduct of uncertain tax positions with various tax authoritiesbusiness, generally for quantities required for our businesses and the expirationat prevailing market prices. These commitments are designed to assure sources of statutes of limitations, unrecognized tax benefits could decrease by up to approximately $90 million.

We monitor income tax developments (including, for example, the U.S. tax reform proposalssupply 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 doesare 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 regulationsbe in excess of normal requirements. As of September 30, 2021, we had capital expenditure commitments, which we incurred in our normal course of business, including commitments of approximately $472 million related to be revoked.

building our new PO/TBA plant in Houston, Texas.



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LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

9.Commitments and Contingencies



Financial Assurance Instruments—InstrumentsWe 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.

Environmental Remediation—RemediationOur accrued liability for future environmental remediation costs at current and former plant sites and other remediation sites totaled $99$144 million and $95$133 million as of September 30, 20172021 and December 31, 2016,2020, respectively. At September 30, 2017,2021, the accrued liabilities for individual sites range from less than $1 million to $17$27 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,
 

Millions of dollars

      2017          2016     

Beginning balance

  $95  $106 

Additional provision

   —     3 

Changes in estimates

   3   10 

Amounts paid

   (7  (16

Foreign exchange effects

   8   2 
  

 

 

  

 

 

 

Ending balance

  $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 relating

LYONDELLBASELL 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.

Indemnification—We are parties to various indemnification arrangements, including arrangements entered into in connection with acquisitions, divestitures and the formation and dissolution of joint ventures. Pursuant to these arrangements, we provide indemnification to and/or receive indemnification from other parties in connection with liabilities that may arise in connection with the transactions and in connection with activities prior to completion of the transactions. These indemnification arrangements typically include provisions pertaining to third partythird-party claims relating to environmental and tax matters and various types of litigation. As of September 30, 2017,2021, 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.

As part of our technology licensing contracts, we give indemnifications to our licensees for liabilities arising from possible patent infringement claims with respect to certain proprietary licensed technologies. Such indemnifications have a stated maximum amount and generally cover a period of five5 to ten10 years.

10.Stockholders’ Equity

Legal Proceedings—We are subject to various lawsuits and claims, including but not limited to, matters involving contract disputes, environmental damages, personal injury and property damage. We vigorously defend ourselves and prosecute these matters as appropriate.
Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor legal proceedings in which we are a party. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial, mediation or other resolution. We regularly assess the adequacy of legal accruals based on our professional judgment, experience and the information available regarding our cases.
Based on a consideration of all relevant facts and circumstances, we do not believe the ultimate outcome of any currently pending lawsuit against us will have a material adverse effect upon our operations, financial condition or Consolidated Financial Statements.


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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


10.    Shareholders’ Equity and Redeemable Non-controlling Interests
Shareholders’ Equity
Dividend distributionsDistributions—The following table summarizessummarized the dividends paid in the periods presented:

Millions of dollars, except per share amounts

  Dividend Per
Ordinary
Share
   Aggregate
Dividends
Paid
   Date of Record

March

  $0.85   $343   March 6, 2017

June

   0.90    361   June 5, 2017

September

   0.90    356   September 6, 2017
  

 

 

   

 

 

   
  $2.65   $1,060   
  

 

 

   

 

 

   

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Millions of dollars, except per share amountsDividend Per Ordinary ShareAggregate Dividends PaidDate of Record
March 2021$1.05 $352 March 8, 2021
June 20211.13 378 June 7, 2021
September 20211.13 380 August 30, 2021
$3.31 $1,110 
Share Repurchase ProgramsAuthorization—In May 2017,2021, our shareholders approved a proposal to authorize us to repurchase up to an additional 10% of our outstanding34.0 million ordinary shares, through November 201828, 2022 (“May 20172021 Share Repurchase Program”Authorization”). As a result, the authorization, which superseded any prior repurchase authorizations. The timing and amount of the remaining unpurchased shares under the share repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was superseded.

Thesethese repurchases, which are determined at the discretionbased on our evaluation of our Management Board,market conditions and other factors, may be executed from time to time through open market or privately negotiated transactions. The repurchased shares, which are recorded at cost, are recordedclassified 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 

Millions of dollars, except shares and per share amounts

  Shares
Repurchased
   Average
Purchase
Price
   Total Purchase
Price, Including
Commissions
 

May 2016 Share Repurchase Program

   3,501,084   $85.71   $300 

May 2017 Share Repurchase Program

   6,516,917    83.54    545 
  

 

 

   

 

 

   

 

 

 
   10,018,001   $84.30   $845 
  

 

 

   

 

 

   

 

 

 

   Nine Months Ended September 30, 2016 

Millions of dollars, except shares and per share amounts

  Shares
Repurchased
   Average
Purchase
Price
   Total Purchase
Price, Including
Commissions
 

May 2015 Share Repurchase Program

   15,302,707   $80.15   $1,226 

May 2016 Share Repurchase Program

   16,091,214    77.73    1,251 
  

 

 

   

 

 

   

 

 

 
   31,393,921   $78.91   $2,477 
  

 

 

   

 

 

   

 

 

 

Due to the timing of settlements, total

Millions of dollars, except shares and per share amountsShares
Repurchased
Average
Purchase
Price
Total Purchase Price, Including
Commissions and Fees
For nine months ended September 30, 2021:
May 2021 Share Repurchase Authorization953,681 $93.34 $89 
For nine months ended September 30, 2020:
September 2019 Share Repurchase Authorization50,685 $78.93 $
Total cash paid for share repurchases for the nine months ended September 30, 20172021 and 2016 was $8662020 were $78 million and $2,501$4 million, respectively.

Cash payments made during the reporting period may differ from the total purchase price, including commissions and fees, due to the timing of payments.




22

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


Ordinary Shares—The changes in the outstanding amounts of ordinary shares are as follows:

   Nine Months Ended
September 30,
 
   2017  2016 

Ordinary shares outstanding:

   

Beginning balance

   404,046,331   440,150,069 

Share-based compensation

   343,663   338,103 

Warrants expired or exercised

   4,184   200 

Employee stock purchase plan

   81,964   71,108 

Repurchase of ordinary shares

   (10,018,001  (31,393,921
  

 

 

  

 

 

 

Ending balance

   394,458,141   409,165,559 
  

 

 

  

 

 

 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 Nine Months Ended
September 30,
 20212020
Ordinary shares outstanding:
Beginning balance334,015,220 333,476,883 
Share-based compensation415,857 246,640 
Employee stock purchase plan149,956 245,521 
Purchase of ordinary shares(953,681)(50,685)
Ending balance333,627,352 333,918,359 

Treasury Shares—The changes in the amounts of treasury shares held by the Company are as follows:

   Nine Months Ended 
   September 30, 
   2017  2016 

Ordinary shares held as treasury shares:

   

Beginning balance

   174,389,139   138,285,201 

Share-based compensation

   (343,663  (338,103

Warrants exercised

   509   —   

Employee stock purchase plan

   (81,964  (71,108

Repurchase of ordinary shares

   10,018,001   31,393,921 
  

 

 

  

 

 

 

Ending balance

   183,982,022   169,269,911 
  

 

 

  

 

 

 

Nine Months Ended
September 30,
 20212020
Ordinary shares held as treasury shares:
Beginning balance6,030,408 6,568,745 
Share-based compensation(415,857)(246,640)
Employee stock purchase plan(50,006)(245,521)
Purchase of ordinary shares953,681 50,685 
Ending balance6,518,226 6,127,269 
Accumulated Other Comprehensive Income (Loss)Loss—The components of, and after-tax changes in, Accumulated other comprehensive loss as of and for the nine months ended September 30, 20172021 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    

Millions of dollars

  Derivatives  Investments  Investees   Benefit Plans  Adjustments  Total 

Balance – January 1, 2017

  $(75 $1  $—     $(498 $(939 $(1,511

Other comprehensive income (loss) before reclassifications

   (187  (5  14    —     143   (35

Amounts reclassified from Accumulated other comprehensive loss

   167   —     —      20   —     187 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Net other comprehensive income (loss)

   (20  (5  14    20   143   152 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance – September 30, 2017

  $(95 $(4 $14   $(478 $(796 $(1,359
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance – January 1, 2016

  $(79 $(5 $—     $(428 $(926 $(1,438

Other comprehensive income (loss) before reclassifications

   (201  (7  —      —     80   (128

Amounts reclassified from Accumulated other comprehensive loss

   52   —     —      15   7   74 
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Net other comprehensive income (loss)

   (149  (7  —      15   87   (54
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Balance – September 30, 2016

  $(228 $(12 $—     $(413 $(839 $(1,492
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

tables:

Millions of dollarsFinancial
Derivatives
Unrealized
Gains on Available
-for-Sale
Debt Securities
Defined Benefit
Pension and Other
Postretirement
Benefit Plans
Foreign
Currency
Translation
Adjustments
Total
Balance – December 31, 2020$(426)$$(752)$(766)$(1,943)
Other comprehensive income (loss) before reclassifications311 (1)— (92)218 
Tax expense before reclassifications(69)— — (35)(104)
Amounts reclassified from accumulated other comprehensive loss(142)— 66 — (76)
Tax (expense) benefit32 — (10)— 22 
Net other comprehensive income (loss)132 (1)56 (127)60 
Balance – September 30, 2021$(294)$— $(696)$(893)$(1,883)


23

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)



Millions of dollarsFinancial
Derivatives
Unrealized
Gains on Available
-for-Sale
Debt Securities
Defined Benefit
Pension and Other
Postretirement
Benefit Plans
Foreign
Currency
Translation
Adjustments
Total
Balance – December 31, 2019$(200)$— $(711)$(873)$(1,784)
Other comprehensive income (loss) before reclassifications(447)— (53)(499)
Tax benefit before reclassifications93 — — 99 
Amounts reclassified from accumulated other comprehensive loss84 — 42 — 126 
Tax expense(19)— (11)— (30)
Net other comprehensive income (loss)(289)31 (47)(304)
Balance – September 30, 2020$(489)$$(680)$(920)$(2,088)
The amounts reclassified out of each component of Accumulated other comprehensive loss are as follows:

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
   Affected line item on
the Consolidated
Statements of Income
 

Millions of dollars

  2017   2016   2017   2016   

Reclassification adjustments for:

          

Financial derivatives

  $74   $5   $232   $52    Other income, net 

Defined pension and other postretirement benefit plan items:

          

Amortization of:

          

Prior service cost

   —      1    —      1   

Actuarial loss

   10    8    29    23   

Foreign currency translation adjustments

   —      7    —      7    Other income, net 
  

 

 

   

 

 

   

 

 

   

 

 

   

Reclassifications, before tax

   84    21    261    83   

Income tax expense

   21    4    74    9    Provision for income taxes 
  

 

 

   

 

 

   

 

 

   

 

 

   

Amounts reclassified out of Accumulated other comprehensive loss

  $63   $17   $187   $74   
  

 

 

   

 

 

   

 

 

   

 

 

   

Amortization

 Three Months Ended
September 30,
Nine Months Ended
September 30,
Affected Line Item on
the Consolidated
Statements of Income
Millions of dollars2021202020212020
Reclassification adjustments for:
Financial derivatives:
Foreign currency$(60)$89 $(128)$81 Interest expense
Commodities(14)— (18)— Cost of sales
Interest ratesInterest expense
Income tax (expense) benefit17 (22)32 (19)Provision for income taxes
Financial derivatives, net of tax(56)68 (110)65 
Amortization of defined pension items:
Prior service cost— Other income (expense), net
Actuarial loss14 13 40 39 Other income (expense), net
Settlement loss20 — 24 — Other income (expense), net
Income tax expense(6)(4)(10)(11)Provision for income taxes
Defined pension items, net of tax28 10 56 31 
Total reclassifications, before tax(39)104 (76)126 
Income tax (expense) benefit11 (26)22 (30)Provision for income taxes
Total reclassifications, after tax$(28)$78 $(54)$96 Amount included in net income
Redeemable Non-controlling Interests
Our redeemable non-controlling interests relate to shares of actuarial losscumulative perpetual special stock (“redeemable non-controlling interest stock”) issued by a consolidated subsidiary. As of September 30, 2021 and prior service cost is included inDecember 31, 2020, we had 115,374 shares of redeemable non-controlling interest stock outstanding. In February, May and August 2021, we paid cash dividends of $15.00 per share to our redeemable non-controlling interest shareholders of record as of January 15, 2021, April 15, 2021 and July 15, 2021. These dividends totaled $5 million for each of the computationnine months ended September 30, 2021 and 2020.


24

Table of net periodic pension and other postretirement benefit costs (see Note 7).

Contents


LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

11.Per Share Data



11.    Per Share Data
Basic earnings per share 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.

There was no impact to basic or diluted earnings per share from discontinued operations.

Earnings per share data and dividends declared per share of common stock are as follows:

   Three Months Ended September 30, 
   2017  2016 
   Continuing  Discontinued  Continuing  Discontinued 

Millions of dollars

  Operations  Operations  Operations  Operations 

Net income (loss)

  $1,058  $(2 $955  $(2

Less: net (income) loss attributable to non-controlling interests

   1   —     (1  —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) attributable to the Company shareholders

   1,059   (2  954   (2

Net income attributable to participating securities

   (1  —     (1  —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) attributable to ordinary shareholders – basic and diluted

  $1,058  $(2 $953  $(2
  

 

 

  

 

 

  

 

 

  

 

 

 

Millions of shares, except per share amounts

             

Basic weighted average common stock outstanding

   395   395   413   413 

Effect of dilutive securities:

     

PSU awards

   —     —     1   1 
  

 

 

  

 

 

  

 

 

  

 

 

 

Potential dilutive shares

   395   395   414   414 
  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings (loss) per share:

     

Basic

  $2.67  $—    $2.31  $(0.01
  

 

 

  

 

 

  

 

 

  

 

 

 

Diluted

  $2.67  $—    $2.31  $(0.01
  

 

 

  

 

 

  

 

 

  

 

 

 

Millions of shares

             

Participating securities

   0.4   0.4   0.4   0.4 
  

 

 

  

 

 

  

 

 

  

 

 

 

Dividends declared per share of common stock

  $0.90  $—    $0.85  $—   
  

 

 

  

 

 

  

 

 

  

 

 

 

 Three Months Ended September 30,
20212020
Millions of dollarsContinuing
Operations
Discontinued
Operations
Continuing
Operations
Discontinued
Operations
Net income (loss)$1,763 $(1)$114 $— 
Dividends on redeemable non-controlling interests(2)— (2)— 
Net income attributable to participating securities(4)— (1)— 
Net income (loss) attributable to ordinary shareholders – basic and diluted$1,757 $(1)$111 $— 
Millions of shares, except per share amounts
Basic weighted average common stock outstanding334 334 334 334 
Effect of dilutive securities— — — — 
Potential dilutive shares334 334 334 334 
Earnings per share:
Basic$5.25 $— $0.33 $— 
Diluted$5.25 $— $0.33 $— 
 Nine Months Ended September 30,
 20212020
Millions of dollarsContinuing
Operations
Discontinued
Operations
Continuing
Operations
Discontinued
Operations
Net income (loss)$4,892 $(1)$572 $— 
Dividends on redeemable non-controlling interests(5)— (5)— 
Net income attributable to participating securities(12)— (2)— 
Net income (loss) attributable to ordinary shareholders – basic and diluted$4,875 $(1)$565 $— 
Millions of shares, except per share amounts
Basic weighted average common stock outstanding334 334 334 334 
Effect of dilutive securities— — — — 
Potential dilutive shares334 334 334 334 
Earnings per share:
Basic$14.58 $— $1.69 $— 
Diluted$14.57 $— $1.69 $— 


25

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

   Nine Months Ended September 30, 
   2017  2016 
   Continuing  Discontinued  Continuing  Discontinued 

Millions of dollars

  Operations  Operations  Operations  Operations 

Net income (loss)

  $2,997  $(14 $3,077  $(3

Less: net (income) loss attributable to non-controlling interests

   2   —     (1  —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) attributable to the Company shareholders

   2,999   (14  3,076   (3

Net income attributable to participating securities

   (3  —     (3  —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Net income (loss) attributable to ordinary shareholders – basic and diluted

  $2,996  $(14 $3,073  $(3
  

 

 

  

 

 

  

 

 

  

 

 

 

Millions of shares, except per share amounts

             

Basic weighted average common stock outstanding

   400   400   423   423 

Effect of dilutive securities:

     

PSU awards

   —     —     1   1 
  

 

 

  

 

 

  

 

 

  

 

 

 

Potential dilutive shares

   400   400   424   424 
  

 

 

  

 

 

  

 

 

  

 

 

 

Earnings (loss) per share:

     

Basic

  $7.49  $(0.03 $7.26  $(0.01
  

 

 

  

 

 

  

 

 

  

 

 

 

Diluted

  $7.49  $(0.03 $7.24  $(0.01
  

 

 

  

 

 

  

 

 

  

 

 

 

Millions of shares

             

Participating securities

   0.4   0.4   0.4   0.4 
  

 

 

  

 

 

  

 

 

  

 

 

 

Dividends declared per share of common stock

  $2.65  $—    $2.48  $—   
  

 

 

  

 

 

  

 

 

  

 

 

 

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12.Segment and Related Information



12.    Segment and Related Information
Our operations are managed through five operating segments, as shown below. We disclose the results of each of our operating segments in accordance with ASC 280,Segment Reporting. Each of 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.

Olefins and Polyolefins—Americas (“O&P—Americas”). Our O&P—Americas segment produces and markets olefins and co-products, polyethylene and polypropylene.
Olefins and Polyolefins—Europe, Asia, International (“O&P—EAI”). Our O&P—EAI segment produces and markets olefins and co-products, polyethylene and polypropylene.
Intermediates and Derivatives (“I&D”). Our I&D segment produces and markets propylene oxide and its derivatives, oxyfuels and related products, and intermediate chemicals such as styrene monomer, acetyls, ethylene oxide and ethylene glycol.
Advanced Polymer Solutions (“APS”). Our APS segment produces and markets compounding and solutions, such as polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers, which includes Catalloy and polybutene-1.
Refining. Our Refining segment refines heavy, high-sulfur crude oil and other crude oils of varied types and sources available on the U.S. Gulf Coast into refined products, including gasoline and distillates.
Technology. Our Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.
Our chief operating decision maker uses EBITDA as the primary measure for reviewing profitability of our segments’ profitabilitysegments, and therefore, in accordance with ASC 280,Segment Reporting, we have presented EBITDA for all segments. We define EBITDA as earnings before interest, income taxes, and depreciation and amortization.

Intersegment

“Other” includes intersegment eliminations and items that are not directly related or allocated to business operations, are included in “Other.”such as foreign exchange gains or losses and components of pension and other 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)

Summarized financial information concerning reportable segments is shown in the following tabletables for the periods presented:

   Three Months Ended September 30, 2017 

Millions of dollars

  O&P–
Americas
   O&P–
EAI
   I&D   Refining   Technology   Other  Total 

Sales and other operating revenues:

             

Customers

  $1,817   $3,096   $2,043   $1,491   $69   $—    $8,516 

Intersegment

   632    56    34    179    29    (930  —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 
   2,449    3,152    2,077    1,670    98    (930  8,516 

Income from equity investments

   8    69    4    —      —      —     81 

EBITDA

   616    698    402    58    47    —     1,821 

   Three Months Ended September 30, 2016 

Millions of dollars

  O&P–
Americas
   O&P–
EAI
   I&D   Refining  Technology   Other  Total 

Sales and other operating revenues:

            

Customers

  $1,740   $2,585   $1,769   $1,192  $80   $(1 $7,365 

Intersegment

   602    49    36    138   22    (847  —   
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 
   2,342    2,634    1,805    1,330   102    (848  7,365 

Income from equity investments

   12    67    2    —     —      —     81 

EBITDA

   682    584    304    (10  45    1   1,606 

   Nine Months Ended September 30, 2017 

Millions of dollars

  O&P–
Americas
   O&P–
EAI
   I&D   Refining   Technology   Other  Total 

Sales and other operating revenues:

             

Customers

  $5,631   $9,029   $6,142   $4,306   $241   $—    $25,349 

Intersegment

   1,969    155    99    430    84    (2,737  —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

 
   7,600    9,184    6,241    4,736    325    (2,737  25,349 

Income from equity investments

   33    202    5    —      —      —     240 

EBITDA

   2,198    1,926    1,080    53    155    (4  5,408 

 Three Months Ended September 30, 2021
Millions of dollarsO&P–
Americas
O&P–
EAI
I&DAPSRefiningTechnologyOtherTotal
Sales and other operating revenues:
Customers$3,071 $3,262 $2,851 $1,280 $2,050 $186 $— $12,700 
Intersegment1,337 196 43 238 52 (1,872)— 
4,408 3,458 2,894 1,286 2,288 238 (1,872)12,700 
Income from equity investments29 66 — — — — 104 
EBITDA1,568 474 348 121 41 155 (16)2,691 
Capital expenditures72 54 327 20 17 22 514 


26

Table of Contents

LYONDELLBASELL INDUSTRIES N.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—STATEMENTS-(Continued)

   Nine Months Ended September 30, 2016 

Millions of dollars

  O&P–
Americas
   O&P–
EAI
   I&D   Refining  Technology   Other  Total 

Sales and other operating revenues:

            

Customers

  $4,978   $7,805   $5,186   $3,179  $288   $—    $21,436 

Intersegment

   1,690    128    90    395   75    (2,378  —   
  

 

 

   

 

 

   

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 
   6,668    7,933    5,276    3,574   363    (2,378  21,436 

Income from equity investments

   54    232    3    —     —      —     289 

EBITDA

   2,314    1,669    1,027    (9  201    (6  5,196 

Our O&P–Americas results



 Three Months Ended September 30, 2020
Millions of dollarsO&P–
Americas
O&P–
EAI
I&DAPSRefiningTechnologyOtherTotal
Sales and other operating revenues:
Customers$1,268 $1,837 $1,498 $1,003 $1,003 $167 $— $6,776 
Intersegment572 145 40 98 26 (882)— 
1,840 1,982 1,538 1,004 1,101 193 (882)6,776 
Income from equity investments15 40 — — — — 62 
LCM inventory valuation benefit(70)(17)(22)(40)(11)— — (160)
EBITDA474 148 267 157 (692)111 466 
Capital expenditures130 38 103 18 15 24 97 425 
Nine Months Ended September 30, 2021
Millions of dollarsO&P–
Americas
O&P–
EAI
I&DAPSRefiningTechnologyOtherTotal
Sales and other operating revenues:
Customers$7,770 $9,342 $7,086 $3,882 $4,784 $479 $— $33,343 
Intersegment3,220 618 160 10 575 107 (4,690)— 
10,990 9,960 7,246 3,892 5,359 586 (4,690)33,343 
Income from equity investments94 263 32 — — — — 389 
EBITDA4,011 1,594 1,126 385 (150)341 (13)7,294 
Capital expenditures219 141 717 55 62 64 27 1,285 
Nine Months Ended September 30, 2020
Millions of dollarsO&P–
Americas
O&P–
EAI
I&DAPSRefiningTechnologyOtherTotal
Sales and other operating revenues:
Customers$3,514 $5,543 $4,370 $2,796 $3,193 $400 $— $19,816 
Intersegment1,551 365 95 275 92 (2,387)— 
5,065 5,908 4,465 2,805 3,468 492 (2,387)19,816 
Income (loss) from equity investments24 88 12 (1)— — — 123 
LCM inventory valuation charge53 76 29 — — 163 
EBITDA1,088 522 571 226 (799)279 (15)1,872 
Capital expenditures524 114 761 41 52 80 101 1,673 
During the third quarter of 2020, we assessed the Houston refinery for impairment and determined that the first nine months of 2017 includeasset group carrying value exceeded its undiscounted estimated pre-tax cash flows and fair value. As a $31 million gain on the first quarter sale of our Lake Charles, Louisiana site. EBITDA for our O&P–EAI segmentresult, we recognized a non-cash impairment charge in the third quarter and first nine months of 20172020 of $582 million, which includes a $108$570 million gain onimpairment of property, plant and equipment and a $12 million impairment of intangible assets. The fair value measurement for the asset group is a Level 3 within the fair value hierarchy.


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LYONDELLBASELL INDUSTRIES N.V.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(Continued)


We are currently weighing strategic options for our Refining segment, including a potential sale of our 27% interest in Geosel andHouston refinery. While the first nine monthsrefinery is a valuable asset, we believe that it may be even more valuable as part of 2017 also includes a $21 million non-cash gain stemming fromlarger refining system. Any strategic option pursued for 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, relatedHouston refinery remains subject to the saleapproval of our wholly owned Argentine subsidiary, Petroken Petroquimica Ensenada S.A.

Board of Directors and, assuming such approval is obtained, may require certain regulatory approvals or other closing conditions.


A reconciliation of EBITDA to Income (loss) from continuing operations before income taxes is shown in the following table for each of the periods presented:

   Three Months Ended September 30,  Nine Months Ended September 30, 

Millions of dollars

            2017                      2016                      2017                      2016           

EBITDA:

     

Total segment EBITDA

  $1,821  $1,605  $5,412  $5,202 

Other EBITDA

   —     1   (4  (6

Less:

     

Depreciation and amortization expense

   (294  (257  (876  (791

Interest expense

   (94  (72  (396  (237

Add:

     

Interest income

   5   4   15   13 
  

 

 

  

 

 

  

 

 

  

 

 

 

Income from continuing operations before income taxes

  $1,438  $1,281  $4,151  $4,181 
  

 

 

  

 

 

  

 

 

  

 

 

 
 Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
EBITDA:
Total segment EBITDA$2,707 $465 $7,307 $1,887 
Other EBITDA(16)(13)(15)
Less:
Depreciation and amortization expense(351)(358)(1,016)(1,056)
Interest expense(126)(122)(366)(336)
Add:
Interest income10 
Income (loss) from continuing operations before income taxes$2,215 $(11)$5,920 $490 



28

Table of Contents

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

This discussion 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.

subsidiaries (“LyondellBasell N.V.”).

OVERVIEW

Our portfolio


Third quarter results reflect robust demand for our products and tight market conditions, which supported strong margins across most of global businesses demonstrated strong performance in the third quarter with the improvement in our I&D segment and continued strong results from our O&P–EAI segment. Texas Gulf Coast production losses due to the impacts of Hurricane Harvey on our operations in the third quarter of 2017 were partly offset by margin improvements and, in many cases, were similar to or less than production constraints in the comparable periods of 2016.

Significant items that affected our results duringbusinesses. During the third quarter and first nine months of 20172021 relative to the third quarter and first nine months of 2016 include:

Lower O&P–Americas results2020, EBITDA increased largely due to a declinemargin improvements in olefinsour O&P—Americas, O&P—EAI, I&D and Refining segments. While results improved for our I&D segment, this segment was impacted by lost volume in connection with downtime in our acetyls business. Increasing mobility has improved demand and margins partly offsetfor transportation fuels produced by higher polyethylene margins inour Refining segment.

Strong business results and the third quarterbenefits of 2017; and lower polyolefins margins inrecent growth investments enabled us to repay $2,378 million of debt during the first nine months of 2017, partly offset by increased olefins volumes;

Strong O&P–EAI results reflect higher polyolefins volumes2021 and an additional $650 million in the third quarter of 2017, offset in part by declines in olefinsOctober 2021. Additionally, we have resumed our share repurchase activity and polyethylene margins. Higher olefins margins and higher volumes in the first nine months of 2017, offset in part by lower polyethylene margins;

Higher I&D segment results with strong intermediate chemicals margins in both 2017 periods, partly offset by impacts of turnaround activities; and

Improved Refining segment results due to higher crude oil processing rates and industry margins, partly offset in the first nine months of 2017 by higher maintenance-related fixed costs.

Other noteworthy items since the beginning of the year include the following:

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

In July 2017, we announced our final investment decision to build a world-scale PO/TBA plant in Texas with a capacity ofpurchased approximately 1 billion pounds of PO and 2.2 billion pounds of TBA. Construction is expected to commence in the second half of 2018;

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

Issuance of $1,000 million of 3.5% guaranteed notes due 2027 in March 2017, used to redeem $1,000shares for $89 million aggregate principal amount of our outstanding 5% senior notes due 2019; and

Repurchases of approximately 3 million and 10 million of our outstanding ordinary shares during the third quarter.

During the second quarter of 2021, we invested $104 million to purchase a 50% interest in a joint venture with the China Petroleum & Chemical Corporation which will construct a new propylene oxide and first nine months of 2017, respectively.styrene monomer unit in China.

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
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$12,700 $6,776 $33,343 $19,816 
Cost of sales10,109 5,885 26,463 17,647 
Impairment of long-lived assets— 582 — 582 
Selling, general and administrative expenses313 259 927 842 
Research and development expenses30 27 91 79 
Operating income2,248 23 5,862 666 
Interest expense(126)(122)(366)(336)
Interest income10 
Other (expense) income, net(12)23 27 27 
Income from equity investments104 62 389 123 
Income (loss) from continuing operations before income taxes2,215 (11)5,920 490 
Provision for (benefit from) income taxes452 (125)1,028 (82)
Income from continuing operations1,763 114 4,892 572 
Loss from discontinued operations, net of tax(1)— (1)— 
Net income$1,762 $114 $4,891 $572 



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RESULTS OF OPERATIONS

Revenues—Revenues increased by $1,151$5,924 million, or 16%87%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $3,913$13,527 million, or 18%68%, in the first nine months of 20172021 compared to the first nine months of 2016.

2020. Average sales prices in the third 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 periods in 2016.2020. These higher prices led to increasesa 77% and 63% 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 third quarter and first nine months of 20172021, respectively. Higher sales volumes, driven by 5%increased demand, resulted in a revenue increase of 10% and 3%, in the third quarter and first nine months of 2021, respectively. Favorable foreign exchange impacts resulted in a 2% revenue increase inof 2% during the third quarterfirst nine months of 2017.

2021.

Cost of Sales—Cost of sales increased by $1,036$4,224 million, or 18%72%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $3,760$8,816 million, or 22%50%, in the first nine months of 20172021 compared to the first nine months of 20162020, respectively. This increase primarily duerelated to increases inhigher feedstock and energy costs.

Operating Income—Operating income increased

During the first nine months of 2020, we recognized an LCM inventory valuation charge of $163 million related to the decline in market pricing for many of our raw material and finished goods inventories since December 31, 2019. During the third quarter of 2020, we recognized an LCM inventory valuation benefit of $160 million largely driven by $83 millionthe recovery of market pricing for many of our raw material and finished goods inventories during the quarter.
Impairment of Long-Lived Assets—During the third quarter of 2020, we assessed the Houston refinery for impairment and determined that the asset group carrying value exceeded its undiscounted estimated pre-tax cash flows and fair value. As a result, we recognized a non-cash impairment charge in the third quarter of 20172020 of $582 million.
Operating Income—Operating income increased by $2,225 million, or 9,674%, in the third quarter of 2021 compared to the third quarter of 20162020 and by $107$5,196 million, or 780%, in the first nine months of 20172021 compared to the first nine months of 2016.

Operating income for2020. In the third quarter of 20172021, operating income in our O&P–Americas, Refining, O&P–EAI, I&D and Technology segments increased by $1,094 million, $758 million, $309 million, $67 million and $43 million, respectively, relative to the third 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$22 million in our O&P–Americas segment.

Operating income forAPS segment in the third quarter of 2021 compared to the third quarter of 2020. In the first nine months of 20172021, operating income in our O&P–Americas, O&P–EAI, Refining, I&D, APS and Technology segments increased relativeby $2,831 million, $903 million, $731 million, $493 million, $196 million and $56 million, respectively, compared to the first nine months 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”Segment Analysis section below.

Interest Expense

Income from Equity InvestmentsInterest expenseIncome from our equity investments increased by $22$42 million, or 68%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $159$266 million, or 216%, in the first nine months of 20172021 compared to the first nine months of 2016.

In the first nine months of 2017, we recognized charges totaling $113 million related 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. Charges 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 an2020. The increase of $95 million over the prior year period largelywas primarily 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 gainincreases in our O&P–EAI segment relateddriven primarily by higher margins due to the elimination of an obligation associated with a lease. In the first nine months of 2016, we recognized a $78 million gain related to the sale of our wholly owned Argentine subsidiary. We allocated $57 million and $21 million of this gain to our O&P–Americas and O&P–EAI segments, respectively.

Equity Income—increased demand.

Income from our equity investments declined by $49 million in the first nine months of 2017 compared to the first nine months of 2016. This decline was relative to very strong 2016 results from our joint ventures in Mexico, Poland and Saudi Arabia.

Income TaxTaxes—Our effective income tax rate for the third quarter of 20172021 was 26.4%20.4% compared with 25.4%1,136.4% for the third quarter of 2016 and for the first nine months of 2017 was 27.8% compared with 26.4% for the first nine months of 2016.

2020. 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. 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 our deferred tax liabilities (1.1%), and an increase in foreign currency exchange gains (0.5%), partially offset by an increase in exempt income (-0.9%) and an increase in U.S. domestic production activity deduction (-0.9%). Compared with the first nine months of 2016, the higher effective tax rate for the first nine months of 20172021 was 17.4% compared with -16.7% for the first nine months of 2020. Changes in our effective income tax rate were primarily attributable todriven by changes in valuation allowances (0.6%), changespre-tax income as well as a tax benefit recognized on the non-cash impairment of our Houston refinery 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 monitorthe third quarter of 2020. Our income tax developments (including, for example, the U.S. tax reform proposals and the European Union’s state aid investigations)results are discussed further in countries where we conduct business. Recently, there has been an increase in attention, both in the U.K. and globally,Note 8 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.

Statements.

Comprehensive Income—Comprehensive income increased by $139$1,443 million in the third quarter of 20172021 compared to the third quarter of 20162020 and by $115$4,683 million in the first nine months of 20172021 compared to the first nine months of 2016. The third quarter 2017 increase reflects2020. These changes were primarily due to higher net income inpartially offset by the third quarter of 2017 and the favorablenet unfavorable impacts of financial derivativeunrealized changes in foreign currency translation adjustments. The increaseFinancial derivatives activity increased comprehensive income by $421 million in the first nine months of 2017 reflects2021 compared to the favorable impactsfirst nine months of financial derivative adjustments2020, and decreased comprehensive income by $40 million in the net favorable impactthird quarter of unrealized net changes in foreign currency translation adjustments, partially offset by lower net income.

2021 compared to the third quarter of 2020.



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In the third quarter and first nine months of 2017,2021, the cumulative after-tax effects of our derivatives designated as cash flow hedges were lossesnet gains of $100$35 million and $260$132 million, respectively. The euro strengthened against the U.S. dollarPre-tax gains of $17 million and $117 million related to forward-starting interest rate swaps were driven by periodic changes in benchmark interest rates in the third quarter and first nine months of 2017 resulting2021, respectively. The fluctuations of the U.S. dollar against the euro and the periodic changes in pre-tax losses of $98 million and $233 million, respectively,benchmark interest rates, in the third quarter and first nine months of 20172021, resulted in pre-tax gains of $63 million and $127 million, respectively, related to our cross-currency swaps. Pre-tax gainslosses of $74$60 million and $232$128 million related to our cross-currency swaps were reclassification adjustments included in net incomereclassified from Accumulated other comprehensive loss to Interest expense in the third quarter and first nine months of 2017,2021, respectively. Unrealized pre-tax losses of $5 million and $23 million inThe remaining change pertains to our commodity cash flow hedges.
In the third quarter and first nine months of 2017, respectively,2020, the cumulative after-tax effects of our derivatives designated as cash flow hedges were net losses of $289 million. Included in this amount, were pre-tax losses of $430 million related to forward-starting interest rate swaps, were driven by increasesthe significant decline in benchmark interest rates during those periods.

in the first nine months of 2020, primarily due to changes in the economy impacting late in the first quarter of 2020.

The predominant functional currency for our operations outside of the U.S. is the euro. Relative to the U.S. dollar, the value of the euro increased duringweakened in the third quarter and the first nine months of 20172021, resulting in net gains aslosses reflected in the Consolidated Statements of Comprehensive Income. TheseThe net gainslosses related to unrealized changes in foreign currency translation impacts include pre-tax lossesgains of $87$72 million and $265$147 million in the third quarter and first nine months of 2017,2021, respectively, which represent the effective portion of our net investment hedges.

In the first nine months of 2020, relative to the U.S. dollar, the value of the euro increased resulting in net gains in the Consolidated Statements of Comprehensive Income. The net gains related to unrealized changes in foreign currency translation impacts were partially offset by pre-tax losses of $60 million in the first nine months of 2020, which represent the effective portion of our net investment hedges. Additionally, during the first nine months of 2020 we recognized unrealized foreign currency translation losses of $75 million resulting from the decrease in the value of the Mexican peso and the Brazilian real.


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Segment Analysis

We use earnings before interest, income taxes, and depreciation and amortization (“EBITDA”) as our measure of profitability for segment reporting purposes. This measure of segment operating results is used by our chief operating decision maker to assess the performance of and allocate resources to our operating segments. Intersegment eliminations and items that are not directly related or allocated to business operations, such as foreign exchange gains or losses and components of pension and other postretirement benefits other than service costs are included in “Other.”“Other”. For additional information related to our operating segments, as well as a reconciliation of EBITDA to its nearest GAAP measure, Income from continuing operations before income taxes, see Note 12Segment and Related Information, to our Consolidated Financial Statements.

Our continuing operations are divided into five reportable segments: O&P–Americas; O&P–EAI; I&D; Refining; and Technology.

Revenues and the components of EBITDA for the periods presented are reflected 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:

     

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 
  

 

 

  

 

 

  

 

 

  

 

 

 

   Three Months Ended
September 30,
  Nine Months Ended
September 30,
 

Millions of dollars

      2017          2016          2017          2016     

Other income (expense), net:

     

O&P–Americas segment

  $6  $1  $41  $60 

O&P–EAI segment

   109   12   137   38 

I&D segment

   —     —     1   1 

Refining segment

   (1  6   1   7 

Other, including intersegment eliminations

   —     —     (7  (2
  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $114  $19  $173  $104 
  

 

 

  

 

 

  

 

 

  

 

 

 

EBITDA:

     

O&P–Americas segment

  $616  $682  $2,198  $2,314 

O&P–EAI segment

   698   584   1,926   1,669 

I&D segment

   402   304   1,080   1,027 

Refining segment

   58   (10  53   (9

Technology segment

   47   45   155   201 

Other, including intersegment eliminations

   —     1   (4  (6
  

 

 

  

 

 

  

 

 

  

 

 

 

Total

  $1,821  $1,606  $5,408  $5,196 
  

 

 

  

 

 

  

 

 

  

 

 

 

below:

Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues:
O&P–Americas segment$4,408 $1,840 $10,990 $5,065 
O&P–EAI segment3,458 1,982 9,960 5,908 
I&D segment2,894 1,538 7,246 4,465 
APS segment1,286 1,004 3,892 2,805 
Refining segment2,288 1,101 5,359 3,468 
Technology segment238 193 586 492 
Other, including intersegment eliminations(1,872)(882)(4,690)(2,387)
Total$12,700 $6,776 $33,343 $19,816 
Operating income (loss):
O&P–Americas segment$1,403 $309 $3,485 $654 
O&P–EAI segment361 52 1,171 268 
I&D segment247 180 828 335 
APS segment94 116 299 103 
Refining segment25 (733)(200)(931)
Technology segment144 101 308 252 
Other, including intersegment eliminations(26)(2)(29)(15)
Total$2,248 $23 $5,862 $666 
Depreciation and amortization:
O&P–Americas segment$142 $134 $427 $391 
O&P–EAI segment47 55 150 161 
I&D segment103 79 264 223 
APS segment28 40 83 123 
Refining segment20 40 58 131 
Technology segment11 10 34 27 
Total$351 $358 $1,016 $1,056 
Income (loss) from equity investments:
O&P–Americas segment$29 $15 $94 $24 
O&P–EAI segment66 40 263 88 
I&D segment32 12 
APS segment— — — (1)
Total$104 $62 $389 $123 


32

Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Other (expense) income, net:
O&P–Americas segment$(6)$16 $$19 
O&P–EAI segment— 10 
I&D segment(11)
APS segment(1)
Refining segment(4)(8)
Technology segment— — (1)— 
Other, including intersegment eliminations10 16 — 
Total$(12)$23 $27 $27 
EBITDA:
O&P–Americas segment$1,568 $474 $4,011 $1,088 
O&P–EAI segment474 148 1,594 522 
I&D segment348 267 1,126 571 
APS segment121 157 385 226 
Refining segment41 (692)(150)(799)
Technology segment155 111 341 279 
Other, including intersegment eliminations(16)(13)(15)
Total$2,691 $466 $7,294 $1,872 

Olefins and Polyolefins–Americas Segment


OverviewThird quarter 2017 EBITDA decreased due to lower olefins margins, partly offset by higher polyethylene margins compared to the third quarter of 2016. EBITDA for the first nine months of 2017 declined due to lower polyolefins and olefins margins and higher fixed costs, partially offset by higher olefins volumes. EBITDA for the first nine months of 2017 also included a $31 million gain on the sale of our Lake Charles, Louisiana, site. EBITDA for the first nine months of 2016 included a $57 million gain on the sale of our wholly owned Argentine subsidiary.

Ethylene Raw Materials—Production economics for the industry have favored natural gas liquids (“NGLs”)improved in recent years. While ethane continues to be the preferred U.S. olefins feedstock over time, there were periods during the third quarter and first nine months of 2017 when crude oil based liquids (“heavy liquids”), had comparable or favored economics. These favorable economics resulted from co-product price increases, a more significant component of heavy liquid economics than for ethane, which outpaced feedstock price increases. We produced approximately 85% and 87% of our U.S. ethylene production from NGLs during2021 relative to the third quarters of 2017quarter and 2016, respectively, and 87% and 88%, respectively, during the first nine months of 20172020 driven by olefin and 2016.

polyolefin margin improvements.


Ethylene Raw Materials—We have flexibility to vary the raw material mix and process conditions in our U.S. olefins plants in order to maximize profitability as market prices fluctuate for both feedstocks and products. Although prices of crude-based liquids and natural gas liquids are generally related to crude oil and natural gas prices, during specific periods the relationships among these materials and benchmarks may vary significantly. In the third quarter and first nine months of 2021 and 2020 approximately 60% of the raw materials used in our North American crackers was ethane.

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

   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
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$4,408 $1,840 $10,990 $5,065 
Income from equity investments29 15 94 24 
EBITDA1,568 474 4,011 1,088 



33

Revenues—Revenues for our O&P–Americas segment increased by $107$2,568 million, or 5%140%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $932$5,925 million, or 14%117%, in the first nine months of 20172021 compared to the first nine months of 2016.

Average2020. Higher average sales prices for most products increasedresulted in a 120% and 103% increase in revenue in the third quarter and first nine months of 2017, consistent2021, respectively, primarily driven by tight market conditions. Volume improvements resulted in a revenue increase of 20% and 14% in the third quarter and first nine months of 2021, respectively, due to improved demand in combination with industry-wide supply constraints.


EBITDA—EBITDA increased by $1,094 million, or 231%, in the third quarter of 2021 compared to the third quarter of 2020 and by $2,923 million, or 269%, in the first nine months of 2021 compared to the first nine months of 2020. Higher olefin results led to a 123% and 164% increase in EBITDA in the third quarter and first nine months of 2021, respectively. This increase was primarily due to margin improvements as higher ethylene and propylene prices outpaced increases in feedstock costs. Higher polyethylene results led to a 69% and 60% increase in EBITDA in the third quarter and first nine months of 2021, respectively, while polypropylene results led to a 43% and 36% increase in EBITDA in the third quarter and first nine months of 2021, respectively. These improvements were primarily due to polyolefin sales price increases which outpaced higher feedstock costs.

Third quarter of 2020 results include an LCM inventory valuation benefit of $70 million, or 15%, related to the reversal of an LCM inventory valuation charge recognized earlier in the year. These benefits were largely driven by recovery of market prices that are correlated withof ethylene and polymers.

Results also include a LIFO inventory charge of $61 million which was recognized in the pricethird quarter of crude oil, which on average2020. The absence of similar adjustments in the third quarter and first nine months of 2021 resulted in a 13% and 6% change in EBITDA, respectively.
Olefins and Polyolefins–Europe, Asia, International Segment

Overview—EBITDA increased for the third quarter and first nine months of 2021 relative to the third quarter and first nine months of 2016. These2020 mainly as a result of higher sales prices were responsible for increasesmargins and equity income.

While the majority of the feedstock used in revenues of 2% and 12%our EAI segment’s ethylene crackers is naphtha, in the third quarter and first nine months of 2017, respectively.

Better product availability compared to the third quarter2021 and first nine months of 2016, which was negatively affected by expansion at our Corpus Christi, Texas facility and turnaround activities, led to higher olefins sales volumes. These increased volumes, which were partially offset by a decrease 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.

EBITDA—EBITDA decreased by $66 million, or 10%, in the third quarter of 2017 compared to the third quarter of 2016 and by $116 million, or 5%, in the first nine months of 2017 compared to the first nine months of 2016.

Margins in the third 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 margins resulted in a 7% reduction in third quarter 2017 EBITDA. The decline in polyolefins volumes in the third quarter of 2017 due to reduced production resulting from hurricane-related downtime at our Texas Gulf Coast facilities, including the shutdown of our La Porte, Texas facility, led to an additional 2% decline in EBITDA.

In the first nine months of 2017, margins were lower compared to the first nine months of 2016 largely due to decreases in olefins and polypropylene spreads of 1 cent per pound and 6 cents per pound, respectively. These lower margins, which primarily reflect the impact2020 approximately 35% of the increased costraw materials used in our crackers were advantaged feedstocks, which consisted primarily of ethylenebutane and propylene feedstocks, resulted in an 8% decline in EBITDA compared to the first nine months of 2016. Lower income from our equity investments relative to the prior year period resulted in a 1% decline in EBITDA. The net impact of the gain on sale of our wholly owned Argentine subsidiary in the first quarter of 2016 and the first quarter 2017 gain on sale of the Lake Charles, Louisiana site also resulted 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.

Olefins and Polyolefins–Europe, Asia, International Segment

Overview—Third quarter 2017 EBITDA was higher relative to the third quarter of 2016 due to the impacts of higher polyolefins volumes and favorable foreign exchange, partially offset by lower margins for olefins and polyethylene. EBITDA also improved in the first nine months of 2017 over the corresponding period in 2016. This improvement was driven by higher olefins margins and the impact of higher volumes across most products, partly offset by lower polyethylene margins and lower income from our equity investments.

EBITDA 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.

hydrowax.


The following table sets forth selected financial information for the O&P–EAI segment including Income (loss) from equity investments, which is a component of EBITDA:

   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
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$3,458 $1,982 $9,960 $5,908 
Income from equity investments66 40 263 88 
EBITDA474 148 1,594 522 


Revenues—Revenues increased by $518$1,476 million, or 20%74%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $1,251$4,052 million, or 16%69%, in the first nine months of 20172021 compared to the first nine months of 2016.

2020. Average sales prices in the third quarter and first nine months of 20172021 were higher across most products as sales prices generally correlate with crude oil prices, which on average, increased compared to the third quarter and first nine months of 2016.same period in 2020. These higher average sales prices were responsible for a revenue increasesincrease of 5%65% and 12%, respectively,53% in the third quarter and first nine months of 2017. Better product availability2021, respectively. Volume improvements resulted in a revenue increase of 8% and 11% in the third quarter and first nine months of 2021, respectively, primarily due to strong demand in combination with tight market supply. Favorable foreign exchange impacts resulted in a revenue increase of 1% and 5% in the third quarter and first nine months of 2021, respectively.



34

Table of Contents
EBITDA—EBITDA increased by $326 million, or 220%, in the third quarter of 2021 compared to the third quarter of 2020 and by $1,072 million, or 205%, in the first nine months of 2021 compared to the first nine months of 2020. Polyethylene results led to a 86% and 78% increase in EBITDA in the third quarter and first nine months of 2021, respectively, while polypropylene results led to a 72% and 64% increase in EBITDA in the third quarter and first nine months of 2021, respectively; these improvements were largely attributed to higher margins due to strong demand and tight markets. Higher olefins results led to a 55% and 16% increase in EBITDA in the third quarter and first nine months of 2021, respectively, primarily driven by higher margins attributable to increased ethylene and co-product prices which outpaced higher feedstock costs. Higher income from our equity investments led to increases in EBITDA of 18% and 34% in the third quarter and first nine months of 2021, respectively, mainly attributable to higher polyolefins margins associated with increased demand.
Results for the first nine months of 2020 included a $53 million LCM inventory valuation charge primarily driven by a decline in the price of naphtha and polymers. Results in the third quarter of 2020 included a $17 million LCM inventory valuation benefit related to the reversal of LCM inventory valuation charges recognized in the first half of 2020, largely driven by recovery of market prices of naphtha and polymers during the quarter. The absence of similar adjustments in the first nine months and the third quarter of 2021 resulted in a 10% and 11% change in EBITDA, respectively.
Intermediates and Derivatives Segment
Overview—EBITDA increased in the third quarter and first nine months of 2021 compared to the third quarter and first nine months of 2016, which was affected by turnaround activity and inventory requirements, led to higher sales volumes across most products. These increased volumes resulted in revenue increases of 11% and 4%, respectively, in the third quarter and first nine months of 2017.

Foreign exchange impacts that, on average, were favorable for the third quarter of 2017 resulted in a revenue increase of 4% compared to the third quarter of 2016.

EBITDA—EBITDA increased by $114 million, or 20%, in the third quarter of 2017 compared to the third quarter of 2016, and by $257 million, or 15%, in the first nine months of 2017 compared to the first nine months of 2016.

In the third quarter of 2017, higher volumes across most products and favorable foreign exchange impacts led to increases in EBITDA of 8% and 4%, respectively. The combined impact of the third quarter 2017 gain on sale of our interest in Geosel and the absence of the third quarter 2016 gains related to the sales of our joint venture in Japan and idled assets in Australia also resulted in a 17% increase in EBITDA. These increases were partly offset by a 9% decline in EBITDA due to per pound decreases in olefins and polyethylene margins of 1 cent and 3 cents, respectively, relative to the prior year period.

An increase in olefin margins2020, primarily 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 spreadsmargins across most businesses due to a more balanced European market. This net increase resulted in a 6% improvement in EBITDA in the first nine months of 2017 compared to the corresponding period in 2016. Higher volumes across most products during the period added another 5% to EBITDA. The net impact of the gain on the 2017 sale of our interest in Geosel and benefittight market supply from the elimination of an obligation associated with a lease, and 2016 gains on the sales of our wholly owned Argentine subsidiary, and our joint venture in Japan and idled assets in Australia resulted in an additional 6% increase in EBITDA. These increases were partially offset by a reduction in income from equity investments in Poland and Saudi Arabia in the first nine months of 2017 relative to very strong 2016 results.

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 Asiacoupled with strong 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.

recovery.

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

   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
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$2,894 $1,538 $7,246 $4,465 
Income from equity investments32 12 
EBITDA348 267 1,126 571 
Revenues—Revenues increased by $272$1,356 million, or 15%88%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $965$2,781 million, or 18%,62% in the first nine months of 20172021 compared to the first nine months of 2016.

2020. Higher average sales prices resulted in a 82% and 61% increase in revenue in the third quarter and first nine months of 20172021, respectively, as sales prices generally correlate with crude oil prices, which on average, increased compared to the same periods in 2020. Sales volumes increased in the third quarter of 2021 resulting in a 6% increase in revenue, due to improved demand for mostoxyfuels and related products which reflectas well as intermediate chemicals. Sales volumes declined in the first nine months of 2021 resulting in a 1% decrease in revenue due to the impact of unusually cold temperatures and associated electrical power outages that led to shutdowns of our manufacturing facilities in Texas in early 2021. Favorable foreign exchange 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 byresulted in a revenue decreaseincrease of 1%2% in eachthe first nine months of 2021.

EBITDA—EBITDA increased by $81 million, or 30%, in the third quarter of 2021 compared to the third quarter of 2020 and by $555 million, or 97%, in the first nine months of 2021 compared to the first nine months of 2020. Results for the third quarter and first nine months of 2017, primarily2021 declined 10% and 5%, respectively, 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, tosite closure costs associated with the negative effect of Hurricane Harvey on the operationsexit of our U.S. Gulf Coast facilities.

The remaining change in revenues reflects foreign exchange impacts that, on average, were favorable for the third quarter of 2017.

EBITDA—EBITDA increased $98 million, or 32%, in the third quarter of 2017 compared to the third quarter of 2016 and by $53 million, or 5%, in the first nine months of 2017 compared to the first nine months of 2016.

Higher margins for intermediate chemicals and POethanol business. Propylene oxide and derivatives led to a 35% improvement in third quarter 2017 EBITDA relative to the third quarter of 2016. POresults increased by 55% and derivative margins were driven by increased seasonal demand supported by industry outages, while intermediate chemicals margins benefited from increased sales prices due to tight supply. The impact of lower volumes discussed above resulted in a 3% decrease in EBITDA for the third quarter of 2017.

Higher intermediate chemicals margins driven by higher average sales prices were the main driver of a 9% increase in EBITDA in the first nine months of 2017, more than offsetting a 4% decrease in EBITDA stemming from the impact of lower volumes discussed above.

Refining Segment

Overview—EBITDA for our Refining segment benefited from higher crude processing rates58% in the third quarter and first nine months of 2017 as2021, respectively. This increase was primarily a result of higher margins due to strong demand recovery coupled with tight market supply resulting from industry outages. Intermediate chemicals results declined 7% during the impactsthird quarter of planned2021, driven by lower volumes primarily in connection with downtime at our acetyls facilities in La Porte, Texas. Intermediate chemicals results increased 20% during the first nine months of 2021 due to improved margins driven by higher demand and unplanned maintenance outages in 2017 were less thantight market conditions. Oxyfuels and related products results increased 18% and 13% in the corresponding periodsthird quarter and first nine months of 2016. Higher industry margins, which include2021, respectively, primarily driven by margin improvement as a result of improved demand and higher gasoline prices.



35

Table of Contents
Results for the favorable impact related to industry production outages associated with Hurricane Harveyfirst nine months of 2020 included a $76 million LCM inventory valuation charge primarily driven by a decline in the price of various gasoline blending components, benzene and styrene since December 31, 2019. Results in the third quarter of 2017, also benefited2020 included a $22 million LCM inventory valuation benefit related to the 2017 periods but was offsetreversal of LCM inventory valuation charges recognized in the first half of 2020 driven by higher maintenance-related fixed costsprice improvements for various gasoline blending components since the second quarter of 2020. The absence of similar adjustments in the first nine months and third quarter of 2021 resulted in a 13% and 8% change in EBITDA, respectively.
Advanced Polymer Solutions Segment
Overview—EBITDA for our APS segment decreased in the third quarter of 2021 relative to the third quarter of 2020 primarily due to the absence of LCM inventory valuation benefits recognized in the third quarter of 2020. Results increased in the first nine months of 2017.

2021 relative to the first nine months of 2020, primarily due to higher compounding and solutions volumes.

The following table sets forth selected financial information for the APS segment including losses from equity investments, which is a component of EBITDA:
 Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$1,286 $1,004 $3,892 $2,805 
Income (loss) from equity investments— — — (1)
EBITDA121 157 385 226 


Revenues—Revenues increased by $282 million, or 28%, in the third quarter of 2021 compared to the third quarter of 2020 and by $1,087 million, or 39%, in the first nine months of 2021 compared to the first nine months of 2020. Average sales price increased resulting in a 34% and 23% increase in revenue in the third quarter and first nine months of 2021, respectively, as sales prices generally correlate with crude oil prices, which on average, increased compared to the same periods in 2020. Sales volumes decreased in the third quarter of 2021 resulting in a 7% decrease in revenue stemming from lower automotive demand in the third quarter on prolonged shortages of semi-conductors across the industry. Sales volumes increased in the first nine months of 2021 resulting in a 10% increase in revenue stemming from higher automotive and construction demand over the nine month period. Foreign exchange impacts resulted in a revenue increase of 1% and 6% in the third quarter and first nine months of 2021, respectively, relative to the comparable periods in 2020.

EBITDA—EBITDA decreased by $36 million, or 23%, in the third quarter of 2021 compared to the third quarter of 2020 and increased by $159 million, or 70%, in the first nine months of 2021 compared to the first nine months of 2020.

Results for the first nine months of 2020 included a $29 million LCM inventory valuation charge primarily resulting from a decline in the price of polymers. Results in the third quarter of 2020 also include a $40 million LCM inventory valuation benefit related to the reversal of LCM inventory valuation charges recognized in the first half of 2020 resulting from recovery of market prices of polymers. The absence of similar adjustments in the first nine months and third quarter of 2021 resulted in a 13% and 25% change in EBITDA, respectively.

Compounding and solutions results led to an EBITDA increase of 28% in the first nine months of 2021, primarily due to higher volumes driven by higher demand. Increased advanced polymer results led to an EBITDA increase of 16% in the first nine months of 2021 due to higher volumes driven by increased demand for our products utilized in the automotive and construction end markets. During the third quarter of 2021, margin improvements in our advanced polymers business, driven by higher price spreads, resulted in an 8% increase in results. This increase was completely offset by lower compounding and solutions volumes due to constrained production in automotive, appliance and other end markets as a result of semiconductor shortages.




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Table of Contents
Refining Segment

Overview—EBITDA increased in the third quarter and first nine months of 2021 relative to the third quarter and first nine months of 2020 due to higher margins and the absence of a non-cash impairment charge recognized during the third quarter of 2020.
The following table sets forth selected financial information and heavy crude oil processing rates for the Refining segment and the U.S. refining market margins for the applicable periods. Light Louisiana Sweet,“Brent” is a light sweet crude oil whileand is one of the main benchmark prices for purchases of oil worldwide. “Maya” is a heavy sour crude oil.oil grade produced in Mexico that is a relevant benchmark for heavy sour crude oils in the U.S. Gulf Coast market. References to industry benchmarks for refining market margins are to industry prices reported by Platts, a division of S&P Global.

   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
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$2,288 $1,101 $5,359 $3,468 
EBITDA41 (692)(150)(799)
Thousands of barrels per day
Heavy crude oil processing rates260 216 220 226 
Market margins, dollars per barrel
Brent - 2-1-1$16.10 $5.71 $14.00 $5.86 
Brent - Maya differential7.01 4.18 5.97 7.61 
Total Maya 2-1-1$23.11 $9.89 $19.97 $13.47 

Revenues—Revenues increased by $340$1,187 million, or 26%108%, in the third quarter of 20172021 compared to the third quarter of 20162020 and by $1,162$1,891 million, or 33%55%, in the first nine months of 20172021 compared to the first nine months of 2016.

2020. Higher product prices led to a revenue increasesincrease of 23%95% and 29%,63% in the third quarter and first nine months of 2021, respectively, relative to the comparative periods in 2016 due to an average Brent crude oil price increasesincrease of approximately $8$30 and $11$25 per barrel in the third quarter and first nine months of 2017,2021, respectively. Heavy crude oil processing ratesSales volumes increased in the third quarter of 2021 resulting in a 13% increase in revenue due to improved demand. In the first nine months of 2021, revenue decreased 8% as a result of a decline in volumes 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 in early 2021.

EBITDA—EBITDA increased by 15%$733 million, or 106%, in the third quarter of 2021 compared to the third quarter of 2020 and 21%by $649 million, or 81%, in the first nine months of 2021 compared to the first nine months of 2020. During the third quarter of 2020, we recognized a non-cash impairment charge of $582 million relating to our Houston refinery’s asset group with no corresponding charge in the third quarter and first nine months of 2017, respectively, leading to volume driven revenue increases2021. The absence of 3% and 4% during those same periods.

EBITDA—EBITDA increased by $68 million, or 680%,a similar charge in the third quarter and first nine months of 2017 compared to2021 resulted in a 84% and 73% change in EBITDA, respectively. The remaining increase in EBITDA was primarily driven by margin improvements in the third quarter and first nine months of 20162021. Margins improved due to an increase in the Maya 2-1-1 market margin resulting from higher demand for refined products. The first nine months of 2021 were also impacted by the absence of unplanned outages at our fluid catalytic cracking unit in 2021, which restricted the yield of higher-margin refined products in the first two quarters of 2020. This was partially offset by margin declines driven by unfavorable by-product crack spreads of $7 per barrel, higher costs of Renewable Identification Numbers (“RINs”) of approximately $1 per gallon and by $62the absence of $60 million or 689%,of favorable mark-to-market gains on hedges recognized in the first nine months of 2017 compared2020.



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Table of Contents
We are currently weighing strategic options for our Refining segment, including a potential sale of our Houston refinery. While the refinery is a valuable asset, we believe that it may be even more valuable as part of a larger refining system. Any strategic option pursued for the Houston refinery remains subject to the approval of our Board of Directors and, assuming such approval is obtained, may require certain regulatory approvals or other closing conditions.
Technology Segment

Overview—EBITDA increased in the third quarter and first nine months of 2016.

Higher production accounted for approximately 20% of the improvement in EBITDA in2021 relative to the third quarter of 2017 and all of the improvement in EBITDA for the first nine months of 2017. Crude oil processing rates in 2017 were2020 driven by 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 train in the first quarter. Downtime at crude units reduced crude oil processing rates in both 2016 comparison periods.

Refining margins, which increased due to industry outages related to Hurricane Harvey, accounted for approximately 80% of the EBITDA improvement in the third quarter of 2017. Higher refining margins also benefited EBITDA in the first nine months of 2017; however, the benefit was offset by the higher maintenance-related fixed costs mentioned above.

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 higherand catalyst sales volumes, compared to the first nine months of 2016.

volumes.


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

   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 

Revenues—


 Three Months Ended
September 30,
Nine Months Ended
September 30,
Millions of dollars2021202020212020
Sales and other operating revenues$238 $193 $586 $492 
EBITDA155 111 341 279 

RevenuesRevenues decreasedincreased by $4$45 million, or 4%23%, in the third quarter of 20172021 compared to the third quarter of 2016,2020 and by $38$94 million, or 10%19%, in the first nine months of 20172021 compared to the first nine months of 2016.

Revenue decreases2020. Higher catalyst volumes resulted in a 8% and 6% increase in the third quarter and first nine months of 2021, respectively, primarily driven by strong demand. Changes in average catalyst sales price resulted in a revenue increase of 15% and 4% in the third quarter and first nine months of 2021, respectively. Licensing revenues increased by 3% in the first nine months of 2021. Favorable foreign exchange impacts increased revenue by 6% in the first nine months of 2021.


EBITDA—EBITDA increased by $44 million, or 40%, in the third quarter of 2% and 4%, respectively, were attributable to catalyst sales volumes and average sales prices that were lower2021 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 in licensing revenues was responsible for a revenue decrease of 14% 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%2020 and 1%, respectively, related to increased catalyst sales volumes and higher average sales prices for catalysts.

EBITDA—EBITDA increased by $2$62 million, or 4%, in the third quarter of 2017 compared to the third quarter of 2016, and decreased by $46 million, or 23%22%, in the first nine months of 20172021 compared to the first nine months of 2016.

The benefit from higher catalyst margins, which was reduced roughly one half by lower licensing and services margins, 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 volumes2020. EBITDA improvements in the third quarter and first nine months of 2017 relative to2021 were driven by higher licensing revenue driven by more contracts reaching significant milestones. Favorable foreign exchange impacts resulted in an EBITDA increase of 1% and 5% in the corresponding prior year period. Lower licensingthird quarter and services margins were largely responsible for a 27% EBITDA decrease in the first nine months 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, respectively.

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Contents

FINANCIAL CONDITION

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

   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

 Nine Months Ended
September 30,
Millions of dollars20212020
Cash provided by (used in):
Operating activities$4,616 $2,661 
Investing activities(797)(2,307)
Financing activities(3,627)1,192 

Operating Activities—ActivitiesCash of $3,724 million generated provided by operating activities of $4,616 million in the first nine months of 2017 reflects2021 reflected earnings adjusted for non-cash items, and $376 million of cash consumed by the main components of working capital–accounts receivable, inventories and accounts payable. Higher sales prices and increased volumes in our O&P–EAI segment led to the increase in accounts receivable and an increase in feedstock pricing in our O&P–EAI segment led to the increase in accounts payable in the first nine months of 2017. Higher olefin co-product and propylene prices in our O&P–Americas segment in the first nine months of 2017, which were partially offset by an inventory drawdown during turnaround activities at our I&D segment’s Botlek, Netherlands facility, led to the increase in inventories.

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.


In the salefirst nine months of our wholly owned Argentine subsidiary and adjustments for related working capital, and gains totaling $11 million related to sales of our joint venture in Japan and idled assets in Australia.

The2021, the main components of working capital used $1,517 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 across most businesses primarily driven by higher sales volumes along with higher average sales prices. The increase in Inventories was primarily due to an increase in raw material costs coupled with the replenishment of $226inventory levels to support anticipated business demands. The increase in Accounts payable was primarily driven by increased raw material costs.

Other operating activities in 2021 includes the effects of changes in income tax accruals, primarily driven by the increased pretax income, partially offset by income tax payments made during the period.
Cash provided by operating activities of $2,661 million duringin the first nine months of 2016. Higher product sales prices2020 reflected earnings adjusted for non-cash items, payments for employee bonuses, income taxes, and cash provided by the main components of working capital.
In the first nine months of 2020, the main components of working capital provided $514 million of cash driven primarily by a decrease in Inventory. The decrease in Inventory was primarily driven by company-wide inventory reduction initiatives and lower raw material costs across most of our O&P–Americas segment at the end of the third quarter of 2016 combined with the impact of higher quarter-end sales volumes in our O&P–Americas and I&D segments relative to the end of the fourth quarter of 2015 led to the increase in accounts receivable. Higher accounts payable partly offset the receivables increases, primarily in our O&P–Americas segment, due to additional purchases of product for resale during turnaround activities.

segments.

Investing Activities—We invest cash in investment-grade and other high-quality instruments that provide adequate flexibility to redeploy funds as needed to meet our cash flow requirements while maximizing yield.
In the first nine months of 2021 and 2020, we received proceeds of $309 million and $313 million, respectively, from our investments in equity securities and $346 million and $90 million, respectively, upon the maturity and sales of certain available-for-sale debt securities.
In the first nine months of 2020, we invested $270 million in debt securities that are deemed available-for-sale and $267 million in equity securities. Our investments in available-for-sale debt securities and equity securities are classified as Short-term investments.
In the first nine months of 20172021, we made an equity contribution of $104 million to form Ningbo ZRCC LyondellBasell New Material Company Limited, a 50/50 joint venture with China Petroleum & Chemical Corporation. The joint venture will construct a new propylene oxide and 2016, we invested $653 million and $683 million, respectively,styrene monomer unit in securities that are classified as Short-term investments.Zhenhai Ningbo, China. The majority of these investments are deemed available-for-sale; however, we also investedjoint venture is included in some securities deemed held-to-maturity. We received proceeds of $75 million upon maturity of our held-to-maturity securities during the first nine months of 2017. I&D segment.
In the first nine months of 20172020, we invested $472 million in cash for a 50% equity interest in the Bora LyondellBasell Petrochemical Co. Ltd joint venture. This joint venture began operations during the third quarter of 2020 and 2016,is included in our O&P—EAI segment.


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In July 2021, foreign currency contracts with an aggregate notional value of €300 million expired. Upon settlement of these foreign currency contracts, we also invested $512paid €300 million ($355 million at the expiry spot rate) to our counterparties and $500received $358 million respectively, in tri-party repurchase agreements, which are classified as short-term loans receivable. We received proceeds upon the sale and maturity of certain offrom our available-for-sale securities and repurchase agreements of $499 million and $381 million, respectively,counterparties.
Capital expenditures in the first nine months of 2017, and $6652021 totaled $1,285 million and $603compared to $1,673 million respectively, in the correspondingfirst nine months of 2020. Approximately 60% of our capital spending in both periods of 2016.

Joint Venture Activity—In September 2017, we soldwas for profit-generating growth projects, primarily our 27% interest in our Geosel joint venture and received proceeds of $155 million.

In April 2017, we increased our interestPO/TBA plant, with the remaining spending supporting sustaining maintenance. We estimate capital spending will continue to increase in the entity that holds our equity interest in Al Waha Petrochemicals Ltd. from 83.79%fourth quarter of 2021 compared to 100% by paying $21 millionprior quarters, while remaining flat on an annual basis compared to exercise a call option to purchase the remaining 16.21% interest held by a third party.

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

Financial Instruments Activity—Upon expiration in 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 investments 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.prior year. 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 
  

 

 

   

 

 

 

spending by segment.

Financing ActivitiesIn the first nine months of 20172021 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.

Financing Activities—In the first nine months of 2017 and 2016,2020, we made payments of $866$78 million and $2,501$4 million respectively, to acquire approximately 101.0 million and 310.1 million, respectively, of our outstanding ordinary shares. We also made dividend payments totaling $1,060$1,110 million and $1,049 million during the first nine months of 2017 and 2016, respectively. For additional information related to these share repurchases and dividend payments, see Note 10 to the Consolidated Financial Statements.

We made net repayments of $178 million and received net proceeds of $177$1,053 million in the first nine months of 20172021 and 2016,2020, respectively.

In 2021, we repaid $2,275 million outstanding under our Term Loan due 2022, 4% Guaranteed Notes due 2023 and 2.875% Guaranteed notes due 2025.
In April 2020, LYB International Finance III, LLC (“LYB Finance III”), a wholly owned finance subsidiary of LyondellBasell Industries N.V. issued $500 million of 2.875% guaranteed notes due 2025 at a discounted price of 99.911%, $500 million of 3.375% guaranteed notes due 2030 at a discounted price of 99.813% and $1,000 million of 4.2% guaranteed notes due 2050 at a discounted price of 99.373%. Net proceeds from the sale of the notes totaled $1,974 million. We used the net proceeds from the sale of the notes for general corporate purposes, including to increase our liquidity and manage short-term debt maturities.
Additionally, in April 2020 we repaid $500 million of our Senior Revolving Credit Facility and $500 million of our U.S. Receivables Facility borrowed in March 2020 to increase our liquidity.
In May 2020, we terminated and cash settled $2,000 million in notional value of our cross-currency interest rate swaps, designated as cash flows hedges, maturing in 2021 and 2024. Upon termination of the swaps, we received $346 million from our counterparties.
In the first nine months of 2021 and 2020, we made net repayments of $103 million and received net proceeds of $194 million, respectively, through the issuance and repurchase of commercial paper instruments under our commercial paper program.

In March 2017,the first nine months of 2020, we issued $1,000posted collateral of $238 million of 3.5% guaranteed notes due 2027 and received net proceeds of $990 million. The proceeds from these notes, togetherrelated to the positions held 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 usedcounterparties for general corporate purposes, including repurchases of LyondellBasell N.V.’s ordinary shares.

certain forward-starting interest rate swaps.

Additional information related to these notesthe issuance of debt and commercial paper can be found in the Liquidity and Capital Resources section below and in Note 56 to the Consolidated Financial Statements.

Liquidity and Capital Resources
Overview
We plan to fund our ongoing working capital, capital expenditures, debt service, dividends and other funding requirements with our current available liquidity and cash from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, business and other factors, many of which are beyond our control. Cash and cash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of debt, or a combination thereof, may be used to fund the purchase of shares under our share repurchase authorization.

We intend to continue to declare and pay quarterly dividends, with the goal of increasing the dividend over time, after giving consideration to our cash balances and expected results from operations. Our focus on funding our dividends while remaining committed to a strong investment grade balance sheet continues to be the foundation of our capital allocation strategy. In the near term, we are prioritizing debt reduction on our balance sheet.



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Cash and Liquid Investments
As of September 30, 2017,2021, we had $2,499 million of unrestricted cashCash and cash equivalents and marketable securities classified as Short-term investments and held $561totaling $1,929 million, of tri-party repurchase agreements classified as Prepaid expenses and other current assets. For additional information related to our purchases of marketable securities see “Investing Activities” above and Note 6 to the Consolidated Financial Statements.

At September 30, 2017, we held $584which includes $1,593 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.

Credit Arrangements
At September 30, 2021, we had total debt, including current maturities, of $13,516 million, and $224 million of outstanding letters of credit, bank guarantees and surety bonds issued under uncommitted credit facilities.
We also had total unused availability under our credit facilities of $2,955$3,004 million at September 30, 2017,2021, which included the following:

$2,1832,104 million under our $2,500 million revolving credit facility,Senior Revolving Credit Facility, which backs our $2,500 million commercial paper program. In June 2017, the term of our $2,500 million revolving credit facility was extended for one year to June 2022 pursuant to a consent agreement. Availability under this facility is net of outstanding borrowings, outstanding letters of credit provided under the facility and notes issued under our commercial paper program. A small portion of our availability under this facility is impacted by changes in the euro/U.S. dollar exchange rate. At September 30, 2017,2021, we had $317$397 million of outstanding commercial paper, net of discount, no outstandingborrowings or letters of credit and no outstanding borrowings under thethis facility; and

$772900 million under our $900 million U.S. accounts receivable securitization facility.Receivables Facility. Availability under this facility is subject to a borrowing base of eligible receivables, which is reduced by outstanding borrowings and letters of credit, if any. This facilityAt September 30, 2021, we had no outstanding borrowings or letters of credit at September 30, 2017.

outstanding under this facility. In March 2017,June 2021, we extended the term of the facility to June 2024 in accordance with the terms of the agreement.

During the first nine months of 2021, we repaid $2,275 million outstanding under our direct, 100% owned subsidiary, LYB International Finance II B.V., issued $1,000Term Loan due 2022, 4% Guaranteed Notes due 2023 and 2.875% Guaranteed notes due 2025, and made net repayments of $103 million of 3.5% guaranteed notesour commercial paper. Additionally, in October 2021 we repaid $650 million outstanding under our Guaranteed Floating Rate Notes due 2027 at a discounted price of 98.968%. These unsecured notes, which are fully2023. We continue to prioritize debt reduction in 2021 and unconditionally guaranteed by LyondellBasell Industries N.V., rank equally in right of payment to all of LYB International Finance II B.V.’s existing and future unsecured indebtedness and to all of LyondellBasell N.V.’s existing and future unsubordinated indebtedness. The net proceeds from these notes, together with available cash, were used to repay $1,000 million aggregate principal amountexpect total reduction of our outstanding 5% Senior Notes due 2019 in March 2017.

debt for the year to be up to $4 billion.

At September 30, 2017,any time and from time to time, we had totalmay repay or redeem our outstanding debt, including current maturities,purchases of $8,915 million,our outstanding bonds in the open market, through privately negotiated transactions or a combination thereof, in each case using cash and $551 millioncash equivalents, cash from our short-term investments, cash from operating activities, proceeds from the issuance of outstanding lettersdebt or proceeds from asset divestitures. Any repayment or redemption of credit, bank guaranteesour debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and surety bonds issued under uncommitted credit facilities.

other factors. In connection with such repurchases or redemptions, we may incur cash and non-cash charges, which could be material in the period in which they are incurred.

In accordance with our current interest rate risk management strategy and subject to management’s evaluation of market conditions and the availability of favorable interest rates among other factors, we may from time to time enter into interest rate swap agreements to economically convert a portion of our fixed rate debt to variable rate debt or convert a portion of our variable rate debt to fixed rate debt.

For additional information related to our credit facilities and Notes discussed above, see Note 5 to the Consolidated Financial Statements.

Share Repurchases
In May 2017,2021, our shareholders approved a proposal to authorize us to repurchase up to an additional 10%, or approximately 4034.0 million of our outstanding ordinary shares, through November 201828, 2022 (“May 20172021 Share Repurchase Program”Authorization”). As a result, the authorization of the remaining unpurchased shares under the share, which superseded any prior repurchase program approved by our shareholders in May 2016 (“May 2016 Share Repurchase Program”) was superseded.authorizations. Our share repurchase programauthorization does not have a stated dollar amount, and purchases may be made through open market purchases, private market transactions or other structured transactions. Repurchased shares could be retired or used for general corporate purposes, including for various employee benefit and compensation plans. DuringThe maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased. In the first nine

months of 2017,2021, we have purchased approximately 101.0 million shares under these programsour share repurchase authorization for approximately $845$89 million.



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As of October 24, 2017,27, 2021, we had approximately 3432.2 million shares remaining under the current authorization. The timing and amountamounts of additional shares repurchased, if any, will be determined by our Management Board based on itsour evaluation of market conditions and other factors.factors, including any additional authorizations approved by our shareholders. For additional information related to our share repurchase programs,authorizations, see Note 10 to the Consolidated Financial Statements.

CURRENT BUSINESS OUTLOOK

We may repay or redeemexpect strong demand for our debt, including purchases of our outstanding bondsproducts to continue as vaccine rollouts drive further improvements in economic activity around the open market, using cash and cash equivalents, cash from our short-term investments and tri-party repurchase agreements, cash from operating activities, proceeds fromworld. Over the issuance of debt, proceeds from asset divestitures, or a combination thereof. In connection with any repayment or redemption of our debt,next several quarters, we may incur cash and non-cash charges, which could be materialexpect constrained consumer demand will extend strength 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, withautomotive, 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 cashdurable goods markets. While margins are likely to moderate due to increasing feedstock prices, energy costs and winter seasonality, we anticipate ongoing benefits from operations, which could be affected by general economic, financial, competitive, legislative, regulatory, businessstrong markets 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.

tight industry supply.


We believe that our available liquidity andrecent value-driven growth investments should benefit us over the coming years. With an improving outlook for 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 contributedgeneration, we remain committed to further delaysstrengthening our investment grade balance sheet through deleveraging in the startup of new U.S. capacity. As2021. Additionally, we look toward the remainder of 2017, weexpect cash generation will 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 improved demandprovide flexibility for ethylene while the industry awaits the startup of additional crackers during 2018. Global demand for polyolefins remains strong.

Most intermediate and derivatives products are well-positioned as we enter the fourth 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 at 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.

opportunistic share repurchases.

ACCOUNTING AND REPORTING CHANGES

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



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

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

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

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

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

if crude oil prices fellfall materially, or decreaseremain low relative to U.S. natural gas prices, we would see less benefit from low-cost natural gas and natural gas liquids and it could have a negative effect on our results of operations;

industry production capacities and operating rates may lead to periods of oversupply and low profitability; for example, there has been substantial capacity expansion announced in the U.S. olefins industry;

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

environmental and other regulations may negatively impact our business by, among other things, restricting our operations, increasing costs of operations or requiring significant capital expenditures;

we may not be able to protect our market position or otherwise pass on cost increases to our customers due to the significant competition we face as a result of the commodity nature of many of our products;

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

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

our ability to implement business strategies and execute our organic growth plans may be negatively affected or restricted by among other things, our ability to complete projects on time and on budget and other events that may affect budget;
our ability to develop projectsacquire new businesses and strategies;assets and integrate those operations into our existing operations and make cost-saving changes in operations;

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

uncertainties related to the extent and duration of the pandemic-related decline in demand, or other impacts due to the pandemic in geographic regions or markets served by us, or where our operations are located, including the risk of prolonged recession;
the negative outcome of any legal, tax and environmental proceedings or changes in laws or regulations regarding legal, tax and environmental matters may increase our costs, reduce demand for our products, or otherwise limit our ability to achieve savings under current regulations;


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

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

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

we may be unable to meet our sustainability goals, including the ability to operate safely, increase production of recycled and renewable-based polymers, and reduce our emissions;
we have substantialsignificant international operations, and continued economic uncertainties, fluctuations in exchange rates, valuations of currencies and our possible inability to access cash from operations in certain jurisdictions on a tax-efficient basis, if at all, could negatively affect our liquidity and our results of operations;

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

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

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

Any of these factors, or a combination of these factors, could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statements are not guarantees of future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. Our management cautions against putting undue reliance on forward-looking statements or projecting any future results based on such statements or present or prior earnings levels.

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

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market and regulatory risks is described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2016.2020. Our exposure to such risks has not changed materially in the nine months ended September 30, 2017.

2021.
Item 4.CONTROLS AND PROCEDURES

Item 4.    CONTROLS AND PROCEDURES
As of September 30, 20172021, with the participation of our management, our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial and accounting officer) carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the Act), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Act). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were operating effectivelyeffective as of September 30, 2017.

2021.

There have been no changes in our internal controlcontrols over financial reporting, as defined in Rule 13a-15(f) of the Act, in the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

Item 1.    LEGAL PROCEEDINGS

Information regarding our litigation and other legal proceedings can be found in Note 9Commitments and Contingencies, to the Consolidated Financial Statements, which is incorporated into this Item 1 by reference.

The following is


In connection with an enforcement initiative of the U.S. Environmental Protection Agency (“EPA”) regarding flare emissions at petrochemical plants, we have settled with the EPA and the Department of Justice (“DOJ”) in order to resolve claims related to alleged improper operation and maintenance of flares at four of our U.S. facilities. Under the terms of the settlement, we will pay 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.$3,400,000, conduct fence line monitoring, and make investments in equipment at the facilities. The Agreed Order is currently awaiting final TCEQ approval.

consent decree related to the settlement has been filed in the U.S. District Court for the Southern District of Texas.


Additional information about suchour environmental proceedings can be found in Part I, Item 3 of our 20162020 Annual Report on Form 10-K, which is incorporated into this Item 1 by reference.

Item 1A.RISK FACTORS

Item 1A.    RISK FACTORS

There have been no material changes fromto the risk factors associated with our business previously disclosed in Item 1A of“Item 1A. Risk Factors,” in our 2016 Annual Report on Form 10-K.

10-K for the year ended December 31, 2020.
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

   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 
  

 

 

     

 

 

   

(1)On May 24, 2017, we announced a share repurchase program of up to 40,087,633 of our ordinary shares through November 23, 2018, which superseded any prior repurchase authorizations. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased.

Item 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Issuer Purchases of Equity Securities
PeriodTotal Number
of Shares
Purchased
Average Price
Paid per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Authorizations
Maximum Number
of Shares That May Yet
Be Purchased Under the
Plans or Authorizations
July 1 - July 31— $— — 34,004,563 
August 1 - August 31— $— — 34,004,563 
September 1 - September 30953,681 $93.34 953,681 33,050,882 
Total953,681 $93.34 953,681 33,050,882 
On May 28, 2021, our shareholders approved a share repurchase authorization of up to 34,004,563 shares of our ordinary shares, through November 28, 2022, which superseded any prior repurchase authorizations. The maximum number of shares that may yet be purchased is not necessarily an indication of the number of shares that will ultimately be purchased.
Item 4.MINE SAFETY DISCLOSURES

Item 4.    MINE SAFETY DISCLOSURES
Not applicable.

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Item 6.     EXHIBITS
Item 6.EXHIBITS

Exhibit NumberDescription
10.1+
31.131.1*
31.231.2*
3232*
101.INS101.INS*XBRL Instance DocumentDocument–The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH101.SCH*XBRL Schema Document
101.CAL101.CAL*XBRL Calculation Linkbase Document
101.DEF101.DEF*XBRL Definition Linkbase Document
101.LAB101.LAB*XBRL Labels Linkbase Document
101.PRE101.PRE*XBRL Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

+ Management contract or compensatory plan, contract or arrangement
* Filed herewith


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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


LYONDELLBASELL INDUSTRIES N.V.
Date:October 27, 201729, 2021

/s/ Thomas Aebischer

Chukwuemeka A. Oyolu
Thomas AebischerChukwuemeka A. Oyolu
ExecutiveSenior Vice President, and
Chief FinancialAccounting Officer and Investor Relations
(Principal FinancialAccounting Officer)

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